Ken Joyce – President and CEO Joanne Solomon – EVP and CFO

Satya Kumar – Credit Suisse Peter Kim – Deutsche Bank Olga Levinzon – Barclays Capital Eric Rubel – MTR Securities Atif Malik – Morgan Stanley Oliver Corlett – R.W. Pressprich

Thank you, Damian. And good afternoon, everyone.

With me today is Joanne Solomon, our Chief Financial Officer. Today, I will talk about our strong financial performance in the second quarter, the associated business drivers, and some of our new and advanced technology initiatives.

Joanne will then discuss our financial performance in more detail, and finally, we will open up the call for your questions. Let me start by saying I’m very pleased with our financial results this quarter.

We delivered record level quarterly net sales and solid gross margin. Both of these results were higher than our expectations, and our net income and earnings per share were at the high end of our guidance, after adjusting for some one-time charges.

We are clearly benefiting from the global demand for electronics. Just this morning, the Wall Street Journal had a front page article on how tech gadgets are stealing sales from appliances in close.

They noted this shift reflects a change in priorities for American consumers. The improved macro environment for the semiconductor industry is not the only reason for our recent growth.

Consumers worldwide are seeking electronic devices that feature ever greater communication and computing capabilities and provide high-speed mobile access to data-rich content. Our strategies of closely collaborating with our customers and delivering the technology solutions that enable the advanced functions in these sophisticated devices are aligned with this trend.

These strategies are also significant drivers of our financial success this year. Moving on to revenues, we delivered growth of 16% over the first quarter.

From a product perspective, demand was robust across all our major packaging and test services. We saw healthy increases in ball grid array, chip scale packaging, and leadframe, with our BGA being particularly strong.

From an end market perspective, gaming and high-definition TVs were major contributors to our sales growth. In addition, communications rebounded from the first quarter seasonal correction, and computing and automotive were also solid.

Favorable mix changes and high utilization drove our higher than expected gross margin of 24%. Utilization increased to 87%, a significant improvement from 84% in Q1 and 66% in Q2 of the prior year, with many product lines running at near maximum capacity.

Now let’s move on to some of our new initiatives. Commercializing advanced technologies in close collaboration with our customers is one of our key strategies, driving our financial growth and financial success.

Our ability to deliver on this strategy is illustrated by our recent announcement along with Texas Instruments that our two companies have qualified and begun production of the industry’s first fine pitch copper pillar flip chip packages. This proprietary technology enables reduced semiconductor chip size and cost while boosting performance and is ideal for handheld, high performance, low power devices, precisely the kind of products most in demand with today’s global consumers.

We jointly developed and deployed this cutting edge technology, and both companies will reap the benefits. This is a true collaboration and an excellent example of the kinds of partnerships we establish with our customers.

An important component of building these strategic relationships with our customers is our commitment to provide the capacity to support their needs. We expect our fine chip copper pillar flip chip business to be substantial.

And we also see excellent growth in other leading edge products, including Through Mold Via and various hybrid packages. To support this growing demand, we are expanding our K4 manufacturing facility in Gwangju, South Korea, by nearly 200,000 square feet.

Another notable success I would like to point out is the development and quick implementation of our 300-millimeter wafer bumping capacity in Taiwan. Our team in Taiwan did a great job ramping up this technology.

This new capacity substantially expands our turnkey flip chip capabilities in Taiwan for some of our most significant customers. It has also provided some relief for the shortages in bump capacity.

Now I would like to share two thoughts with you about copper wire bonding in our industry. First, customer demand for copper wire bonding is much greater for low cost, lower end devices.

Demand for copper wire in advanced packages is modest and limited to specific applications. Second, any migration to copper wire is driven by customers’ requirements.

Transitioning to copper does not happen unless the customer requests it to happen. These considerations are key to understanding Amkor’s copper wire bonding capabilities.

Amkor has copper wire packaging capabilities that can support both advanced and commodity packages. We have been shipping copper wire bonded packages in high volume since early 2008.

And at the end of 2009, we began shipping highly advanced copper wire BGA laminate substrate based packages, supporting 65-nanometer silicon technologies. However, most of our customers continue to prefer gold over copper because of the more exacting standards for advanced wire bond solutions used in sophisticated devices.

We are confident that we can meet any demand for copper wire bonding as and when our customers require. Now let us move on to our investment and capital spending plans.

We’ve spent $158 million in Q2 to service our customer needs and enabled the projects and initiatives we just discussed. Even with the higher level investment in the second quarter, demand continues to exceed capacity in many of our product lines.

Accordingly, we are providing guidance for the third quarter capital expenditures of $195 million and full year capital spending of around $500 million. Working closely with our customers, we have confidence in the strength of the market and see solid demand into 2011.

That said, we are also focused on prudently managing our capital spending to avoid creating excess certainly. Just as we demonstrated during the downturn in 2009, we can adjust our level of investment as market conditions change.

Continuing with the rest of our financial guidance, we expect net sales to grow between 5% and 9% for the third quarter. Growth in this range is also consistent with normal, sequential, seasonal patterns.

The first half of the year was a continuation of the recovery from the depth of the 2009 downturn. And we have recently exceeded unit volumes reached at the prior peak in mid-2008.

We see continued strength in the business, driving growth in the second half of this year. We anticipate gross margins for Q3 to be 25% to 26%, reflecting a greater mix of our more advanced packages and higher utilization.

We also continue to expect gross margin to be in the mid-20s for the full year. I’m also very gratified to say that we expect 2010 to be our fifth consecutive year of positive free cash flow even though we are investing at high levels for our customers.

At the same time, we have significantly improved our balance sheet by reducing our net debt by more than $900 million over the last five years. In closing, I am quite pleased with our financial results this quarter and look forward to a very solid second half of the year.

We believe that our focus on profitable growth, not market share just for the sake of share, disciplined capital investment, technology leadership, and operational excellence create a meaningful competitive advantage that serves our customers and our shareholders very well. And with that, I’ll now turn the call over to Joanne.

Thank you, Ken. And good afternoon, everyone.

Amkor delivered excellent performance in the second quarter. We increased revenue to $749 million, expanded margins, strengthened our balance sheet, and prudently invested for robust and profitable growth.

Unit shipments were a record $2.7 billion, a 11% increase over the first quarter. This volume growth was principally driven by the strength of our leadframe, wire bond and chip scale packaging services.

Net sales grew 16%, even greater than units, due to strong demand for ball grid array and chip scale packaging services with higher prices. Our sales to integrated device manufacturers, our IDM customers, rebounded to 50% of total sales from 45% last quarter.

And we anticipate that the revenue split between our IDM and fabless customers will remain around 50/50 for the third quarter. As Ken mentioned, our strong and higher than expected gross margin was primarily driven by favorable product mix and high utilization rate.

Although not significant to gross margin for the quarter, I will give some color on pricing, gold and foreign currency exposure. The pricing environment remained stable, and price erosion was in the normal range between 1% and 2%.

In absolute dollars, our gold spending increased by $13 million, almost 70% of which was driven by higher volumes. Our gold prices did increase but did not materially affect gross margins due to our pricing strategy.

The impact of foreign currency exchange rates reduced gross profit by approximately $2 million. Moving down the income statement, operating expenses were $78 million, up from $68 million in the first quarter and also higher than we anticipated.

Two items drove the majority of the increase. First, in May, we went live with our new enterprise resource planning system, and this implementation drove additional spending.

Second, we increased our bonus accrual to reflect the higher level of financial performance. We estimate that our effective tax rate for the remainder of 2010 will be approximately 5%, as we benefit from tax holidays and the utilization of prior losses and tax credits.

We expect our effective tax rate for the full year to be around 3%. To wrap up the discussion on the income statement, our earnings of $0.23 per diluted share came in at the high end of our guidance after adjusting for a net $0.04 negative impact from two one-time items.

We incurred a loss of $0.06 on the early retirement of debt from a series of transactions. We also saw a gain of $0.02 from the release of the tax valuation allowance.

Neither of these items were included in our prior guidance. Turning to the balance sheet, we successfully completed a series of debt transactions during the quarter.

These transactions are the latest examples of our continued success in capitalizing on market opportunities, to enhance the liquidity, strengthen our balance sheet, reduce our interest expense, and mitigate future refinancing risks on very favorable terms. In May, we refinanced our near-term senior notes maturing in 2011 and 2013.

We issued $345 million of new senior notes, which are due in April 2018 and bear interest at 7.375%. We used the net proceeds from each new notes together with existing cash to redeem in full the $53 million of our 7.125% 2011 senior notes and the $358 million of our 7.75% 2013 senior notes.

And in June, we’ve repurchased approximately 126 million of our outstanding 9.25% 2016 senior notes using the proceeds from a term loan in Korea that bears a substantially lower interest rate. The new term loan’s variable interest rate is currently at 4.5% and amortized in 11 equal quarterly installations of $5 million, with the balance of $78 million due in May 2013.

And as I previously mentioned, we recorded a charge of $18 million or $0.06 per share principally for the call premiums we paid for the early retirement of these debts. So after the debt transactions this quarter, our total debt remains at $1.4 billion, including approximately $350 million of convertible debt that we expect will be converted into equity rather than being paid at maturity.

Accordingly, we do not expect to have any significant new maturities until 2016. This provides us with a clear path for generating positive free cash flow and profitably growing our business, as well as much stronger balance sheet than just a few quarters ago.

And now, few comments on our outlook for the third quarter and full year. As Ken mentioned, we are raising our full year capital spending plans to around $500 million or 16% to 17% capital intensity.

I’d like to provide some color on how we are allocating these investments among our various businesses. Of the $500 million, we expect around 60% to be for packaging, 20% for tests, and 20% for infrastructure and R&D.

Our investments in infrastructure and R&D are about $65 million higher than 2009 in order to expand K4, implement the latest phases of our ERP system and to invest in advanced R&D efforts, including investments in next generation technologies like Through Silicon Via. Gross margin for the third quarter is expected to be in the range of 25% to 26%, up from 24% in Q2.

Higher net sales in the third quarter with the corresponding increase in capacity utilization and operating leverage are the principal drivers of this improvement. There are two other factors impacting this guidance.

First, an estimated $8 million increase in supplies, repairs and maintenance, and labor at these higher levels of demand. And second, an estimated $6 million increase in depreciation expense.

These increased manufacturing costs are driven by the additional capacity and people needed to support growth we expect in the third and fourth quarters. And finally, we expect operating expenses to decrease slightly to around $75 million.

In closing, we are very excited by our strong second quarter financial performance and the outlook for the third quarter and second half. Our balance sheet continues to get stronger, and free cash flow should remain positive for the fifth consecutive year.

With that, we will now open the call up for your questions. Operator?

Damian?

Yes, hi. Congratulations on a good quarter, guys.

I’m just wondering big picture, there is some concern right now that there is a weakness in the PC supply chain largely due to cannibalization by tablets. I know you guys have less exposure to computing compared to your major peers.

But I was wondering if there is a positive effect for Amkor that there is a mix shift from notebooks to tablets.

Thank you, Satya, for the comments. As you say, we have a lighter exposure in the PC segment.

But yes, it should bode well for us, because as some of that migrates into the handheld and handsets or tablets, we have a number of applications in there that should serve us well.

All right. A couple of quick follow-ups.

On the CapEx increase, it sounds reasonable related to your growth. I was curious if I back out (inaudible) CapEx for Q4, it’s down about 67% from Q3.

I was wondering why that’s the case. And Joanne, I was wondering if you could give us the outlook for interest expense and OpEx for Q3.

Thanks.

If I could just clarify the question on CapEx, you are asking, is it reasonable that CapEx is down in Q4 as compared to Q3?

Yes. Your guidance implied that Q4 CapEx is down.

I was wondering why that’s the case. And then I was just curious if it has any (inaudible) in Q4.

The reason why we are trying to get our CapEx as early as possible is, as Ken mentioned, several of our lines are very constrained. We’re seeing great demand for production.

So the quicker we can get the equipment in, the better we will be able to meet that demand. We think that there is – a lot of the Q4 demand CapEx will be to the front end of the quarter.

So that is a relatively typical seasonal pattern. The only time that Q4 tends to have higher CapEx is if we have a back end load for bump investment.

With respect to guiding to interest expense, with all the debt transactions, interest expense will come down to about $22 million. It’s a little bit higher than $22 million.

When you back off the interest income, it comes down almost exactly to $22 million. On the OpEx side, in my prepared remarks, we talked about OpEx coming down to $75 million for Q3, and I see that as a good run rate for Q4.

Awesome. Thanks.

Thank you.

Hi, thanks for taking my questions. First, I wanted to get a better understanding about the composition of your CapEx.

What is it that you think that – what is it that you spent it on in Q2? And what do you expect to spend it on in Q3?

The spending on CapEx is largely focused on our packaging assets. We are investing heavily in support of ball grid array and chip scale packaging, and then also the bumping that goes along to the extent that either of those are bumped for flip chip packaging.

That is the principal areas of spending. And with the roadmap as well as where it was for Q2, we are investing in leadframe, just to continue to modernize our leadframe assets to meet the demand we are seeing, and tests with a test attach rate of close to 50%, we continue to invest in test to scale up to these levels.

A lot of the facilities and infrastructure spending will happen in Q3 as opposed to Q2.

Okay. And with regards to the mix of packaging services that – I see that ball grid array was a standout growth in Q2.

And I was wondering – when you look at Q3 outlook, what do you think on the segment breakdown? What do you expect the segment breakdown to look like?

Will we see a growth in chip scale packaging because you’ve invested heavily there?

Yes. That’s absolutely right.

Communication tends to be very second half strong. So we started to see the rebound in Q2.

And we do expect that to continue to grow into Q3 and Q4. So BGA has been great and supportive to gaming as well as TVs, and we’ll start to see communications growth over ticket.

Thank you.

Hi. It’s Olga Levinzon calling in for CJ.

Thanks for taking my question. First of all, regarding your comments about capital intensity of about 16% to 17% for the year, that would suggest, as we sort of use the midpoint of your 3Q guide, that 4Q would be flattish to slightly higher.

So I just wanted to get your thoughts on if that’s how we should be reading it and what specific end markets are driving your incremental confidence in that level.

Olga, I think you are reading it accurately. That is the level of revenues that we would expect based off of that level of capital investment.

The end markets that are driving the second half demand is very heavy to the communications. We continue to expect growth in consumer as well, but it’s mostly communications-driven growth for the second half.

Got it. And then in terms of factoring in – outside of just regular product mix and the shift towards CSP, how should we think about your gross margins in the second half of the year and into 2011 as you balance out I guess some revenue growth versus all of this capacity coming online and adding to depreciation?

You have our guide for Q3 at 25% to 26%. So – included in there is some of the ramp costs.

As for growing – ramping costs, you have a tendency to put a little bit of the damper on the gross margins. We do expect the year to be mid-20s gross margin.

We continue to benefit from favorable mix changes. And over the longer term, we will continue to do pursue improving the margin profiles and drive higher value through technologies.

Is there a specific I guess limit that you see at a, let’s say, $800 million quarterly run rate for I guess gross margins assuming the current product mix?

It’s always very mix dependent. I would never suggest that any revenue number would suggest a peak revenue.

It’s very slow and it’s very slow to market conditions. Our prior peak was at 27%.

Q3, we are at 26%. And we feel really good about margins for the year at mid-20s.

Got it. Thank you.

Hey, guys, congratulations on a good quarter. Just, if I could, first, a clarification, Joanne.

Did you say that depreciation and amortization is going $6 million higher in Q3 and is that a good run rate to use through the end of the year? Or how should we thinking about D&A with CapEx, sort of anything here into the back half?

The number I mentioned in my prepared remarks is $6 million that depreciation is growing from Q2 to Q3. That isn’t really amortization, but amortization is relatively flat.

So that’s not really a significant trend. But in cost of goods sold, the increase in depreciation is about $6 million.

I would say, with the higher level of CapEx that we spoke of in our prepared remarks that we would see a similar increase, maybe slightly less into Q4.

Okay. And Joanne, as you think about the capital structure here with the transactions you completed in the quarter, you’ve got the two term loans now kind of in the year’s maturities, just the plan to cash flow your way out on these term loans that have the amortizations and then to continue to deal with other longer term maturities that you have opportunistically.

Yes, I think that’s well said, Eric. It’s – we've provided for a way to reduce debt by paying these term loans down over time.

As we have excess cash and we went to – we look to deploy it opportunistically. One of the areas that we will take a look at is continuing to bring down our debt either through open market repurchases.

Two of our notes become callable. One, at the end of this year, our convertible note becomes callable in December.

And then in June 2011, next year, the 9.25% due 2016 become callable. And so that will be another window of opportunity depending on our cash situation.

And Ken, if I can ask one question for you, you talked about investments in Taiwan. Could you give a little more color on that geographic region?

It’s been an area that’s highly important for test [ph], particularly on the PC side, an area that you’ve been somewhat under-exposed to in the past. As you think about your geographies, Japan, Taiwan and Korea, which kind of pose the biggest opportunities for you and the biggest – which were the geographies that you have the biggest opportunities and those that you kind of give you the most concern?

Well, I think that we are a global company. So we can service out of all the locations.

And that’s one of the strengths of our business model. It’s our diversity of our geographic footprint.

With respect to Taiwan, we have different competencies in different areas. And in Taiwan, we have some very significant wafer bump operations there.

And in fact, we, over the last several years, have focused on putting in some turnkey probed bump, a package in test for flip chip products for some leading edge products for a number of customers around the world, not necessarily just customers in Taiwan, but global customers on an international basis. So Taiwan has really been a good success story for us.

And we’ve – as I say, our bump operations there are world-class, and we have some of our leading lead-free bump operations are out of Taiwan. So Taiwan is solid for us.

It’s not our largest operation, obviously. The largest operation for Amkor in terms of revenue and units is, revenue is Korea; units is the Philippines and then followed by Taiwan and Japan and some of the other areas.

So I think we’re well diversified to service our customers from a number of different locations. And Taiwan is clearly one of them.

All right. Thanks very much.

Joanne, thanks.

Thank you.

Hi, thanks for taking my question. Some of your peers recently have commented on wafer bank inventories increasing, especially end of July.

And I understand your exposure might be different from your peers on the PC side. But can you comment on the wafer bank inventories right now?

I certainly can. We don’t maintain die banks for all of our customers.

Those that we do, they are trending down. But a more meaningful indicator for us would be customer die loadings or what we call die support versus forecast.

Customer gives us forecast, and to the extent that they release die for production, they call that die loading. That’s been very strong for us.

And so we are pleased. So business for us is very strong in that regard.

So we haven’t any kind of builds in wafer bank.

And there is a good – when we look at the wafer (inaudible), we haven’t see a slowdown in the amount of wafers in front of the line. So there is – our cycle times remain at higher level.

So there is a good backup of wafers in front. We haven’t seen any kind of contraction in the wafers that are being ready to be packaged.

Thanks. Very helpful.

Good afternoon. I just had a quick question on the gross margin.

You’ve – on particularly the components of the gross margin, you’ve been – the labor costs have been, sort of compared to the long-term trend, kind of a little bit lower than they have in the past. Can you comment on that, where you think that might go, and break down the gross margin and what the prospects might be in materials and other manufacturing?

Okay. With respect to materials, for Q2, it was 42% of revenues.

We do see that at a consistent level going forward to Q3. With respect to labor, that was 13% of revenues.

And that’s a comfortable run rate for us. As we’re ramping up capacity, it’s hard to get too much operating leverage because we’re adding people and training them ahead of the demand.

With respect to other manufacturing cost, which includes the depreciation expense, that was 21% for Q2. And we are seeing some increases in support of the higher levels of demand.

But as a percentage, we would expect to see that to stay about the same for Q3 and begin to taper down.

Okay. Is there any kind of shortage or pressure upward in terms of labor?

Each jurisdiction is very different. As Ken mentioned, 50% of our revenues – or almost 50% of our revenues comes from Korea.

We have a great workforce in Korea. They tend to be a very stable workforce.

We have a great access to some really brilliant people. And similarly in the Philippines, we have a very stable workforce.

And that’s 80%. China and Taiwan are very competitive labor markets.

And we try to attract the best and brightest and retain them and keep them working on behalf of our customers. But they are more challenging than our larger two factories.

Okay, thanks. That’s helpful.

Okay. Thank you.

I would like to thank everyone for joining us on this call today. And if there are no further questions, good bye and thank you.