All references in this Annual Report on Form 10-K to “Amkor,” “we,” “us,” “our” or the “company” are to Amkor Technology, Inc. and its subsidiaries. We refer to the Republic of Korea, which is also commonly known as South Korea, as “Korea”. All references to "J-Devices", "Toshiba" and ~~"Toshiba"~~"Qualcomm" are to J-Devices Corporation, our wholly owned subsidiary in Japan, ~~and~~ Toshiba Corporation and Qualcomm Incorporated, respectively. We also refer to our new factory and research and development facility in Incheon, Korea as "K5". Amounts preceded by ¥ are in Japanese ~~yen.~~yen, and amounts preceded by ₩ are in Korean won. Amkor^®, Amkor Technology^®, ChipArray^®, FusionQuad^®, J-Devices^®TM, MicroLeadFrame^®, TMV^®, SWIFT^TM®, and SLIM^TM, among others, are trademarks of Amkor Technology, Inc. All other trademarks appearing herein are held by their respective owners. Subsequent use of the above trademarks in this report may occur without the respective superscript symbol (^®and ^TM) in order to facilitate the readability of the report and are not a waiver of any rights that may be associated with the relevant trademarks.

This report contains forward-looking statements within the meaning of the federal securities laws, including but not limited to statements regarding: (1) the amount, timing and focus of our expected capital investments in ~~2016~~2018 including expenditures in support of ~~customer demand in the mobile communications market~~advanced packaging and ~~expenditures related to our K5 factory and research~~

Amkor is one of the world’s leading providers of outsourced semiconductor packaging and test services. Amkor pioneered the outsourcing of semiconductor packaging and test services through a predecessor corporation in 1968, and over the years we have built a leading position by:

We provide our services to integrated device manufacturers (“IDMs”), “fabless” semiconductor companies and contract foundries. IDMs generally design, manufacture, package and test semiconductors in their own facilities. However, the availability of technologically advanced outsourced manufacturing services has encouraged IDMs to outsource a portion of their manufacturing. Fabless semiconductor companies do not have factories and focus exclusively on the semiconductor design process and outsource virtually every step of the manufacturing process. Fabless semiconductor companies utilize contract foundries to manufacture their semiconductors in wafer form, and companies such as Amkor for their packaging and test needs. Some companies will engage a contract foundry to manage the complete semiconductor manufacturing process, and in turn, the contract foundry will outsource some of its packaging and test needs.

Our IDM customers include: ~~Infineon Technologies AG;~~ Intel Corporation; ~~Micron Technology, Inc.;~~ Renesas Electronics Corporation; STMicroelectronics N.V.; Texas Instruments Incorporated and Toshiba Corporation. Our fabless customers include: ~~Avago Technologies;~~ Broadcom ~~Corporation~~Limited, Qualcomm Incorporated and ~~Qualcomm Incorporated.~~Socionext Inc. Our contract foundry customers include: GlobalFoundries Inc. and Taiwan Semiconductor Manufacturing Company Limited.

Amkor files annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and Exchange Commission (the “SEC”). You may read and copy any document we file at the SEC’s Public Reference Room, 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for information on the Public Reference Room. The SEC maintains a ~~web site~~website that contains annual, quarterly and current reports, proxy statements and other information that issuers (including Amkor) file electronically with the SEC. The SEC’s ~~web site~~website is http://www.sec.gov.

Amkor’s ~~web site~~website is ~~http:~~https://www.amkor.com. Amkor makes available, free of charge, through its ~~web site,~~website, our annual reports on Form 10-K; quarterly reports on Form 10-Q; current reports on Form 8-K; Forms 3, 4 and 5 filed on behalf of directors

and executive officers and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We also make available, free of charge, through our ~~web site,~~website, our Corporate Governance Guidelines, the charters of the Audit Committee, Nominating and Governance Committee and Compensation Committee of our Board of Directors, our Code of Business Conduct, our Code of Ethics for Directors and other information and materials. The information on Amkor’s ~~web site~~website is not incorporated by reference into this report.

Semiconductor devices are the essential building blocks used in most electronic products. As electronic and semiconductor devices have evolved, several important trends have emerged that have fueled the growth of the overall semiconductor industry, as well as the market for outsourced semiconductor packaging and test services. These trends include:

Semiconductor companies outsource their packaging and test needs to service providers such as Amkor for the following reasons:

~~Semiconductor packaging and test technologies continue to become more sophisticated, complex and customized due to~~The increasing demands for miniaturization, greater functionality, lower power consumption and improved thermal and electrical ~~performance.~~performance are driving the continuous development of semiconductor packaging and test technologies that are more sophisticated, complex and customized. This trend has led many semiconductor companies and OEMs to view packaging and test as enabling technologies requiring ~~sophisticated~~the kind of leading-edge expertise for technological innovation found in the leading outsourced assembly and ~~technological innovation. Many~~test companies. At the same time, these companies are often looking to reduce the internal manufacturing and research and development costs in packaging and test. As a result, many of these companies are ~~also~~increasingly relying on packaging and test service providers as key sources for new package designs and advanced interconnect ~~technologies, thereby enabling them to reduce their internal research and development costs.~~technologies.

The semiconductor industry is cyclical by nature and impacted by broad economic factors, such as changes in worldwide gross domestic product and consumer spending. Semiconductor packaging and test are complex processes requiring substantial investment in specialized equipment, factories and human resources. As a result of this cyclicality and the large investments required, manufacturing facilities must operate at consistently high levels of utilization to be cost effective. Shorter product life cycles, coupled with the need to update or replace packaging and test equipment to accommodate new package types, make it more difficult for integrated semiconductor companies to maintain cost effective utilization of their packaging and test assets throughout semiconductor industry cycles. Packaging and test service providers, on the other hand, can typically use their assets to support a broad range of customers, potentially generating more efficient use of their production assets and a more cost effective solution.

We believe that semiconductor companies, together with their customers, are seeking to shorten the time-to-market for their new products, and that having an effective supply chain is a critical factor in facilitating timely and successful product introductions. Packaging and test service providers have the resources and expertise to timely develop their capabilities and implement new packaging technology in volume. For this reason, semiconductor companies and OEMs are leveraging the capabilities of packaging and test service providers to deliver their new products to market more quickly.

As semiconductor process technology migrates to larger wafers and smaller feature sizes, the cost of building a state-of-the-art wafer fabrication factory has risen significantly and can now be several billions of dollars. The high cost of investing in next generation silicon technology and equipment is causing many semiconductor companies to adopt or maintain a “fabless” or “fab-lite” strategy to reduce or eliminate their investment in wafer fabrication and associated packaging and test operations. As a result, these companies are increasing their reliance on outsourced providers of semiconductor manufacturing services, including packaging and test.

Our financial goals are sales growth and improved profitability, and we are focusing on the following strategies to achieve these goals:

We are an industry leader in developing and commercializing cost-effective advanced packaging and test technologies. These advanced technology solutions provide increased value to our ~~customers while typically generating gross margins above our corporate average. This is particularly true in the mobile device market, where growth has outpaced the semiconductor industry rate.~~customers. An important factor for success in the advanced packaging and test area is to generate reasonably quick returns on investments made ~~for~~in support of customers seeking ~~leading edge~~leading-edge technologies.

In recent years we have made significant investments in state-of-the-art facilities and equipment to provide services for the industry’s most complex devices. With approximately ~~475~~600 employees engaged in research ~~and development in 2015 focusing on the design~~ and development of new semiconductor packaging and test technologies, we are a technology leader in areas such as fine pitch bumping, advanced flip chip and wafer-level processing. During ~~2015,~~2017, we had success capitalizing on our advanced technology to achieve design wins and new product introductions in areas such as chips fabricated at 10, 14 and 16 nanometer ~~geometries and~~geometries; advanced SiP products including radio frequency ("RF"), front end modules and micro-electro-mechanical systems ("MEMS") ~~devices.~~devices; and wafer-level Chip Scale Packaging ("CSP") and wafer-level fan-out packages.

We work closely with our customers to develop cost-effective leading-edge packages for the next generation of devices, and we are making substantial progress in a number of areas. These include integrated technologies such as advanced SiP,

wafer-level fan-out, and Silicon Wafer Integrated Fan-out Technology ("SWIFT"~~) and Silicon-Less Integrated Module ("SLIM"~~) solutions which enable very thin, very small products combining application processors, memory, baseband and other peripheral ~~IC’s.~~integrated circuits ("ICs"). They also include packages utilizing Through Silicon Via ("TSV") interconnects and silicon interposers which enable the integration of high performance chips such as high bandwidth memory and graphics processors into a single package.

We believe that ~~the value added by~~ advanced packaging services will continue to grow as our customers and leading electronics OEMs strive for smaller device geometries, higher levels of speed and performance and lower power consumption. We intend to continue to leverage our investment in advanced technology to meet the demand for these services.

Another key to our success is to improve the utilization of our existing assets. The transition by leading edge customers to newer packaging and test equipment platforms typically frees up capacity in existing, previously installed equipment. As part of our strategy, we are focused on developing a second wave of customers to more effectively utilize these assets over a longer period of time.

In particular, we ~~have a concerted effort~~are devoting substantial resources to ~~increase~~increasing our sales to Chinese and Taiwanese fabless chip companies ~~since they~~which have a significant portion of the fast-growing mid-tier and entry-level segments of the mobile device market where much of the growth is occurring.

In 2015, we established a dedicated Greater China Business Unit, opened new sales offices in Shanghai, Beijing and Shenzhen, and continued hiring new salespeople, design engineers and customer service personnel to assist our customers in China.

A portion of our expanded Shanghai facility houses Qualcomm Communication Technologies (Shanghai) Co. Ltd., Qualcomm’s new semiconductor test facility. This new test center combines Amkor’s extensive test services experience and state-of-the-art cleanroom facilities with Qualcomm's industry leadership in cutting-edge product engineering and development. The co-location of the test center at our Shanghai factory helps to strengthen our close business relationship with a key customer.

As part of our plan to consolidate factory operations in Korea, we sold the land and buildings comprising our K1 factory in May 2017 for $142.4 million. We received 10% of the sale price at signing in November 2016 and the balance at closing, at which time we recognized a pre-tax gain of $108.1 million.

We completed our factory consolidation efforts in Japan in 2017. We closed multiple factories and transferred the business to other Japanese facilities. We believe that this consolidation will better align our manufacturing footprint with the demand environment and reduce our fixed costs.

Revenue growth is a significant objective for Amkor. We strive to grow in a balanced way and avoid over-reliance on any single market or customer. Our goal is to achieve more consistent financial performance through all phases of the business cycle. Our balanced growth strategy has four components, as follows:

From time to time we see attractive opportunities to grow our customer base and expand markets through strategic investments. For example, in 2017 we completed the acquisition of Nanium, S.A. ("Nanium"), a provider of wafer-level fan-out semiconductor packaging solutions. We believe that this acquisition strengthens our position in the market for wafer-level packaging. In 2015 we completed the acquisition of 100% of J-Devices, our outsourced semiconductor assembly and test ("OSAT") joint venture in Japan. We believe that with this acquisition we ~~have become~~are the largest OSAT by revenue for the automotive market, with ~~roughly $750 million~~over $1 billion in ~~combined~~ automotive-based revenues in ~~2015.~~2017. In addition, Renesas agreed to transfer most of its Singapore-based automotive microcontroller production to J-Devices’ factories. That transfer began in 2015 and ~~will be~~was completed in 2016.

We believe that selective growth through joint ventures, acquisitions and other strategic investments can help diversify our revenue streams, improve our profits and maintain our technological leadership.

The outsourced semiconductor packaging and test market is very competitive. We also compete with the internal semiconductor packaging and test capabilities of many of our customers and foundries. We believe we are well-positioned

We are a leader in developing and deploying advanced semiconductor packaging and test solutions. We have designed and developed several state-of-the-art package formats and technologies including our Package-on-Package (“PoP”) platform with Through Mold Via (“TMV”) technology, molded embedded packages, FusionQuad, flip chip ball grid array, multi-chip modules with a silicon interposer placed between the module chips and substrate, copper pillar bumping and fine pitch copper pillar flip chip packaging technologies. In addition, we believe that as semiconductor technology continues to achieve smaller device geometries with higher levels of speed and performance, packages will increasingly require wafer-level chip scale packaging, wafer-level fan-out, SWIFT and flip chip interconnect solutions and advanced ~~integrated and modular interconnect solutions that combine multiple active chips and other elements in a single package.~~SiP products. We have been investing in our technology leadership in ~~wafer bumping, wafer-level processing, advanced SiP, SLIM and SWIFT~~these packaging technologies. We have also been a leader in developing environmentally friendly ~~integrated circuit~~IC packaging, which involves the elimination of lead and certain other materials.

The semiconductor industry is now in a period of packaging development where integrated wafer-level fan-out and TSV interconnect technologies will be used to create the next generation of advanced packages. We continue to invest in developing the key processes and packaging and test technologies required for our customers to deliver advanced integrated and modular solutions to market. We are a leader in wafer thinning, micro-bumping, die stacking, hybrid packaging and TSV-based flip chip ~~innovation, and we are leveraging our technology development relationships with key customers in diverse applications to develop and deploy these packaging and test solutions.~~innovation.

Our customers include most of the world’s largest semiconductor companies and over the last four decades, we have developed long-standing relationships with many of these companies. We believe that our production excellence has been a key factor in our success in attracting and retaining customers. We work with our customers and our suppliers to develop proprietary process technologies to enhance our existing capabilities, reduce time-to-market, increase quality and lower costs.

We believe that our focus on research and product development will enable us to enter new markets early, capture market share and promote the adoption of our new package designs as industry standards. We collaborate with customers and leading OEMs to develop comprehensive packaging solutions that make it easier for next-generation semiconductors to be designed into next-generation end products. By collaborating with leading semiconductor companies and OEM electronic

companies, we gain access to technology roadmaps for next generation semiconductor designs and obtain the opportunity to develop new packages that satisfy their future requirements.

Creating successful interconnect solutions for advanced semiconductor devices often poses unique thermal, electrical and mechanical design challenges, and we employ a large number of engineers to solve these challenges. We provide services for a wide variety of products. This wide variety of packaging offerings is necessary to meet the diverse needs of our customers for the optimal combination of performance, size and cost attributes. Our solutions enable our customers to focus on semiconductor design and wafer fabrication while utilizing Amkor as their turnkey design, packaging and test services provider and, in many cases, their packaging technology innovator.

We also offer an extensive line of advanced probe and final test services for analog, digital, logic, mixed signal and RF semiconductor devices. We believe that the breadth of our design, packaging and test services is important to customers seeking to limit the number of their suppliers.

We have a broad and geographically diversified operating footprint strategically located in ~~six~~seven countries in many of the world’s important electronics manufacturing regions. We believe that our scale and scope allow us to provide cost effective solutions to our customers by:

For financial information about geographic areas, see Note 18 to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

There is a continuous push throughout the entire semiconductor supply chain for lower cost solutions. We work to maintain a competitive cost structure and make disciplined capital investment decisions so that we can provide cost-competitive solutions to our customers and achieve sustainable profitability and cash flow. Some of our cost control efforts have included: (1) improving the utilization of our existing assets; (2) developing new manufacturing methods to reduce processing costs; (3) utilizing flexible manufacturing lines that can accommodate a variety of products and customers; (4) increasing strip densities to drive higher throughput; ~~(3) migrating from gold wire~~(5) implementing more cost-effective materials; (6) utilizing our scale to ~~copper wire for certain wirebond packages~~drive world-wide purchasing leverage and ~~(4)~~(7) increasing labor productivity.

We operate in a cyclical industry. During an industry downturn we seek to reduce our costs and drive greater factory and administrative efficiencies. Cost control efforts can include reducing labor costs by temporarily lowering compensation, reducing employee and contractor headcount, shortening work weeks and obtaining labor-related foreign government subsidies where available.

In general, the semiconductor manufacturing process consists of ~~integrated circuit~~IC design, wafer fabrication, wafer probe, packaging and final test.

Integrated circuit design involves the laying out of electronic components, such as transistors, resistors, capacitors and the metallic interconnect of these components, to achieve the desired device functionality. Wafer fabrication is a multiple-step sequence of photolithographic and chemical processing steps during which the ~~integrated circuits~~IC's are gradually created on semiconductor material, typically a silicon wafer. Individual ~~integrated circuits~~IC's are generally known as a “chip” or “die”, and a single wafer will contain many die. Wafers are fabricated by two types of companies - IDMs which design and fabricate wafers using their own in-house manufacturing facilities, and contract foundries which manufacture wafers that are designed by fabless companies or other customers.

The packaging and test services we provide occur subsequent to wafer fabrication. The wafers that we receive from our customers are generally consigned to us; we do not own the consigned wafers or record their value in our financial statements. During wafer probe, each individual die is electrically tested, or probed, for defects. Packaging is the processing of bare die to facilitate electrical connections and heat dissipation and protect the die. The wafer is separated into individual die. Each good die is then assembled into a package that typically encapsulates the die for protection and creates the electrical connections used to connect the package to a printed circuit board, module or other part of the electronic device. In some packages, chips are attached to a substrate or leadframe carrier through wirebonding or flip chip interconnects and then encased in a protective material. Or, for a wafer-level package, the electrical interconnections are created directly on the surface of the die ~~(while the wafer is still intact)~~ so that the chip may be attached directly to other parts of an electronic

Our packages employ wirebond, flip chip, copper clip and other interconnect technologies. We use leadframe and substrate package carriers, and we perform a variety of test services.

Wirebond: In packages that employ wirebond interconnect technology, the die is mounted face up on the package carrier and the interconnections between the die and package carrier are made through very fine gold, silver or copper wires which are attached from the bond pads of the die to the package carrier. The interconnections are placed along the perimeter of the die. Wirebonding is generally considered to be the most cost-effective and flexible interconnect technology and is used to assemble the majority of semiconductor packages.

Flip Chip: In packages that employ flip chip interconnect technology, the interconnections between the die and package carrier are made through conductive “bumps” that are placed directly on the die surface utilizing a process called wafer bumping. The bumped die is then “flipped over” and placed face down, with the bumps connecting directly to the package carrier. Flip chip allows a higher number of interconnects than wirebond as it uses the entire surface area of the die, and sometimes the perimeter as well, instead of just the perimeter as used by most wirebond packages. Flip chip also provides enhanced thermal and electrical performance, and enables smaller die and thinner, smaller form factors (or physical package dimensions).

The wafer bumping process consists of preparing the wafer for bumping and forming or placing the bumps. Preparation may include cleaning, removing insulating oxides and providing a pad metallurgy that will protect the interconnections while making good mechanical and electrical connection between the bump and the wafer.

Copper Clip: Copper clip interconnect technology uses a solid copper bridge or “clip” to connect the die to the package carrier. The clip allows a higher level of current flow than a wire and also provides a better method of heat transfer from the die. The clip is either spot welded, or more often re-flow soldered, to the die pads and the package carrier pads.

Leadframe: A leadframe is a miniature sheet of metal, generally made of copper and silver alloys, on which a pattern of electrical connections (or “leads”) has been cut. The leads are generally placed around the perimeter of the leadframe and are used to connect the package to the system board. The number of leads on an individual leadframe is limited as electrical shorting can occur if the leads are placed too close together.

Substrate: A substrate is a laminate of either single or multiple layers of epoxy resin, woven glass fibers and metal conductors. ~~Bumps~~Solder bumps provide the electrical connection to the system board. The bumps are typically distributed evenly across the bottom surface of the substrate (called a “ball grid array” format). This allows ~~greater~~less distance between individual leads and a higher number of interconnects than leadframe packages.

Amkor provides a complete range of semiconductor testing services including wafer testing or probe and final test. We offer a full range of test software, hardware, integration and product engineering services, and we support a range of business models and test capabilities. Substantially all of our test business is derived from testing packages that we assemble.

Wafer Test Services: Wafer test, also referred to as wafer probe, is performed after wafer fabrication or wafer bumping to screen out defective devices prior to packaging. We offer a range of wafer test coverage that can be tailored based on the cost and complexity of the die, the package and the product. These services range from coarse level screening for major defects all the way up to probing at high digital speeds and can include full radio frequency transmit and receive as well as testing at multiple temperatures. Wafer testing can also involve a range of wafer mapping and inspection operations.

Final Test Services: After the packaging process, final test is performed to ensure that the packaged device meets the customer’s requirements. Final test spans a range of rigor and complexity depending on the device and end market application. More rigorous types of final test include testing multiple times under different electrical and temperature conditions and before and after device reliability stresses, such as burn-in. In addition to electrical testing, specialized solutions are required for packages that also process non-electric stimuli.

The electrical tests are a mix of functional, structural and system-level tests depending on the customer’s requirements and cost and reliability parameters. The electrical test equipment we use includes commercially available automated test equipment, customized and proprietary system level test equipment and innovative types of low cost test equipment developed by Amkor.

We offer a broad range of advanced and mainstream packaging and test services to our customers. We refer to our flip chip, wafer-level processing and related test services as “Advanced Products”, and our wirebond packaging and related test services as “Mainstream Products”. The following table sets forth, for the periods indicated, the amount of advanced and mainstream packaging and test net sales and the percentage of such net ~~sales (excluding J-Devices):~~sales:

Year Ended December 31,
2015 2014 2013
(In millions, except percentage of net sales)
Advanced products $ 1,433
49.7 % $ 1,553
49.6 % $ 1,451
49.1 %
Mainstream products 1,452
50.3 % 1,576
50.4 % 1,505
50.9 %
Total net sales $ 2,885
100.0 % $ 3,129
100.0 % $ 2,956
100.0 %



	For the Year Ended December 31,
	2017				2016				2015
	(In millions, except percentage of net sales)
Advanced Products	$	1,950	46.6	%	$	1,680	43.1	%	$	1,433	49.7	%
Mainstream Products	2,236		53.4	%	2,214		56.9	%	1,452		50.3	%
Total net sales	$	4,186	100.0	%	$	3,894	100.0	%	$	2,885	100.0	%

~~Substantially all~~We began consolidating J-Devices in 2016 and approximately 90% of J-Devices' $913.7 million of net sales ~~are~~in 2016 were generated from mainstream packages. J-Devices had net sales of $812.9 million, $923.0 million and $825.1 million for 2015, 2014 and 2013, respectively. In 2015, we had net sales of approximately $725 million from our advanced SiP modules which are included in either advanced products or mainstream products depending upon the interconnect technology used in the module.Mainstream Products.

Our ~~advanced packages~~Advanced Products include flip chip chip scale packages, wafer-level ~~chip scale~~ packages and flip chip ball grid array packages. These package families use flip chip interconnect technology so that the die can be connected to a substrate package carrier or, in the case of wafer-level chip scale packages, directly to a printed circuit board.

Flip Chip Chip Scale Package ("FC CSP") Products: FC CSP packages are small form factor packages where the substrate size is not much larger than the die itself. The size advantage provided by chip scale packaging technologies has made FC CSP an attractive choice for a wide variety of applications that require very small form factors such as smartphones, tablets and other mobile consumer electronic devices.

Flip chip stacked chip scale packages ("FC SCSP") stack a second die on top of the original flip-chip die. The top die is typically a memory device, and wirebond interconnects are used to attach it to the substrate. FC SCSP is frequently used to stack memory on top of digital baseband and applications processors for use in mobile devices.

We continue to drive thinner package solutions for our PoP technology through the development of ultra-thin substrates and enhancing our pre-stacking and thin die handling capabilities.

We developed fine pitch copper pillar flip chip interconnect technology, which creates interconnections at finer pitches using a plating process to reduce the number of substrate layers to facilitate very thin packages. This innovative solution is also an enabling technology for ~~2.5D and 3D~~ package stacking with TSVs.

Flip Chip Ball Grid Array ("FC BGA") Products: FC BGA packages are large form factor substrate-based packages which are used where processing power and speed are needed, and small form factors are not required. Our FC BGA packages are assembled around state-of-the-art substrates. Utilizing multiple high density routing layers, laser drilled vias, and ultra-fine line and space metallization, FC BGA substrates have the highest routing density available. The variety of FC BGA package options allows package selection to be tailored to the specific thermal needs of the end product. We offer FC BGA packaging in a variety of product formats to fit a wide range of end application requirements, including networking, storage, computing and consumer applications.

~~Our Flip Chip Molded BGA ("FCmBGA")~~Wafer-level Package Products: We offer three types of wafer-level packages: Wafer-level CSP, wafer-level fan-out and SWIFT.

Our ~~mainstream packages~~Mainstream Products include leadframe packages, substrate-based wirebond packages and MEMS packages. These package families use wirebond interconnect technology to connect a die to a leadframe or substrate package carrier.

Leadframe Packages: Leadframe packages use wirebond or flip chip technology to interconnect a die to a leadframe package carrier. Leadframe packages are used in many electronic devices and remain the most practical and cost-effective solution for many low to medium pin count applications.

Traditional leadframe packages support a wide variety of device types and applications. Two of our most popular traditional leadframe package types are small outline integrated circuit and quad flat package, commonly known as “dual” and “quad” products, respectively, based upon the number of sides from which the leads extend. The traditional leadframe package family has evolved from “through hole design,” where the leads are plugged into holes on the circuit board to “surface mount design,” where the leads are soldered to the surface of the circuit board. We offer a wide range of lead counts and body sizes to satisfy variations in the size of customers’ semiconductor devices.

Through a process of continuous engineering and customization, we have designed several leadframe package types that are thinner and smaller than traditional leadframe packages, and which have the ability to accommodate more leads on the perimeter of the package. These leadframe packages typically have superior thermal and electrical characteristics, which allow them to dissipate heat generated by high-powered semiconductor devices while providing enhanced electrical connectivity. We are developing increasingly smaller versions of these packages to keep pace with continually shrinking semiconductor device sizes and demand for miniaturization of portable electronic products. One of our more successful leadframe package offerings is the MicroLeadFrame family of quad flat no lead packages.

Power discrete devices use a leadframe as the package carrier and primarily use wirebond interconnect technology. However, power applications that require improved thermal and electrical performance will use packaging with copper clip interconnect technology.

Substrate-based Wirebond Packages: Substrate-based wirebond packages use wirebond technology to connect a die to a substrate. Some of our packages in this category include stacked CSP, ~~chip array~~wirebond ball grid array ~~("CABGA")~~ packages and plastic ball grid array ("PBGA") packages.

Stacked CSP technology enables the stacking of a wide range of different semiconductor devices to deliver high levels of silicon integration and area efficiency. Stacked CSP utilizes high density thin core substrates and advanced materials, along with leading-edge wafer thinning, die attach, and molding capabilities to stack multiple die on a substrate. Stacked CSP is ideal for memory, including NAND, NOR and DRAM memory, and mixed signal applications.

~~Chip~~Wirebond ball grid array ~~BGA~~ packages offer a broad selection of ball array pitches, ball counts and body sizes, single and multi-die layouts, stacked die and passive component integration. They are applicable for a wide range of semiconductors requiring a smaller package size than conventional PBGAs or leadframe packages.

Plastic ball grid array packages are used in applications requiring higher pin count than leadframe packages, but typically have lower pin counts than flip chip. PBGA packages are designed for low inductance, improved thermal operation and enhanced surface-mount technology ability. Custom performance enhancements, like ground and power planes, are also available.

Micro-Electro-Mechanical Systems ~~("MEMS")~~ Packages: MEMS are miniaturized mechanical and electro-mechanical devices that can sense and provide information about the physical world and sometimes trigger a response. Examples of MEMS devices include microphones, accelerometers, airbag deployment sensors, gyrometers, magnetometers, and humidity, temperature and pressure sensors. We also specialize in sensor fusion products which utilize our cavity MEMS platform and combine multiple sensors into a single package. MEMS packages leverage our expertise in wafer thinning, die stacking, wirebonding and flip chip interconnect to deliver sophisticated products with a very small form factor. ~~In 2015, we introduced sensor fusion products which utilize our cavity MEMS platform and~~

Advanced SiP modules combine multiple ~~sensors~~semiconductor and other electronic components with different functionalities into a single package. These modules use wirebond, flip chip or wafer-level interconnect technologies. Components can include passive devices (inductors, capacitors, resistors, filters and diplexers), antennas and mechanical parts.

The increasing demand for miniaturization and higher functionality at competitive cost is driving the adoption of advanced SiP in new products. Advanced SiP modules are used for many applications such as RF and front end modules, basebands, connectivity, fingerprint sensors, display and touch screen drivers, sensors and MEMS, NAND memory and solid state drives. Advanced SiP modules are found in many products including smartphones and tablets, automobiles, wearable electronics, high-performance gaming systems, computers and network systems.

In 2017 and 2016, we had net sales of approximately $825 million and $775 million, respectively, from our advanced SiP modules which are included in either Advanced Products or Mainstream Products depending upon the interconnect technology used in the module.

The following table lists the end markets that use our ~~products:~~products and sets forth, for the periods indicated, the percentage of net sales in each end market. Based on our periodic evaluation of end markets, we aggregated our networking end market into our computing end market. All prior periods have been retrospectively recast to conform with current year presentation.

Our research efforts focus on developing new packaging solutions and test services, and improving the efficiency and capabilities of our existing production processes. We believe that technology development is one of the keys to success in the semiconductor packaging and test industry. By concentrating our research and development on our customers’ needs for innovative packages, increased performance and lower cost, we gain opportunities to enter markets early, capture market share and promote our new package offerings as industry standards.

One of our top priorities is developing low-cost packaging solutions for the next generation of mobile devices, which minimize material and processing costs, while maximizing yields and reliability. This development effort is particularly important for customers seeking cost-effective alternatives to further silicon-level integration. Another important focus area is the development of wafer-level packages for larger chips. These wafer-level chip-scale packages and wafer-level fan-out (low density) packages are increasingly the preferred package type for many chips used in mobile devices. They provide a very low-profile product at a competitive cost. We are also developing integrated (high density) wafer-level fan-out solutions called SWIFT ~~and SLIM~~ which enable very thin, very small products by combining application processors, memory, baseband and other peripheral ~~IC’s.~~IC’s into one packaged module. Through the use of die partitioning and heterogeneous die integration, these sub-system and system modules provide higher functionality at lower cost versus multi-package options.

Our research and development employees are located throughout Asia and in the United States. In ~~2015~~2017, we had approximately ~~475~~600 employees engaged in research and development activities. In ~~2015~~2017, ~~2014~~2016 and ~~2013~~2015, we incurred ~~$82.0~~$166.6 million, ~~$76.9~~$117.2 million and ~~$64.6~~$82.0 million, respectively, of research and development expense. The 2017 increase was primarily due to development and other costs associated with our new K5 factory and research and development facility in Korea. In addition, the consolidation of J-Devices added $18.3 million in research and development expenses for the year ended December 31, 2016.

Our sales offices are located throughout Asia, Europe and North America. Our support personnel manage and promote our packaging and test services and provide key customer and technical support. To provide comprehensive sales and customer service, we typically assign our customers a direct support team consisting of an account manager, technical program manager, test program manager and both field and factory customer support representatives. We also support our largest multinational customers from multiple office locations to ensure that we are aligned with their global operational and business requirements.

Our direct support teams are further supported by an extended staff of product, process, quality and reliability engineers, as well as marketing and advertising specialists, information systems technicians and factory personnel. Together, these direct and extended support teams deliver an array of services to our customers. ~~These services include:~~

Our sales have generally been higher in the second half of the year than in the first half due to the effect of consumer buying patterns in the U.S., Europe and Asia and the timing of flagship mobile device launches. In addition, semiconductor companies generally reduce their production during the holidays at the end of December which generally results in a decrease in packaging and test services during the first quarter. ~~Generally soft~~General economic conditions, ~~and a lack of compelling new mobile products constrained~~changes in our supply chain or overall demand ~~during 2015. The high-end smartphone market was a particular issue for us~~ in ~~2015, in part due to the lackluster general market conditions, and in part because of changes in the supply chain which impacted one~~any of our ~~major customers. As a result, we did not see~~end-markets can impact our ~~normal seasonal revenue patterns in 2015.~~seasonality.

In ~~2015,~~2017, we had approximately ~~250~~275 customers, including many of the largest semiconductor companies in the world. Our ten largest customers accounted for ~~63%~~67% of our net sales in ~~2015. Qualcomm Incorporated and~~2017. Toshiba ~~each~~ accounted for more than 10% of our net sales in ~~2015.~~2017.

Our materials are used primarily for packaging activities. Our packaging operations depend upon obtaining adequate supplies of materials on a timely basis. The principal materials used in our packaging process are leadframes, laminate substrates, gold and copper wire, mold compound, epoxy, tubes and trays. The silicon wafer is generally consigned from the customer. We do not take ownership of the customer consigned wafer, and title and risk of loss remains with the customer for these materials. Test materials constitute a very small portion of our total test cost. We purchase materials based on customer forecasts, and our customers are generally responsible for any unused materials which we purchased based on such forecasts.

We obtain the materials required for packaging services from various suppliers. We source most of our materials, including critical materials such as leadframes, laminate substrates and gold wire, from a limited group of suppliers. We work closely with our primary material suppliers in an effort to ensure consistent quality and that materials are available and delivered on ~~time and, we~~time. We also negotiate world-wide pricing agreements with our major suppliers to take advantage of the scale of our operations.

Our ability to meet the changing demand from our customers for manufacturing capacity depends upon obtaining packaging and test equipment in a timely manner. We work closely with our main equipment suppliers to coordinate the ordering and delivery of equipment to meet our expected capacity needs.

The primary types of equipment used in providing our packaging services are wirebonders and die bonders. In addition, we maintain a variety of other packaging equipment, including mold, singulation, die attach, ball attach and wafer backgrind, along with numerous other types of manufacturing equipment. A substantial portion of our packaging equipment base can generally be used and adapted to support the manufacture of many of our packages through the use of relatively low cost

tooling, although equipment used in advanced packaging can be more difficult to redeploy than equipment used in traditional wirebond packaging.

We also purchase wafer bumping equipment to facilitate our flip chip and wafer level packaging services. Wafer bump equipment includes sputter and spin coaters, electroplating equipment, reflow ovens and other types of equipment. This equipment tends to have longer lead times for delivery and installation than other packaging equipment and is sold in relatively larger increments of capacity.

The primary equipment used in the testing process includes testers, handlers and probers. Handlers are used to transfer individual or small groups of packaged ~~integrated circuits~~IC's to a tester. Test equipment is generally a more capital intensive portion of the process and tends to have longer delivery lead times than most types of packaging equipment. We focus our capital expenditures on standardized tester platforms in order to maximize test equipment utilization where possible. In some cases, our customers will consign test equipment to us. In those cases, we operate the equipment on their behalf but do not own it.

The semiconductor packaging process uses chemicals, materials and gases and generates byproducts that are subject to extensive governmental regulations. For example, we produce liquid waste when semiconductor wafers are diced into chips with the aid of diamond saws, then cooled with running water. In addition, semiconductor packages have historically utilized metallic alloys containing lead (Pb) within the interconnect terminals typically referred to as leads, pins or balls. The usage of lead (Pb) has decreased over the past few years, as we have ramped volume production of alternative lead (Pb)-free processes. Our operations are subject to numerous laws and regulations governing the protection of the environment, disposal of waste, discharges into water, emissions into the atmosphere and the protection of employee health and safety.

We are engaged in a continuing program to assure compliance with federal, state and local environmental laws and regulations. We do not expect that capital expenditures or other costs attributable to compliance with environmental laws and regulations will have a material adverse effect on our business, liquidity, results of operations, financial condition or cash flows.

We are committed to sound and responsible environmental practices in conducting our business. We are an active member of the Responsible Business Alliance (formerly known as the Electronics Industry Citizenship Coalition, or "EICC"), the largest industry organization dedicated to supply chain responsibility. We also continuously engage with our customers and suppliers to improve the sustainability of our operations around the world.

The outsourced semiconductor packaging and test market is very competitive. We face substantial competition from established packaging and test service providers primarily located in Asia, including companies with significant manufacturing capacity, financial resources, research and development operations, marketing and other capabilities. These companies include Advanced Semiconductor Engineering, Inc., Siliconware Precision Industries Co., Ltd. and ~~STATS ChipPAC Ltd, which was acquired by~~ Jiangsu Changjiang Electronics Technology Co., ~~Ltd in 2015.~~Ltd.

Such companies also have developed relationships with most of the world’s largest semiconductor companies, including current or potential customers of Amkor. We also compete with the internal semiconductor packaging and test capabilities of many of our customers and the contract foundries. Our IDM customers continually evaluate the attractiveness of outsourced services against their own in-house packaging and test services and at times may decide to shift some or all of their outsourced packaging and test services to internally sourced capacity. We also compete with contract foundries, such as Taiwan Semiconductor Manufacturing Company Limited and Samsung Electronics Co., Ltd., which offer full turnkey services from silicon wafer fabrication through packaging and final test. In addition, we compete with companies that offer only test services and not packaging.

The principal elements of competition in the semiconductor packaging and test services market include:

We maintain an active program to protect and derive value from our investment in technology and the associated intellectual property rights. Intellectual property rights that apply to our various products and services include patents, copyrights, trade secrets and trademarks. We have filed and obtained a number of patents in the U.S. and abroad, and their durations vary depending on the jurisdiction in which each patent is filed. Although our patents are an important element of our intellectual property strategy as a whole, we are not materially dependent on any one patent or any one technology. We expect to continue to file patent applications when appropriate to protect our proprietary technologies, but we cannot assure you that we will receive patents from pending or future applications. In addition, any patents we obtain may be challenged, invalidated or circumvented and may not provide meaningful protection or other commercial advantage to us.

We also protect and maintain the confidentiality of certain ~~details~~information about our processes, products and strategies ~~as trade secrets by maintaining the confidentiality of the information~~which we believe provides us with a competitive advantage. We have ongoing programs designed to maintain

In ~~2015,~~2017, Amkor had approximately ~~22,200~~29,300 full-time employees. ~~On December 30, 2015, we added approximately 4,500 additional employees through our acquisition of J-Devices.~~ We believe that our relations with our employees are good, and we have not experienced a work stoppage in any of our factories. Our employees in ~~Europe,~~ the Philippines, Taiwan and the U.S. are not represented by any union. Certain employees at our factories in China, Japan, Korea, Malaysia and ~~Malaysia~~Portugal are members of a union, and we operate subject to collective bargaining agreements that we have entered into with these unions.

The factors discussed below are cautionary statements that identify important factors and risks that could cause actual results to differ materially from those anticipated by the forward-looking statements contained in this report. For more information regarding the forward-looking statements contained in this report, see the Table of Contents of this Annual Report on Form 10-K. You should carefully consider the risks and uncertainties described below, together with all of the other information included in this report, in considering our business and prospects. The risks and uncertainties described below are not the only ones facing Amkor. Additional risks and uncertainties not presently known to us may also impair our business operations. The occurrence of any of the following risks could affect our business, liquidity, results of operations, financial condition or cash flows.

Our business is impacted by market conditions in the semiconductor industry, which is cyclical by nature and impacted by broad economic factors, such as world-wide gross domestic product and consumer spending. The semiconductor industry has experienced significant and sometimes sudden and prolonged downturns in the past. For example, the financial crisis and global recession in 2008 and 2009 resulted in a downturn in the semiconductor industry that adversely affected our business and results of operations during those periods. The economic recovery since that time has been slow and uneven. If the industry or markets we compete in experience slower, or even negative growth, our business and results of operations may be adversely affected.

Since our business is, and will continue to be, dependent on the requirements of semiconductor companies for outsourced packaging and test services, any downturn in the semiconductor industry or any other industry that uses a significant number of semiconductor devices, such as telecommunications, consumer electronics, or computing, could have a material adverse effect on our business and operating results. During downturns, we have experienced, among other things, reduced demand, excess capacity and reduced sales. For example, generally soft economic conditions and a lack of compelling new mobile products constrained overall demand during 2015. ~~We expect the mobile device market conditions to remain sluggish in the first half of 2016 as customers continue to cautiously manage inventories.~~ Macroeconomic uncertainties and a cautious business climate are also expected to constrain the revenue growth in our business. It is difficult to predict the timing, strength or duration of any economic slowdown or subsequent economic recovery, which, in turn, makes it more challenging for us to forecast our operating results, make business decisions and identify risks that may affect our business, sources and uses of cash, financial condition and results of operations. Additionally, if industry conditions deteriorate, we could suffer significant losses, as we have in the past, which could materially impact our business, liquidity, results of operations, financial condition and cash flows.

Many factors, including the impact of adverse economic conditions, could have a material adverse effect on our net sales, gross profit, operating results and cash flows, or lead to significant variability of quarterly or annual operating results. Our profitability and ability to generate cash from operations is principally dependent upon demand for semiconductors, the utilization of our capacity, semiconductor package mix, the average selling price of our services, our ability to manage our capital expenditures and our ability to control our costs including labor, material, overhead and financing costs.

Our net sales, gross profit, operating income and cash flows have historically fluctuated significantly from quarter to quarter as a result of many of the following factors, over which we have little or no control and which we expect to continue to impact our business:

We provide packaging and test services through our factories and other operations located in China, Japan, Korea, Malaysia, the Philippines, Portugal and Taiwan. Substantially all of our property, plant and equipment is located outside of the United States. Moreover, many of our customers and the vendors in our supply chain are located outside the U.S. The following are some of the risks we face in doing business internationally:

In particular, we have significant facilities and other investments in South Korea, and there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon and long-range missile programs as well as its military actions in the region. Furthermore, there has been a history of conflict and a recent rise in tensions within and among other countries in the region.

The outsourced semiconductor packaging and test market is very competitive. We face substantial competition from established and emerging packaging and test service providers primarily located in Asia, including companies with significantly greater processing capacity, financial resources, local presence, research and development operations, marketing, technology and other capabilities. We also may face increased competition from domestic companies located in the People’s Republic of China, or the PRC, where there are government-supported efforts to promote the development and growth of the local semiconductor industry. For example, STATS ChipPAC was acquired in 2015 by Jiangsu Electronics Technology Co., Ltd., a local PRC company. We may be at a disadvantage in attempting to compete with entities associated with such government-supported initiatives based on their lower cost of capital, access to government resources and

incentives, preferential sourcing practices, stronger local relationships or otherwise. Our competitors may also have established relationships, or enter into new strategic relationships, with one or more of the large semiconductor companies that are our current or potential customers, or key suppliers to these customers. Consolidation among our competitors could also strengthen their competitive position. For example, Advanced Semiconductor Engineering, Inc. and Siliconware Precision Industries Co., Ltd. have announced that they are scheduled to become sister companies under a new joint holding company in April 2018.

We also face competition from the internal capabilities and capacity of many of our current and potential IDM and foundry customers. In addition, we compete with contract foundries, such as Taiwan Semiconductor Manufacturing Company Limited and Samsung Electronics Co., Ltd., which offer full turnkey services from silicon wafer fabrication through packaging and final test. These semiconductor foundries, which are substantially larger and have greater financial resources than we do, have expanded their operations to include packaging and test services, and may continue to expand these capabilities in the future.

We cannot assure you that we will be able to compete successfully in the future against our existing or potential competitors or that our customers will not rely on internal sources for packaging and test services, or that our business, liquidity, results of operations, financial condition and cash flows will not be adversely affected by such increased competition.

Our packaging and test business does not typically operate with any material backlog. Our quarterly net sales from packaging and test services are substantially dependent upon our customers’ demand in that quarter. None of our customers have committed to purchase any significant amount of packaging or test services or to provide us with binding forecasts of demand for packaging and test services for any future period, in any material amount. In addition, we sometimes experience double booking by customers and our customers often reduce, cancel or delay their purchases of packaging and test services for a variety of reasons including industry-wide, customer-specific and Amkor-specific reasons. This makes it difficult for us to forecast our capacity utilization and net sales in future periods. Since a large portion of our costs is fixed and our expense levels are based in part on our expectations of future sales, we may not be able to adjust costs in a timely manner to compensate for any sales shortfall. If we are unable to adjust costs in a timely manner, our margins, operating results, financial condition and cash flows would be adversely affected.

Our operations are characterized by relatively high fixed costs. Our profitability depends in part not only on pricing levels for our packaging and test services, but also on the efficient utilization of our human resources and packaging and test equipment. Increases or decreases in our capacity utilization can significantly affect gross margins. In periods of low demand, we experience relatively low capacity utilization in our operations, which leads to reduced margins during that period. Transitions between different packaging technologies, such as the transition from gold wirebond to flip chip and copper wirebond packages, can also impact our capacity utilization if we do not efficiently redeploy our equipment for other packaging and test opportunities. For example, in 2011 the migration of some customer demand from wirebond to flip chip packages resulted in under-utilized wirebond assets which negatively impacted our capacity utilization and gross margin. We cannot assure you that we will be able to achieve consistently high capacity utilization, and if we fail to do so, our gross margins ~~may~~will be negatively impacted. If our gross margins decrease, our business, liquidity, results of operations, financial condition and cash flows could be materially adversely affected.

In addition, our fixed operating costs have increased in recent years in part as a result of our efforts to expand our capacity through significant capital expenditures. Forecasted customer demand for which we have made capital investments may not materialize, especially if industry conditions deteriorate. As a result, our sales may not adequately cover fixed costs resulting in reduced profit levels or causing significant losses, both of which may adversely impact our business, liquidity, results of operations, financial condition and cash flows.

We periodically provide guidance to investors with respect to certain financial information for future periods. Securities analysts also periodically publish their own projections with respect to our future operating results. As discussed above under “Fluctuations in Operating Results and Cash Flows - Our Operating Results and Cash Flows Have Varied and May Vary Significantly as a Result of Factors That We Cannot Control,” our operating results and cash flows vary significantly and are difficult to accurately predict. Volatility in customer forecasts and fluctuations in global consumer demand make it particularly difficult to predict future results. To the extent we fail to meet or exceed our own guidance or the analyst projections for any reason, the trading prices of our securities may be adversely impacted. Moreover, even if we do meet

Prices for packaging and test services have generally declined over time, and sometimes prices can change significantly in relatively short periods of time. We expect downward pressure on average selling prices for our packaging and test services to continue in the future, and this pressure may intensify during downturns in business. If we are unable to offset a decline in average selling prices by developing and marketing new packages with higher prices, reducing our purchasing costs, recovering more of our material cost increases from our customers and reducing our manufacturing costs, our business, liquidity, results of operations, financial condition and cash flows could be materially adversely affected.

Historically, we have been dependent on the trend in outsourcing of packaging and test services by IDM customers. Our IDM and foundry customers continually evaluate the need for outsourced services against their own in-house packaging and test services. As a result, at any time and for a variety of reasons, IDMs and foundries may decide to shift some or all of their outsourced packaging and test services to internally sourced capacity.

The reasons IDMs and foundries may shift their outsourced business to internal capacity include:

In a downturn in the semiconductor industry, IDMs and foundries could respond by shifting some or all outsourced packaging and test services to internally serviced capacity on a ~~short term~~short-term basis. Also, the IDMs and foundries could curtail or reverse the trend of outsourcing packaging and test services. If we experience a significant loss of IDM or foundry business, it could have a material adverse effect on our business, liquidity, results of operations, financial condition and cash flows, especially during a prolonged industry downturn.

We have a significant amount of indebtedness, and the terms of the agreements governing our indebtedness allow us and our subsidiaries to incur more debt, subject to certain limitations. As of December 31, ~~2015,~~2017, our total debt balance was ~~$1,595.9~~

$1,364.4 million, of which ~~$76.8~~$123.8 million was classified as a current liability and ~~$533.5~~$559.4 million was collateralized indebtedness at our subsidiaries. We may consider investments in joint ventures, increased capital expenditures or acquisitions which may increase our indebtedness. If new debt is added to our consolidated debt level, the related risks that we face could intensify.

Our substantial indebtedness could:

We assess our liquidity based on our current expectations regarding sales, operating expenses, capital spending and debt service requirements and other funding needs. Our liquidity is affected by, among other things, the performance of our business, our capital expenditure and other investment levels and our ability to repay debt and other long-term obligations out of our operating cash flows or with the proceeds of debt or equity financings.

We operate in a ~~capital intensive~~capital-intensive industry. We had capital expenditures of ~~$538.0~~$550.9 million in ~~2015.~~2017. Servicing our current and future customers requires that we incur significant operating expenses and continue to make significant capital expenditures and other investments, which are generally made in advance of the related revenues and without firm customer commitments. Ultimately the actual amount of our capital expenditures for ~~2016~~2018 and thereafter may vary materially and will depend on several factors. These factors include, among others, the amount, timing and implementation of our capital projects, including those under review and those not yet planned, the performance of our business, economic and market conditions, the cash needs and investment opportunities for the business, the need for additional capacity and facilities and the availability of cash flows from operations or financing.

In addition, we have a significant level of debt, which requires significant scheduled principal and interest payments in the coming years. The sources funding our operations, including making capital expenditures and other investments and servicing principal and interest obligations with respect to our debt, are cash flows from our operations, existing cash and cash equivalents, borrowings under available debt facilities, or proceeds from any additional debt or equity financing.

The health of the worldwide banking system and capital markets affects our liquidity. If financial institutions that have extended credit commitments to us are adversely affected by the conditions of the U.S., foreign or international banking system and capital markets, they may refuse or be unable to fund borrowings under their credit commitments to us. Volatility

in the banking system and capital markets could also make it difficult or more expensive for us to maintain our existing credit facilities or refinance our debt.

The trading price of our common stock has been, and is likely to continue to be, highly volatile and could be subject to wide fluctuations. Such fluctuations could impact our decision or ability to utilize the equity markets as a potential source of our funding needs in the future.

In addition, there is a risk that we could fail to generate the necessary net income or operating cash flows to meet the funding needs of our business due to a variety of factors, including the other factors discussed in this "Risk Factors" section. If we

The indentures and agreements governing our existing debt, and debt we may incur in the future, contain, or may contain, affirmative and negative covenants that materially limit our ability to take certain actions, including our ability to incur debt, pay dividends and repurchase stock, make certain investments and other payments, enter into certain mergers and consolidations, engage in sale leaseback transactions and encumber and dispose of assets. In addition, our future debt agreements may contain financial covenants and ratios.

The breach of any of these covenants by us or the failure by us to meet any of the financial ratios or conditions could result in a default under any or all of such indebtedness. If a default occurs under any such indebtedness, all of the outstanding obligations thereunder could become immediately due and payable, which could result in a default under our other outstanding debt and could lead to an acceleration of obligations related to other outstanding debt. The existence of such a default or event of default could also preclude us from borrowing funds under our revolving credit facilities. Our ability to comply with the provisions of the indentures, credit facilities and other agreements governing our outstanding debt and indebtedness we may incur in the future can be affected by events beyond our control and a default under any debt instrument, if not cured or waived, could have a material adverse effect on us.

Our subsidiary in Korea maintains an unfunded severance plan under which we have an accrued liability of ~~$143.0~~$153.7 million as of December 31, ~~2015.~~2017. The plan covers certain employees that were employed prior to August 1, 2015. In the event of a significant layoff or other reduction in our labor force in Korea, our subsidiary in Korea would be required to make ~~lump sum~~lump-sum severance payments under the plan, which could have a material adverse effect on our liquidity, financial condition and cash flows. See Note 14 to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

Effective internal controls are necessary to provide reliable financial reports and to assist in the effective prevention of fraud. We must annually evaluate our internal procedures to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires management and our independent registered public accounting firm to assess the effectiveness of internal control over financial reporting.

Internal controls may not prevent or detect misstatements because of their inherent limitations, including the possibility of human error, the circumvention or overriding of controls, fraud or corruption. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. In addition, projections of any evaluation of effectiveness of internal controls to future periods are subject to the risk that the internal controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We assess our internal controls and systems on an ongoing basis, and from time-to-time, we ~~are implementing a new~~update and make modifications to our global enterprise resource planning ~~system on a world-wide basis.~~system. We have implemented several significant enterprise resource planning modules and expect to implement additional enterprise resource planning modules in the future. In addition, we have implemented new shop floor management systems in certain of our factories and integrated the acquired operations of Amkor Technology Malaysia Sdn. Bhd. into our overall internal control over financial reporting. In December 2015, we acquired the operations of J-Devices, and we ~~are integrating~~integrated those operations into our overall internal control over financial reporting. In addition, we are implementing an enterprise resource planning system at J-Devices. The implementation of these systems, as well as the integration of the acquired operations represents changes in our internal control over financial reporting. Although we continue to monitor and assess our internal controls for these systems and operations, there is a risk that deficiencies may occur that could constitute significant deficiencies or, in the aggregate, a material weakness.

The following selected ~~consolidated~~ financial data ~~as of~~ ~~December 31, 2015~~ ~~and~~ ~~2014, and for the years ended~~ ~~December 31, 2015~~, ~~2014~~ ~~and~~ ~~2013, have been derived from our audited Consolidated Financial Statements included in this Annual Report on Form 10-K. The following selected consolidated financial data as of~~ ~~December 31, 2013~~, ~~2012~~ ~~and~~ ~~2011, and for the years ended~~ ~~December 31, 2012~~ ~~and~~ ~~2011, have been derived from audited financial statements not included herein. You~~ should be read ~~the selected consolidated financial data~~ in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements in Part II, Item 7 and Item 8, respectively, of this Annual Report on Form 10-K.

Amkor is one of the world’s leading providers of outsourced semiconductor packaging and test services. Our financial goals are sales growth and improved ~~profitability, and~~profitability. To achieve these goals, we are ~~focusing~~focused on ~~the following strategies to achieve these goals: capitalizing on~~generating increased value from our investments in ~~services for~~ advanced technologies, improving utilization of existing assets and selectively growing our scale and scope through strategic investments.

We are an industry leader in developing and commercializing cost-effective advanced packaging and test technologies. These advanced technology solutions provide increased value to our ~~customers while typically generating gross margins above our corporate average.~~customers. This is particularly true in the mobile ~~device~~communications market, where growth has outpaced the semiconductor industry rate. Advanced packages are now the preferred choice in both the high-end and the mid-range segments of the smartphone market, which together account for a high portion of mobile phone semiconductor value. The demand for advanced packages is also being driven by second-wave mobile device customers, who are transitioning out of wirebond into wafer-level and flip-chip packages. ~~Our~~We believe that our technology leadership and this technology transition create significant growth opportunities for us.

We typically look for opportunities in the advanced packaging and test area where we can generate reasonably quick returns on investments made for customers seeking leading edge technologies. We also focus on developing a second wave of customers to fill the capacity that becomes available when leading edge customers transition to newer packaging and test equipment and platforms. For example, we are currently working to expand our sales to Chinese and Taiwanese fabless chip companies that make up a significant portion of the mid-tier and entry-level segments of the mobile device market where much of the growth is occurring. In addition, we are seeking ~~out~~ new customers and deepening our engagement with existing customers. This includes an expanded emphasis on the automotive market where semiconductor content continues to grow and in the analog area for our mainstream wirebond technologies.

From time to time, we identify attractive opportunities to grow our customer base and expand the markets we serve. For example, in May 2017, we acquired Nanium, which we expect will strengthen our position in the market for wafer-level fan-out packaging. In 2009, we invested in J-Devices, a joint venture to provide semiconductor packaging and test services in Japan. We increased our investment in J-Devices to 60% in 2013 and to 100% in 2015 through the exercise of additional options. ~~As a result, our accounting for~~ J-Devices ~~changed from~~is the ~~equity method to the consolidation method effective at the time~~largest provider of acquisition, December 30, 2015. Our balance sheet data as of December 31, 2015 reflects the consolidation of J-Devices. The operating results of J-Devices will be consolidated beginning in 2016. Also, in 2013, we acquired Toshiba’s power discreteoutsourced semiconductor ~~packaging~~assembly and test ~~factory~~services in ~~Malaysia.~~Japan and is primarily focused in the automotive, industrial and consumer end markets. We believe that selective growth through joint ventures, acquisitions and other strategic investments can help diversify our revenue streams, improve our profits, broaden our portfolio of services and continue our technological leadership.

Our IDM customers include: ~~Infineon Technologies AG;~~ Intel Corporation; ~~Micron Technology, Inc.;~~ Renesas Electronics Corporation; STMicroelectronics N.V.; Texas Instruments Incorporated and Toshiba Corporation. Our fabless customers include: ~~Avago Technologies;~~ Broadcom ~~Corporation~~Limited, Qualcomm

Incorporated and ~~Qualcomm Incorporated.~~Socionext Inc. Our contract foundry customers include: GlobalFoundries Inc. and Taiwan Semiconductor Manufacturing Company Limited.

37

Our net sales, gross profit, operating income, cash flows, liquidity and capital resources have historically fluctuated significantly from quarter to quarter as a result of many factors, including the seasonality of our business, the cyclical nature of the semiconductor industry and other factors discussed in Part 1, Item 1A of this Annual Report on Form 10-K.

We operate in a capital intensive industry and have a significant level of debt. Servicing our current and future customers requires that we incur significant operating expenses and continue to make significant capital expenditures, which are generally made in advance of the related revenues and without firm customer commitments. We fund our operations, including capital expenditures and debt service requirements, with cash flows from operations, existing cash and cash equivalents, borrowings under available credit facilities and proceeds from any additional financing. Maintaining an appropriate level of liquidity is important to our business and depends on, among other things, the performance of our business, our capital expenditure levels and our ability to repay debt out of our operating cash flows or proceeds from debt or equity financings.

Our net sales ~~decreased $244.8~~increased $292.9 million or ~~7.8%~~7.5% to ~~$2,884.6~~$4,186.5 million in ~~2015~~2017 from ~~$3,129.4~~$3,893.6 million in ~~2014.~~2016. The ~~decrease~~increase was attributable to strong demand in all of our end markets, particularly mobile communications.

Gross profit increased $61.8 million in 2017 compared to 2016, attributable to the increase in net ~~sales~~sales.

In May 2017, we sold the land and ~~general weakness~~buildings comprising our K1 factory for $142.4 million which resulted in ~~the semiconductor industry as well as lower revenue~~a pre-tax gain of $108.1 million.

In December 2017, we recognized an estimated one-time net tax benefit of $41.6 million, due to the ~~sale~~enactment of ~~our Japanese subsidiary to J-Devices in June 2014. In 2015, we benefitted from growth in our advanced System-in-Package ("SiP") business as well as higher sales to customers in Greater China.~~the Tax Act. The tax benefit is driven by the reversal of a valuation allowance against certain deferred tax assets.

Gross margin in 2015 decreased to 16.6%, compared to 17.7% in 2014, primarily due to lower net sales, higher employee compensation costs at our factories and increased depreciation expense, partially offset by favorable foreign currency exchange rate movements and lower costs for gold.

Net cash provided by operating activities was ~~$577.9~~$618.3 million for the year ended December 31, ~~2015~~,2017, compared to ~~$613.9~~$729.4 million for the year ended December 31, ~~2014. The~~2016. This decrease ~~is mainly attributable~~was primarily due to ~~settlement payments for patent license litigation.~~changes in working capital.

The following table sets forth certain operating data as a percentage of net sales for the periods indicated:

Change
2015 2014 2013 2015 over 2014 2014 over 2013
(In thousands, except percentages)
Net sales $ 2,884,603
$ 3,129,440
$ 2,956,450
$ (244,837 ) (7.8 )% $ 172,990
5.9 %

The increase in net sales in ~~2014~~2017 compared to ~~2013~~2016 was due to strong demand across all end markets. The mobile communications market was particularly strong due to an increase in our content in flagship smartphones and improved sales with Greater China fabless customers. We also experienced growth in the automotive and computing end markets.

The increase in net sales in 2016 compared to 2015 was primarily attributable to the consolidation of J-Devices. J-Devices contributed $913.7 million of net sales for the year ended December 31, 2016. Excluding J-Devices, net sales increased by $95.3 million primarily due to higher sales in the automotive and mobile communications markets. The increase in the automotive market was driven by ~~strong demand for wafer services supporting~~increased market share with existing customers and increasing semiconductor content in vehicles. The increase in the mobile communications ~~a full year of results from our power discrete business~~market was attributable to strength in ~~Malaysia acquired in mid-2013, strong demand for NAND memory and growth in our automotive business.~~smartphones across multiple tiers.

Our cost of sales consists principally of materials, labor, depreciation and manufacturing overhead. Since a substantial portion of the costs at our factories is fixed, there tends to be a strong relationship between our revenue levels and gross margin where relatively modest increases or decreases ~~in capacity utilization rates~~ can have a significant ~~effect on our gross margin.~~effect.

Gross profit and gross margin ~~in 2015 decreased~~for 2017 increased compared to 2016, primarily due to ~~lower~~the increase in net ~~sales,~~sales. Manufacturing costs increased due to higher unit volumes, increased employee compensation costs, atand our ~~factories,~~factory consolidation efforts in Japan.

Gross profit for 2016 increased compared to 2015, primarily due to the increase in net sales and ~~increased depreciation expense from our continued investments in property, plant and equipment. The decrease is partially offset by~~ favorable foreign currency ~~exchange rate movements and lower costs~~movements. J-Devices contributed $137.9 million in gross profit for ~~gold, which is used in many of our wirebond products.~~

~~Gross~~increase was partially offset by higher net sales generated from mainstream packages, which have lower gross margin, ~~was negatively impacted by 2.4 and 0.4 percentage points in 2014 and 2013, respectively, for charges related to~~as a result of the ~~settlement~~consolidation of ~~patent license litigation in January 2015.~~J-Devices.

Change
2015 2014 2013 2015 over 2014 2014 over 2013
(In thousands, except percentages)
Selling, general and administrative $ 232,409
$ 254,498
$ 247,779
$ (22,089 ) (8.7 )% $ 6,719
2.7 %



							Change
	2017		2016		2015		2017 over 2016				2016 over 2015
	(In thousands, except percentages)
Selling, general and administrative	$	297,455	$	284,331	$	232,409	$	13,124	4.6	%	$	51,922	22.3	%

Selling, general and administrative expenses ~~decreased~~increased in ~~2015~~2017 compared to ~~2014. The decrease was attributable~~2016 primarily due to ~~lower~~higher employee ~~incentive~~ compensation costs, ~~and professional fees, as well as favorable foreign currency exchange rate movements.~~ partially offset by net proceeds received from a one-time legal settlement in April 2017.

Selling, general and administrative expenses increased in ~~2014~~2016 compared to ~~2013. The increase was primarily~~2015 as a result of the ~~inclusion~~consolidation of ~~a full year of costs from our power discrete business~~J-Devices, which accounted for $56.3 million in ~~Malaysia acquired in mid-2013,~~selling, general and administrative expenses. Excluding J-Devices, selling, general and administrative expenses for 2016 decreased primarily due to general cost savings and lower depreciation expense. These decreases were partially offset by ~~lower professional fees associated with acquisitions and investments.~~higher employee incentive compensation costs.

Change
2015 2014 2013 2015 over 2014 2014 over 2013
(In thousands, except percentages)
Research and development $ 82,017
$ 76,864
$ 64,625
$ 5,153
6.7 % $ 12,239
18.9 %



							Change
	2017		2016		2015		2017 over 2016				2016 over 2015
	(In thousands, except percentages)
Research and development	$	166,614	$	117,206	$	82,017	$	49,408	42.2	%	$	35,189	42.9	%

Research and development activities are focused on developing new packaging solutions and test services and improving the efficiency and capabilities of our existing production processes. The costs related to our technology and product development projects are included in research and development expense until the project moves into production. Once production begins, the costs related to production become part of the cost of goods sold, including ongoing depreciation for the equipment previously held for research and development activities. Research and development expenses ~~were up~~increased in 2017 over 2016, and 2016 over 2015, ~~over 2014, and 2014 over 2013,~~primarily due ~~primarily~~ to ~~increased~~increases in development activities and the related employee compensation costs and ~~investment~~depreciation resulting from continued investments in equipment, in each of those ~~periods, which~~periods. The increase in 2017 over 2016 was ~~only~~primarily due to development and other costs associated with our new K5 factory and research and development facility in Korea. The increase in each period was partially offset by the reduction in costs for projects that moved into production. In addition, the consolidation of J-Devices added $18.3 million in research and development expenses for the year ended December 31, 2016.

We recorded a foreign currency loss, net in ~~2014~~2017, primarily due to the ~~settlement~~unfavorable exchange rate movements, mainly the Korean Won, and the associated impact on our net monetary exposure at our foreign subsidiaries. In 2016 and 2015, we recognized net foreign currency gains as a result of ~~patent license litigation. In addition, interest~~favorable exchange rate movements and the associated impact on our net monetary exposure at our foreign subsidiaries.

The early repayment of our 6.625% Senior Notes due 2021 in July 2017 resulted in a loss on debt retirement of $4.4 million, which was included in other (income) expense, ~~increased due to~~net, offset by an increase in ~~our senior notes which occurred~~interest income in 2013, which is offset by a decrease due to the April 2014 conversion of $56.3 million and the June 2013 exchange of $193.7 million of our 6.0% Convertible senior subordinated notes for shares of our common stock. In 2015, 2014 and 2013, we capitalized a portion of the interest on our outstanding debt in the amount of $10.1 million, $6.9 million and $1.7 million, respectively, in connection with the construction of our new K5 facility in Korea.

Generally, our effective tax rate is below the U.S. federal tax rate of 35% because the majority of our income is taxed in foreign jurisdictions ~~primarily throughout~~in the Asia Pacific region where we benefit from tax holidays or tax rates lower than the U.S. statutory rate. ~~Foreign~~Our income tax expense includes foreign withholding taxes and minimum ~~taxes cause our effective tax rate to increase. The increase in our effective income tax rate in 2015 is primarily attributable to losses in jurisdictions with no associated tax benefit.~~taxes. The effective income tax rate ~~in 2014~~for 2015 was higher than ~~2013~~2017 and 2016 due primarily ~~as a result~~to losses in jurisdictions where there was no associated tax benefit.

The effective tax rate in 2017 includes an estimated one-time net tax benefit of $41.6 million based on our analysis of the impact of the Tax Act. The components of the one-time benefit include the release of a valuation allowance against U.S. deferred tax assets that we now expect to realize as a result of the change to the U.S. tax law limiting the deductibility of interest expense. We also incurred charges for the one-time transition tax on our unremitted foreign earnings and profits offset by the anticipated utilization of foreign tax credits. We were also required to remeasure our deferred tax assets ~~in a foreign jurisdiction in 2013.~~based on the new U.S. federal tax rate of 21%.

Our income tax expense reflects the applicable tax rates in effect in the various countries in which our income is earned and is subject to volatility depending on the relative ~~jurisdictional~~ mix of ~~earnings.~~earnings in each location. During ~~2015, 2014~~2017, 2016 and ~~2013,~~2015, our subsidiaries in Korea, Malaysia, the Philippines, Singapore and Taiwan operated under various tax holidays. The tax holiday granted to certain operations in Taiwan expired as of December 31, 2017. The tax holidays ~~which will~~granted to our Malaysia operations and certain operations in the Philippines expire ~~in whole or in part at various dates through 2024. We expect our effective tax rate to increase as the~~during 2018. As these tax holidays expire, ~~because~~ income earned in ~~these~~those jurisdictions will be subject to higher statutory income tax ~~rates. In connection with~~rates, which may cause our ~~investment in Korea, we increased our capital investment by $100 million pursuant~~effective tax rate to ~~the Foreign Investment Promotion Act, thereby, availing ourselves of certain additional tax incentives we expect to benefit from in the future.~~increase.

See Note 6 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information about our income tax expense.

~~In January 2015, we increased our ownership interest in J-Devices from 60% to 65.7%.~~ On December 30, 2015, we increased our ownership in J-Devices from 65.7% to 100% through the exercise of existing options. As a result, our accounting for J-Devices changed from the equity method to the consolidation method effective at the time of acquisition on December 31, 2015. ~~In June 2014, J-Devices acquired our Japanese subsidiary, which resulted in $8.8 million of additional equity in earnings due to the gain on J-Devices' purchase. The decrease from 2014~~There is ~~also due to a lower settlement of a take-or-pay arrangement under a manufacturing services agreement.~~

Liquidity and Capital Resources

We assess our liquidity based on our current expectations regarding sales, operating expenses, capital spending, debt service requirements and other funding needs. Based on this assessment, we believe that our cash flow from operating activities, together with existing cash and cash equivalents and availability under our credit facilities, will be sufficient to fund our

working capital, capital expenditure, debt service and other financial requirements for at least the next twelve months. Our liquidity is affected by, among other things, volatility in the global economy and credit markets, the performance of our business, our capital expenditure levels, other uses of our cash including any purchases of stock under our stock repurchase program, any acquisitions or investments in joint ventures and our ability to either repay debt out of operating cash flow or refinance it at or prior to maturity with the proceeds of debt or equity offerings. There can be no assurance that we will generate the necessary net income or operating cash flows, or be able to borrow sufficient funds, to meet the funding needs of our business beyond the next twelve months due to a variety of factors, including the cyclical nature of the semiconductor industry and other factors discussed in Part I, Item 1A of this Annual Report on Form 10-K.

Our primary source of cash and the source of funds for our operations are cash flows from operations, current cash and cash equivalents, borrowings under available credit facilities and proceeds from any additional debt or equity financings. As of December 31, ~~2015~~2017, we had cash and cash equivalents of ~~$523.2~~$596.4 million. Included in our cash balance as of December 31, ~~2015~~2017, is ~~$435.5~~$444.6 million held offshore by our foreign subsidiaries. We have the ability to access cash held offshore by our foreign subsidiaries through the repayment of intercompany debt obligations. Due to the changes in U.S. tax law, distributions of cash to the U.S. as dividends in the future will not be subject to U.S. income tax. If we were to distribute this offshore cash to the U.S. as dividends from our foreign subsidiaries, we ~~would incur up~~may be subject to ~~$21.6 million of~~ foreign withholding ~~taxes; however, we would not incur a significant amount of U.S. federal~~and state income taxes ~~due to the availability~~ of ~~tax loss carryovers and foreign tax credits.~~approximately $18.9 million.

~~As of~~ ~~December 31, 2015, we had availability of $64.3 million~~The borrowing base under our $200.0 million first lien senior secured revolving credit ~~facility.~~facility is limited to the amount of our eligible accounts receivable. As of December 31, 2017, we had availability of $199.4 million under this facility, after reduction of $0.6 million of outstanding standby letters of credit. Our foreign subsidiaries had ~~$30.0~~$19.0 million available to be drawn under secured revolving credit facilities and ~~$110.0~~$70.2 million available to be borrowed under secured term loan credit facilities for working capital purposes and capital expenditures. In April 2017, we borrowed $75.0 million on our revolving credit facility in Korea and repaid the outstanding balance of $80.0 million on our term loan due May 2020.

As of December 31, ~~2015~~2017, we had ~~$1,595.9~~$1,364.4 million of debt. Our scheduled principal repayments on debt include ~~$76.8 million due in 2016, $12.6 million due in 2017, $126.3~~$123.8 million due in 2018, ~~$250.0~~$173.6 million due in 2019, ~~$200.0~~$326.6 million due in 2020, ~~and $925.0~~$210.6 million due ~~thereafter.~~in 2021 and $530.7 million due in 2022. We were in compliance with all ~~of our~~ debt covenants at December 31, ~~2015~~2017, and we expect to remain in compliance with these covenants for at least the next twelve months.

In July 2017, we redeemed $200.0 million of the outstanding $400.0 million of our 6.625% Senior Notes due 2021. The note redemption was funded with cash on hand. We refer you to Note 13 to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

In certain foreign locations, we use non-recourse factoring arrangements with third party financial institutions to manage our working capital and cash flows. Under this program, we sell receivables to a financial institution for cash at a discount to the face amount. Available capacity under these programs is dependent on the level of our trade accounts receivable eligible to be sold, the financial institutions' willingness to purchase such receivables and the limits provided by the financial institutions. As such, these factoring arrangements can be reduced or eliminated at any time due to market conditions and changes in the credit worthiness of customers. For the year ended December 31, ~~2015~~2017 and ~~2014,~~2016, we sold accounts receivable totaling ~~$323.5~~$611.2 million and ~~$340.0~~$574.1 million, ~~respectively, for a discount, plus~~net of discounts and fees of ~~$1.5 million in 2015 and 2014. At~~ ~~December 31, 2015~~ ~~and 2014, there were outstanding receivables of $141.9~~$4.6 million and ~~$102.7~~$2.5 million, ~~respectively, which had been sold to financial institutions under these arrangements.~~respectively.

In order to reduce our debt and future cash interest payments, we may from time to time repurchase our outstanding notes for cash or exchange shares of our common stock for our outstanding notes. Any such transaction may be made in the open market, through privately negotiated transactions or otherwise and is subject to the terms of our indentures and other debt agreements, market conditions and other factors.

Certain debt agreements have restrictions on dividend payments and the repurchase of stock and subordinated securities. These restrictions are determined in part by calculations based upon cumulative net income. We have never paid a dividend to our stockholders and we do not have any present plans for doing so. From time to time, Amkor Technology, Inc. also guarantees certain debt of our subsidiaries.

Our subsidiary in Korea maintains an unfunded severance plan that covers certain employees that were employed prior to August 1, 2015. As of December 31, ~~2015,~~2017, the severance liability was ~~$143.0~~$153.7 million. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date. For service periods

subsequent to August 1, 2015, employees participate in either a defined benefit pension plan or a defined contribution pension plan.

~~In January 2015, we settled our patent license litigation with Tessera.~~ Under the terms of ~~the~~a January 2015 patent license litigation settlement, Amkor agreed to pay ~~Tessera~~ a total of $155.0 million in 16 equal quarterly recurring payments commencing in the first quarter of 2015 and continuing through the fourth quarter of 2018. As of December 31, ~~2015,~~2017, we owe ~~$116.3~~$38.8 million ~~to Tessera.~~under the settlement agreement.

We operate in a ~~capital intensive~~capital-intensive industry. Servicing our current and future customers may require that we incur significant operating expenses and make significant investments in equipment and facilities, which are generally made in advance of the related revenues and without firm customer commitments.

Our Board of Directors previously authorized the repurchase of up to $300.0 million of our common stock, exclusive of any fees, commissions or other expenses. At December 31, ~~2015~~2017, approximately $91.6 million was available to repurchase common stock pursuant to the stock repurchase program. The purchase of stock may be made in the open market or through privately negotiated transactions. The timing, manner, price and amount of any repurchases will be determined by us at our discretion and will depend upon a variety of factors including economic and market conditions, the cash needs and

We make significant capital expenditures in order to service the demand of our customers, which is primarily focused on investments in advanced packaging and test equipment. In ~~2015,~~2017, our capital expenditures totaled ~~$538.0~~$550.9 million or approximately ~~18.6%~~13.2% of net ~~sales, including $154.3 million for our new K5 facility in Korea.~~sales.

We expect that our ~~2016~~2018 capital expenditures will be approximately ~~$650 million, approximately $170 million of which will be spent on the construction of our new K5 facility.~~$600 million. Ultimately, the amount of our ~~2016~~2018 capital expenditures will depend on several factors including, among others, the timing and implementation of any capital projects under review, the performance of our business, economic and market conditions, the cash needs and investment opportunities for the business, the need for ~~replacement or~~ additional capacity to service anticipated customer demand and the availability of cash flows from operations or financing.

In addition, we are subject to risks associated with our capital expenditures, including those discussed in Part I, Item 1A of this Annual Report on Form 10-K under the caption "Capital Expenditures - We Make Substantial Investments in Equipment and Facilities To Support the Demand Of Our Customers, Which May Adversely Affect Our Business If the Demand Of Our Customers Does Not Develop As We Expect or Is Adversely Affected."

Net cash provided by (used in) operating, investing and financing activities for each of the three years ended December 31, ~~2015~~2017 was as follows:

Operating activities: Our cash ~~flows~~flow provided by operating activities for the year ended December 31, ~~2015,~~2017, decreased by ~~$36.0~~$111.1 million compared to the year ended December 31, ~~2014. The decrease is~~2016, primarily due to ~~lower net~~changes in working capital, partially offset by higher sales and ~~settlement payments for patent license litigation.~~gross profit. Our cash flow provided by operating activities for the year ended December 31, ~~2014,~~2016, increased by ~~$56.4~~$144.4 million compared to the year ended December 31, ~~2013. The increase is~~2015. J-Devices contributed $120.0 million of operating cash flow for the year ended December 31, 2016. Excluding J-Devices, our operating cash flow increased in 2016 primarily ~~attributable~~due to ~~net~~higher sales ~~growth~~ and ~~improved profitability, partially offset by an increase in working capital.~~gross profit.

Investing activities: Our cash ~~flows~~flow used in investing activities are principally for payments for property, plant and ~~equipment. In addition,~~equipment, which decreased compared to the ~~net cash used in investing activities for~~prior year primarily due to the ~~year ended~~ ~~December 31, 2015, included payment for our incremental investment in J-Devices in January 2015, partially offset by net cash received on acquisition~~completion of ~~J-Devices~~the initial phase of K5 construction in December ~~2015 and the receipt of the final payment for the sale of our subsidiary to J-Devices.~~2016. The net cash used in investing activities for the year ended December 31, ~~2014,~~2017, also included ~~cash transferred on~~a payment for the acquisition of Nanium and receipt of the remaining proceeds for the sale of ~~our subsidiary to J-Devices, net of proceeds.~~the K1 factory in Korea.

Financing activities: The net cash ~~provided by~~used in financing activities for the year ended December 31, ~~2015~~2017 was primarily driven by ~~new borrowings,~~the partial redemption of our Senior Notes due 2021, partially offset by the ~~repayment of our 7.375% Senior Notes due 2018~~net borrowings in China and ~~other debt.~~Japan. The net cash used in financing activities during ~~2014~~2016 primarily resulted from repayments of our ~~repayment of~~debt and revolving credit facility, offset by borrowings ~~at our subsidiary~~ in ~~Korea~~Japan and ~~the final payment for the acquisition of the power discrete business in Malaysia.~~Korea.

We provide the following supplemental data to assist our investors and analysts in understanding our liquidity and capital resources. We define free cash flow as net cash provided by operating activities less payments for property, plant and ~~equipment.~~equipment, plus proceeds from the sale of and insurance recovery for property, plant and equipment, if applicable. Free cash flow is not defined by U.S. GAAP. We believe free cash flow to be relevant and useful information to our investors because it provides them with additional information in assessing our liquidity, capital resources and financial operating results. Our management uses free cash flow in evaluating our liquidity, our ability to service debt and our ability to fund capital expenditures. However, free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other, non-discretionary expenditures, such as mandatory debt service, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. This measure should be considered in addition to, and not as a substitute for, or superior to, other measures of liquidity or financial performance prepared in accordance with U.S. GAAP, such as net cash provided by operating activities. Furthermore, our definition of free cash flow may not be comparable to similarly titled measures reported by other companies.

The following table summarizes our contractual obligations at December 31, ~~2015~~2017, and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

As of December 31, ~~2015~~2017, we had no off-balance sheet guarantees or other off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

We refer you to Note 17 to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of our contingencies related to litigation and other legal matters. If an unfavorable ruling were to occur in these matters, there exists the possibility of a material adverse impact on our business, liquidity, results of operations, financial position and cash flows in the period in which the ruling occurs. The potential impact from legal proceedings on our business, liquidity, results of operations, financial position and cash flows could change in the future.

We have identified the policies below as critical to our business operations and the understanding of our results of operations. A summary of our significant accounting policies used in the preparation of our Consolidated Financial Statements appears in Note 1 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. Our preparation of this Annual Report on Form 10-K requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.

We believe the following critical accounting estimates and policies, which have been reviewed with the Audit Committee of our ~~board~~Board of ~~directors,~~Directors, affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements.

Acquisitions. We account for businesses we acquire using the acquisition method of accounting and record the underlying net assets at their respective acquisition-date fair values. The accounting for acquisitions requires us to make significant estimates and assumptions, including those with respect to future cash flows, discount rates and asset lives, and therefore requires considerable judgment. These determinations affect the amount of depreciation and amortization expense recognized in future periods. Our estimates of fair value are based upon assumptions believed to be reasonable; however, they are inherently uncertain and unpredictable.

Revenue Recognition. We recognize revenue from our packaging and test services, net of value-added or other similar taxes, when there is evidence of an arrangement, delivery has occurred or services have been rendered, fees are fixed or determinable and collectibility is reasonably assured. Generally, these criteria are met and revenue is recognized upon shipment or, in some cases, customer acceptance. If the revenue recognition criteria are not met, we defer the revenue. Deferred revenue generally results from two types of transactions: contractual invoicing at interim points in the packaging and test process prior to shipment of the finished product and customer advances for supply agreements with customers where we commit capacity in exchange for customer prepayment of services. These prepayments are deferred and recorded as customer advances within accrued expenses and other non-current liabilities.

We generally do not take ownership of customer-supplied semiconductor wafers. Title and risk of loss remains with the customer for these materials at all times. Accordingly, the cost of the customer-supplied materials is not included in our Consolidated Financial Statements.

An allowance for sales credits is recorded as a reduction to sales and accounts receivable during the period of sale such that accounts receivable is reported at its estimated net realizable value. The allowance for sales credits is an estimate of the future credits we will issue for billing adjustments primarily for invoicing corrections and miscellaneous customer claims and is estimated based upon recent credit issuance, historical experience and specific identification of known or expected sales credits at the end of the reporting period. Additionally, provisions are made for doubtful accounts when there is doubt as to the collectibility of accounts receivable. The allowance for doubtful accounts is recorded as bad debt expense and is classified as selling, general and administrative expense. The allowance for doubtful accounts is based upon specific identification of doubtful accounts considering the age of the receivable balance, the customer’s historical payment history

Income Taxes. We operate in and file income tax returns in various U.S. and non-U.S. jurisdictions which are subject to examination by tax authorities. The tax returns for years where the statute of limitations remains open in all jurisdictions in which we do business are subject to change upon examination. We believe that we have estimated and provided adequate accruals for potential additional taxes and related interest expense that may ultimately result from such examinations. We believe that any additional taxes or related interest over the amounts accrued will not have a material effect on our financial condition, results of operations or cash flows. However, resolution of these matters involves uncertainties and there can be no assurance that the outcomes will be favorable. In addition, changes in the mix of income from our foreign subsidiaries, expiration of tax holidays or changes in tax laws or regulations could result in increased effective tax rates in the future.

Additionally, we monitor on an ongoing basis our ability to utilize our deferred tax assets and whether there is a need for a related valuation allowance. In evaluating our ability to recover our deferred tax assets in the jurisdictions from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and results of recent operations. For most of our foreign deferred tax assets, we consider it more likely than not that we will have sufficient taxable income to allow us to realize these deferred tax assets. However, in the event taxable income falls short of current expectations, we may need to establish a valuation allowance against such deferred tax assets. We have valuation allowances on select deferred tax assets in certain foreign ~~jurisdictions. We also maintain~~jurisdictions, including Portugal. In prior years, we maintained a valuation allowance on all of our U.S. net deferred tax assets, including our U.S. net operating loss carryforwards. ~~Such valuation allowances are released as~~During the ~~related tax benefits are realized or when sufficient evidence exists to conclude that~~fourth quarter of 2017, we determined it iswas more likely than not that we will have sufficient taxable income to allow us to realize a substantial portion of our U.S. deferred tax assets. Our evaluation considered, among other factors, limitations on the deductibility of interest expense in connection with the Tax Act.

ASC 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions is for tax years beginning after December 31, 2017. Given the significance of the Tax Act, the SEC staff issued Staff Accounting Bulletin No. 118, which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed.

We have reported provisional amounts for the income tax effects of the Tax Act for which the accounting is incomplete but a reasonable estimate could be determined. There were no specific impacts of the Tax Act that could not be reasonably estimated. Our estimate of the impact of the Tax Act may be adjusted throughout the allowable measurement period as we collect additional information, prepare and analyze the information and evaluate any regulatory guidance or clarifications. Our review is expected to include:

Valuation of Inventory. We order raw materials based on customers’ forecasted demand. If our customers change their forecasted requirements and we are unable to cancel our raw materials order or if our vendors require that we order a minimum quantity that exceeds the current forecasted demand, we will experience a build-up in raw material inventory. We will either seek to recover the cost of the materials from our customers or utilize the inventory in production. However, we may not be successful in recovering the cost from our customers or be able to use the inventory in production and, accordingly, if we believe that it is probable that we will not be able to recover such costs, we reduce the carrying value of our inventory. Additionally, we reduce the carrying value of our inventories for the cost of inventory we estimate is excess and obsolete based on the age of our inventories. When a determination is made that the inventory will not be utilized in production or is not saleable, it is written-off.

Inventories are stated at the lower of cost ~~or market (net~~and net realizable ~~value).~~value. Cost is principally determined by standard cost or the weighted moving average method, ~~(on a first-in, first-out basis, with the exception of work-in-process which is determined on an average cost basis), all~~both of which approximate actual cost. For inventory valued using the standard cost method, we review and set our standard costs as needed, but at a minimum on an annual basis.

Valuation of Long-lived Assets. We review long-lived assets, which include property, plant and equipment and goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Factors we consider important which could trigger an impairment review include the following:

Recoverability of a long-lived asset group to be held and used in operations is measured by a comparison of the carrying amount to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If such asset group is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of the asset group exceeds its fair value. Long-lived assets to be disposed of are carried at the lower of cost or fair value less the costs of disposal.

We ~~test~~review goodwill for impairment inannually during the fourth quarter of each ~~year. We review our defined reporting unit, calculate the fair value of the unit using a discounted cash flow model~~year and ~~compare the fair value to~~whenever events or changes in circumstances indicate that an impairment may exist. Impairment losses are recorded when the carrying ~~value of the reporting unit.~~

For information regarding recently adopted and recently issued accounting standards, see Note 2 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

We are exposed to market risks, primarily related to foreign currency and interest rate fluctuations. In the normal course of business, we employ established policies and procedures to manage the exposure to fluctuations in foreign currency

values and changes in interest rates. Our use of derivative instruments, including forward exchange contracts, has been historically insignificant; however, we continue to evaluate the use of hedging instruments to manage currency and other risks.

In order to reduce our exposure to foreign currency gains and losses, we generally use natural hedging techniques to reduce foreign currency rate risk. The U.S. dollar is our reporting and functional currency and the functional currency for our subsidiaries, ~~excluding~~except for J-Devices, where the ~~local currency~~Japanese Yen is the functional currency.

We have foreign currency exchange rate risk associated with the remeasurement of monetary assets and liabilities on our Consolidated Balance Sheets that are denominated in currencies other than the functional currency. We performed a sensitivity analysis of our foreign currency exposure as of December 31, ~~2015~~2017, to assess the potential impact of fluctuations in exchange rates for all foreign denominated assets and liabilities. Assuming athat all foreign currencies appreciated 10% ~~adverse movement for all currencies~~ against the U.S. dollar as of December 31, ~~2015~~2017, our income before taxes ~~and equity in earnings of unconsolidated affiliate~~ would have been approximately ~~$36~~$17 million lower, due to the remeasurement of monetary assets and liabilities. We have a significant net monetary liability at our subsidiary in Korea, principally driven by our Korean severance ~~plan and construction costs for K5.~~plan.

In addition, we have foreign currency exchange rate exposure on our results of operations. For the year ended December 31, ~~2015~~2017, approximately ~~96%~~74% of our net sales were denominated in U.S. dollars. Our remaining net sales were principally denominated in ~~Korean won~~Japanese Yen for local country sales. For the year ended December 31, ~~2015~~2017, approximately ~~64%~~51% of our cost of sales and operating expenses were denominated in U.S. dollars and were largely for raw materials and depreciation. The remaining portion of our cost of sales and operating expenses was principally denominated in the Asian currencies where our production facilities are located and largely consisted of ~~labor and utilities.~~labor. To the extent that the U.S. dollar weakens against these ~~Asian based~~Asian-based currencies, similar foreign currency denominated ~~transactions~~income and expenses in the future will result in higher sales, higher cost of sales and operating expenses, with cost of sales and operating expenses having the greater

There are inherent limitations in the sensitivity analysis presented, primarily the assumption that foreign exchange rate movements across multiple jurisdictions would change instantaneously in an ~~equally adverse~~equal fashion. As a result, the analysis is unable to reflect the potential effects of more complex market or other changes that could arise which may positively or negatively affect our results of operations.

Our Consolidated Financial Statements are impacted by changes in exchange rates at entities where the local currency is the functional currency. The effect of foreign exchange rate translation for these entities was a gain of $11.1 million and $5.8 million for the years ended December 31, ~~2015~~2017 and ~~2014, was a net foreign translation loss of $0.5 million and $18.0 million,~~2016, respectively, and was recognized as an adjustment to equity through other comprehensive ~~income.~~

We have interest rate risk with respect to our ~~long-term~~ debt. Our fixed ~~rate debt consists of senior notes~~ and ~~our~~ variable rate debt ~~principally relates to~~includes foreign borrowings and revolving credit facilities. Our fixed rate debt also consists of senior notes. Changes in interest rates have different impacts on the fixed and variable rate portions of our debt portfolio. A change in interest rates on the fixed portion of the debt portfolio impacts the fair value of the debt instrument but has no impact on interest expense or cash flows. A change in interest rates on the variable portion of the debt portfolio impacts the interest incurred and cash flows but does not generally impact the fair value of the instrument.

The table below presents the interest rates, maturities and fair value of our fixed and variable rate debt as of December 31, ~~2015~~2017.:

For information regarding the fair value of our long-term debt, see Note 16 to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

To the Board of Directors and Stockholders of Amkor Technology, Inc.:

In our opinion, the consolidated financial statements ~~listed in the accompanying index~~referred to above present fairly, in all material respects, the financial position of ~~Amkor Technology, Inc. and its subsidiaries at~~the Company as of December 31, ~~2015~~2017 and ~~2014~~2016, and the results of their operations and their cash flows for each of the three years in the period ended December 31, ~~2015~~2017 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2015~~2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the ~~Committee of Sponsoring Organizations of the Treadway Commission (COSO).~~ COSO.

The Company’s management is responsible for these consolidated financial statements, ~~and financial statement schedule,~~ for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on ~~these~~the Company's consolidated financial statements ~~on the financial statement schedule,~~ and on the Company’s internal control over financial reporting based on our ~~integrated~~ audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the consolidated financial ~~statements, assessing~~statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, ~~and~~as well as evaluating the overall presentation of the consolidated financial ~~statement presentation.~~statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts

and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management's Report on Internal Control over Financial Reporting appearing under Item 9A, management has excluded J-Devices from its assessment of internal control over financial reporting as of December 31, 2015 because it was acquired by the Company in a purchase business combination during 2015. We have also excluded J-Devices from our audit of internal control over financial reporting. J-Devices is a wholly owned subsidiary whose total assets and total revenues represent 14.8% and 0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2015.

Phoenix, Arizona

February ~~22, 2016~~23, 2018

Amkor is one of the world’s leading providers of outsourced semiconductor packaging and test services. Amkor pioneered the outsourcing of semiconductor packaging and test services through a predecessor corporation in 1968, and over the years we have built a leading position by:

Our Consolidated Financial Statements include the accounts of Amkor Technology, Inc. and our subsidiaries (“Amkor”). Our Consolidated Financial Statements reflect the elimination of all significant inter-company accounts and transactions. On July 31, 2013, we completed the purchase of Amkor Technology Malaysia Sdn. Bhd. The financial results of the entity have been included in our Consolidated Financial Statements from the date of acquisition (Note 3). On June 30, 2014, we completed the sale of our Japanese subsidiary to J-Devices. The financial results of the divested entity were included in our Consolidated Financial Statements up to the date of sale and have subsequently been included in the results of J-Devices. On December 30, 2015, we increased our investment in J-Devices to 100% ~~through the exercise of options.~~(Note 3). As a result, our accounting for J-Devices changed from the equity method to the consolidation method effective December 30, 2015. The operating results of J-Devices were consolidated beginning in 2016. On May 22, 2017, we completed the purchase of Nanium, S.A. ("Nanium"). Nanium's financial results have been included in our Consolidated Financial Statements from the date of acquisition (Note 3). Our investments in variable interest entities in which we are the primary beneficiary are consolidated. We reflect the remaining portion of variable interest entities and foreign subsidiaries that are not wholly owned as noncontrolling interests.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to acquisitions, revenue recognition, income taxes, inventory, long lived assets and contingencies. These estimates are based on management’s best knowledge of current events, historical experience, actions that we may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results could differ materially from these estimates and assumptions. Certain prior year amounts have been reclassified to conform to current year presentation.

We have variable interests in certain Philippine realty corporations in which we have a 40% ~~ownership and from whom we~~ownership. We lease land and buildings in the Philippines ~~for which~~from these entities and we are the primary ~~beneficiary.~~beneficiary of these arrangements. As of December 31, ~~2015~~2017, the combined book value of the assets and liabilities associated with these Philippine realty corporations included in our Consolidated Balance Sheet was $16.9 million and ~~$0.2~~$0.4 million, respectively. The impact of consolidating these variable interest entities

The U.S. dollar is the functional currency of our subsidiaries ~~with the exception of~~other than J-Devices, and the foreign currency asset and liability amounts at these subsidiaries are remeasured into U.S. dollars at end-of-period exchange rates, except for nonmonetary items which are remeasured at historical rates. Foreign currency income and expenses are remeasured at daily exchange rates, except for expenses related to balance sheet amounts which are remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in other (income) expense, net in the period in which they occur.

The Japanese Yen is the functional currency of J-Devices. The asset and liability amounts of J-Devices are translated into U.S. dollars at end-of-period exchange rates. Income and expenses are translated into U.S. dollars at average exchange rates in effect during the period. The resulting translation adjustments are reported as a component of accumulated other comprehensive income in the stockholders’ equity section of the balance sheet. Assets and liabilities denominated in a currency other than the functional currency are remeasured into the functional currency prior to translation into U.S. dollars, and the resulting transaction exchange gains or losses are included in other expense (income) in the period in which they occur.

The semiconductor industry is characterized by rapid technological change, competitive pricing pressures and cyclical market patterns. Our financial results are affected by a wide variety of factors, including general economic conditions worldwide, economic conditions specific to the semiconductor industry, the timely implementation of new package and test technologies, the ability to safeguard patents and intellectual property in a rapidly evolving market and reliance on materials and equipment suppliers. In addition, the semiconductor market has historically been cyclical and subject to significant economic downturns at various times. Our profitability and ability to generate cash from operations is principally dependent upon demand for semiconductors, the utilization of our capacity, semiconductor package mix, the average selling price of our services, our ability to manage our capital expenditures and our ability to control our costs including labor, material, overhead and financing costs.

A significant portion of our revenues is concentrated with a small group of customers (Note 18). The loss of a significant customer, a business combination among customers, a reduction in orders or decrease in price from a significant customer or disruption in any of our significant strategic partnerships or other commercial arrangements could have a material adverse effect on our business, liquidity, results of operations, financial condition and cash flows.

Financial instruments, for which we are subject to credit risk, consist principally of accounts receivable and cash and cash equivalents. With respect to accounts receivable, we mitigate our credit risk by selling primarily to well-established companies, performing ongoing credit evaluations and making frequent contact with customers. In addition, we may utilize non-recourse factoring to mitigate credit risk when considered appropriate. We have historically mitigated our credit risk with respect to cash and cash equivalents through diversification of our holdings into various high quality money market funds and bank deposit accounts. At December 31, ~~2015~~2017, our cash and cash equivalents were ~~invested~~maintained in ~~U.S. money market funds and~~ various U.S. and foreign bank operating and time deposit ~~accounts.~~accounts and invested in U.S. money market funds.

We may be subject to certain legal proceedings, lawsuits and other claims, as discussed in Note 17. We accrue for a loss contingency, including legal proceedings, lawsuits, pending claims and other legal matters, when we conclude that the likelihood of a loss is probable and the amount of the loss can be reasonably estimated. When the reasonable estimate of the loss is within a range of amounts, and no amount in the range constitutes a better estimate than any other amount, we accrue for the amount at the low end of the range. We adjust our accruals from time to time as we receive additional

We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Our cash and cash equivalents ~~consist of amounts invested~~are maintained in ~~U.S. money market funds and~~ various U.S. and foreign bank operating and time deposit ~~accounts.~~accounts and invested in U.S. money market funds.

Restricted cash, current, consists of short-term cash equivalents used to collateralize our daily banking services. Restricted cash, non-current, mainly consists of collateral to fulfill foreign trade compliance requirements.

Inventories are stated at the lower of cost ~~or market (net~~and net realizable ~~value).~~value. Cost is principally determined by standard cost ~~(on a first-in, first-out basis, with~~or the ~~exception of work-in-process which is determined on an~~weighted moving average ~~cost basis), all~~method, both of which approximate actual cost. We review and set our standard costs as needed, but at a minimum on an annual basis. We reduce the carrying value of our inventories for the cost of inventory we estimate is excess and obsolete based on the age of our inventories. When a determination is made that the inventory will not be utilized in production or is not saleable, it is written-off.

Other current assets consist principally of prepaid ~~assets, deferred tax~~ assets and an investment in government securities by a foreign subsidiary to satisfy local regulatory requirements, which is recorded at amortized cost.

Property, plant and equipment are stated at cost. Depreciation is calculated by the straight-line method over the estimated useful lives of depreciable assets which are as follows:

Cost and accumulated depreciation for property retired or disposed of are removed from the accounts, and any resulting gain or loss is included in earnings. Expenditures for maintenance and repairs are charged to expense as incurred.

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of a long-lived asset group to be held and used in operations is measured by a comparison of the carrying amount to the sum of the undiscounted cash flows expected to result from the use and eventual

disposition of the asset group. If such asset group is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of the asset group exceeds its fair value. Long-lived assets to be disposed of are carried at the lower of cost or fair value less the costs of disposal.

Goodwill is recorded when the cost of an acquisition exceeds the fair value of the net tangible and identifiable intangible assets acquired. We review goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that an impairment ~~exists.~~may exist. Impairment losses are recorded when the carrying amount of ~~goodwill~~the reporting unit exceeds its ~~implied~~ fair value. ~~No goodwill impairment has been identified in any of the years presented.~~

Other assets consist principally of deferred tax assets and refundable security ~~deposits and deferred debt issuance costs.~~

We apply fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. See Note 16 for further discussion of fair value measurements.

We recognize revenue from our packaging and test services, net of value-added or other similar taxes, when there is evidence of an arrangement, delivery has occurred or services have been rendered, fees are fixed or determinable and collectibility is reasonably assured. Generally, these criteria are met and revenue is recognized upon shipment or, in some cases, customer acceptance. If the revenue recognition criteria are not met, we defer the revenue. Deferred revenue generally results from two types of transactions: contractual invoicing at interim points in the packaging and test process prior to shipment of the finished product and customer advances for supply agreements with customers where we commit capacity in exchange for customer prepayment of services. These prepayments are deferred and recorded as customer advances within accrued expenses and other non-current liabilities.

We generally do not take ownership of customer-supplied semiconductor wafers. Title and risk of loss remains with the customer for these materials at all times. Accordingly, the cost of the customer-supplied materials is not included in our Consolidated Financial Statements.

An allowance for sales credits is recorded as a reduction to sales and accounts receivable during the period of sale such that accounts receivable is reported at its estimated net realizable value. The allowance for sales credits is an estimate of the future credits we will issue for billing adjustments primarily for invoicing corrections and miscellaneous customer claims and is estimated based upon recent credit issuance, historical experience and specific identification of known or expected sales credits at the end of the reporting period. Additionally, provisions are made for doubtful accounts when there is doubt as to the collectibility of accounts receivable. The allowance for doubtful accounts is recorded as bad debt expense and is classified as selling, general and administrative expense. The allowance for doubtful accounts is based upon specific identification of doubtful accounts considering the age of the receivable balance, the customer’s historical payment history

Amounts billed to customers for shipping and handling are presented in net sales. Costs incurred for shipping and handling are included in cost of sales.

Research and development expenses include costs attributable to the conduct of research and development programs primarily related to the development of new package designs or technologies and improving the efficiency and capabilities of our existing production processes. Such costs include salaries, payroll taxes, employee benefit costs, materials, supplies, depreciation and maintenance of research equipment, services provided by outside contractors and the allocable portions of facility costs such as rent, utilities, insurance, repairs and maintenance, depreciation and general support services. All costs associated with research and development are expensed as incurred.

Income taxes are accounted for using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis as well as for net operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for those deferred tax assets for which it is more likely than not that the related tax benefits will not be realized.

We monitor on an ongoing basis our ability to utilize our deferred tax assets and whether there is a need for a related valuation allowance. In evaluating our ability to recover our deferred tax assets in the jurisdictions from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. For most of our U.S. and foreign deferred tax assets, we consider it more likely than not that we will have sufficient taxable income to allow us to realize these deferred tax assets. However, in the event taxable income falls short of current expectations, we may need to establish a valuation allowance against such deferred tax assets.

ASC 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions is for tax years beginning after December 31, 2017. Given the significance of the Tax Act, the SEC staff issued Staff Accounting Bulletin No. 118, which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed.

We have reported provisional amounts for the income tax effects of the Tax Act for which the accounting is incomplete but a reasonable estimate could be determined. There were no specific impacts of the Tax Act that could not be reasonably estimated. Our estimate of the impact of the Tax Act may be adjusted throughout the allowable measurement period as we collect additional information, prepare and analyze the information and evaluate any regulatory guidance or clarifications. Our review is expected to include:

We recognize in our Consolidated Financial Statements the impact of an income tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Related interest and penalties are classified as income taxes in the financial statements.

See Note 6 for more information regarding unrecognized income tax benefits.

In ~~November~~July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~2015-17,~~2015-11, ~~Income Taxes~~Inventory - Simplifying the Measurement of Inventory (Topic ~~840) - Balance Sheet Classification of Deferred Taxes~~330). ASU ~~2015-17~~2015-11 requires ~~that deferred tax assets~~inventory to be subsequently measured using the lower of cost and ~~liabilities be classified~~net realizable value, thereby eliminating the market value approach. Net realizable value is defined as ~~noncurrent~~the “estimated selling prices in ~~a classified statement~~the ordinary course of ~~financial position.~~business, less reasonably predictable costs of completion, disposal and transportation.” ASU ~~2015-17~~2015-11 is effective for reporting periods beginning after December 15, 2016 and ~~can be~~is applied ~~either prospectively to all deferred tax assets~~prospectively. We adopted ASU 2015-11 at January 1, 2017. The adoption of ASU 2015-11 did not have a significant impact on our financial statements or disclosure.

In January 2017, the FASB issued ASU 2017-04, Intangible - Goodwill and ~~liabilities or retrospectively to all periods presented.~~Other (Topic 350) - Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the goodwill impairment test by eliminating the second step of the current two-step impairment test. ASU 2017-04 is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019 and is applied prospectively. Early adoption is ~~permitted.~~permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We adopted ASU ~~2015-17~~2017-04 at January 1, 2017. The adoption of ASU 2017-04 did not have a significant impact on ~~December 31, 2015. The guidance was applied prospectively and~~ our ~~deferred tax assets and liabilities were presented as noncurrent in our consolidated balance sheet as of December 31, 2015.~~financial statements or disclosure.

Basic earnings per share (“EPS”) is computed by dividing net income attributable to Amkor common stockholders by the ~~weighted average~~weighted-average number of common shares outstanding during the period. The ~~weighted average~~weighted-average number of common shares outstanding includes restricted shares held by retirement eligible recipients and is reduced for treasury stock.

Diluted EPS is computed on the basis of the ~~weighted average~~weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. Dilutive potential common shares include outstanding stock options and unvested restricted ~~shares and convertible debt.~~ shares.

The following table summarizes the ~~computation~~computations of basic and diluted EPS:

For the Year Ended December 31,
2015 2014 2013
(In thousands, except per share data)
Net income attributable to Amkor $ 56,812
$ 130,386
$ 109,296
Income allocated to participating securities (65 ) (372 ) (681 )
Net income available to Amkor common stockholders — basic 56,747
130,014
108,615
Adjustment for dilutive securities on net income:
Net income reallocated to participating securities —
6
93
Interest on 6.0% convertible notes due 2014, net of tax —
1,039
9,440
Net income attributable to Amkor — diluted $ 56,747
$ 131,059
$ 118,148

Weighted average shares outstanding — basic 236,850
230,710
187,032
Effect of dilutive securities:
Stock options and restricted share awards 320
712
21
6.0% convertible notes due 2014 —
5,309
48,277
Weighted average shares outstanding — diluted 237,170
236,731
235,330
Net income attributable to Amkor per common share:
Basic $ 0.24
$ 0.56
$ 0.58
Diluted 0.24
0.55
0.50



	For the Year Ended December 31
	2017		2016		2015
	(In thousands, except per share data)
Net income attributable to Amkor	$	260,706	$	164,190	$	51,098
Income allocated to participating securities	—		—		(59		)
Net income available to Amkor common stockholders	$	260,706	$	164,190	$	51,039

Weighted-average shares outstanding — basic	238,937		237,416		236,850
Effect of dilutive securities:
Stock options and restricted share awards	714		618		320
Weighted-average shares outstanding — diluted	239,651		238,034		237,170
Net income attributable to Amkor per common share:
Basic	$	1.09	$	0.69	$	0.22
Diluted	1.09		0.69		0.22

The following table summarizes the potential shares of common stock that were excluded from diluted EPS, because the effect of including these potential shares was ~~antidilutive:~~anti-dilutive:

For the Year Ended December 31,
2015 2014 2013
(In thousands)
Stock options and restricted share awards 1,858
1,303
4,890

In certain foreign locations, we use non-recourse factoring arrangements with third party financial institutions to manage our working capital and cash flows. Under this program, we sell receivables to a financial institution for cash at a discount to the face amount. As part of the factoring arrangements, we perform certain collection and administrative functions for the receivables sold. For the year ended December 31, ~~2015~~2017 and ~~2014,~~2016, we sold accounts receivable totaling ~~$323.5~~$611.2 million and ~~$340.0~~$574.1 million, respectively, ~~for a discount, plus~~net of discounts and fees of ~~$1.5~~$4.6 million ~~in 2015~~ and ~~2014.~~$2.5 million, respectively.

Inventories consist of the following:

Property, plant and equipment consist of the following:

~~Depreciation expense was $492.5 million, $463.5~~The following table summarizes our depreciation expense:

We had $46.9 million and ~~$406.7~~$44.8 million of costs for ~~2015, 2014 and 2013, respectively.~~

As part of our plan to consolidate factory operations in ~~progress reflects $312.1 million~~Korea, we sold the land and buildings comprising our K1 factory in May 2017 for $142.4 million. We received 10% of ~~costs, including capitalized interest~~the sale price at signing in November 2016 and the balance at closing, at which time we recognized a pre-tax gain of ~~$18.7~~$108.1 million.

~~The following table presents the changes~~Changes in the carrying amount of ~~goodwill:~~goodwill are as follows:

Goodwill ~~acquired in the year~~ relates to the increase in our ownership interest in J-Devices to 100% on December 30, 2015 (Note 3). No goodwill impairment has been identified in any of the years presented.

Accrued expenses consist of the following:

~~Following is a summary of short-term~~Short-term borrowings and long-term ~~debt:~~debt consist of the following:

December 31,
2015 2014
(In thousands)
Debt of Amkor Technology, Inc.:
Senior secured credit facilities:
$200 million revolving credit facility, LIBOR plus 1.25%-1.75%, due December 2019 (1) $ 100,000
$ —
Senior notes:
7.375% Senior notes, due May 2018 (2) —
345,000
6.625% Senior notes, due June 2021, $75 million related party 400,000
400,000
6.375% Senior notes, due October 2022 525,000
525,000
Debt of subsidiaries:
Amkor Technology Korea, Inc. (10):
$41 million revolving credit facility, foreign currency funding-linked base rate plus 1.60%, due June 2016 (3) 40,000
—
Term loan, LIBOR plus 2.60%, due May 2018 (4) 120,000
—
Term loan, LIBOR plus 2.70%, due December 2019 (5) 70,000
70,000
Term loan, foreign currency funding-linked base rate plus 1.35%, due May 2020 (6) 150,000
—
Term loan, foreign currency funding-linked base rate plus 1.35%, due May 2020 (7) 80,000
—
Term Loan, fund floating rate plus 1.60%, due June 2020 (8) 40,000
—
Term loan, LIBOR plus 3.70%, due June 2016 (9) —
70,000
Term loan, foreign currency funding-linked base rate plus 1.80%, due March 2017 (7) —
80,000
Term loan, LIBOR plus 3.70%, due July 2017 (9) —
30,000
Term loan, foreign currency funding-linked base rate plus 1.75%, due September 2017 (8) —
5,000
J-Devices Corporation (11)(15):
Short-term credit facilities, variable rate, due February and June 2016 (12) 15,582
—
Short-term credit facility, fixed rate at 0.50%, due June 2016 (12) 5,808
—
Term loans, TIBOR plus 1.00%, due June and November 2016 (13)
2,800
—
Term loans, fixed rate at 0.53%, due April 2018 (14) 31,465
—
Amkor Technology Taiwan Ltd.:
Revolving credit facility, TAIFX plus a bank-determined spread, due November 2020 (16)
10,000
—
1,590,655
1,525,000
Add: Unamortized premium 5,222
5,824
Less: Short-term borrowings and current portion of long-term debt (76,770 ) (5,000 )
Long-term debt (including related party) $ 1,519,107
$ 1,525,824



	December 31,
	2017			2016
	(In thousands)
Debt of Amkor Technology, Inc.:
Senior secured credit facilities:
$200 million revolving credit facility, LIBOR plus 1.25%-1.75%, due December 2019 (1)	$	—		$	—
Senior notes:
6.625% Senior notes, due June 2021 (2)	200,000			400,000
6.375% Senior notes, due October 2022	524,971			524,971
Debt of subsidiaries:
Amkor Technology Korea, Inc.:
$75 million revolving credit facility, foreign currency funding-linked base rate plus 1.60%, due June 2018 (3)	75,000			—
Term loan, LIBOR plus 2.70%, due December 2019	55,000			55,000
Term loan, foreign currency funding-linked base rate plus 1.32%, due May 2020	150,000			150,000
Term loan, fixed rate at 3.70%, due May 2020 (4)	120,000			—
Term loan, fund floating rate plus 1.60%, due June 2020 (5)	86,000			86,000
Term loan, LIBOR plus 2.60%, due May 2018 (4)	—			120,000
Term loan, foreign currency funding-linked base rate plus 1.33%, due May 2020 (3)	—			80,000
J-Devices Corporation:
Short-term term loans, variable rates (6)	30,455			22,230
Term loans, fixed rate at 0.53%, due April 2018	6,744			19,460
Term loan, fixed rate at 0.86%, due June 2022 (7)	39,933			—
Term loan, fixed rate at 0.60%, due July 2022 (8)	8,430			—
Other:
Revolving credit facility, TAIFX plus a bank-determined spread, due November 2020 (Taiwan) (9)	20,000			20,000
Term loan, LIBOR plus 1.80%, due December 2019 (China) (10)	49,000			—
	1,365,533			1,477,661
Less: Unamortized premium and deferred debt costs, net	(1,104		)	(2,831		)
Less: Short-term borrowings and current portion of long-term debt	(123,848		)	(35,192		)
Long-term debt (including related party)	$	1,240,581		$	1,439,638

The debt of Amkor Technology, Inc. is structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries. The agreements governing our indebtedness contain a number of affirmative and negative covenants which restrict our ability to pay dividends and could restrict our operations. We have never paid a dividend to our stockholders and we do not have any present plans for doing so. We were in compliance with all of our covenants at December 31, ~~2015~~2017 and ~~2014~~2016.

Our subsidiary in Korea maintains an unfunded severance plan that covers certain employees that were employed prior to August 1, 2015. To the extent eligible employees are terminated, our subsidiary in Korea would be required to make ~~lump-sum~~lump-

sum severance payments on behalf of these eligible employees for service provided prior to August 1, 2015. Factors used to determine severance benefits include employees' length of service, seniority and rate of pay. The employees' length of service and seniority are fixed as of July 31, 2015. The employees' rate of pay is adjusted to the rate of pay at the time of termination. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date. Our contributions to the National Pension Plan of the Republic of Korea are deducted from accrued severance benefit liabilities. On August 1, 2015, our subsidiary in Korea began sponsoring a defined benefit pension plan and a defined contribution plan. ~~For future service benefits, existing~~Existing employees ~~have~~at that time were given the option of choosing either a defined benefit pension plan or a defined contribution plan for their future benefits and new employees ~~will be~~since that date are enrolled in a defined contribution plan.

The changes to the balance of our accrued severance ~~accrual~~plan obligations are as follows:

Our subsidiaries in Japan, Korea, Malaysia, the Philippines and Taiwan sponsor defined benefit plans (the “Plans”). Charges to expense are based upon actuarial analyses.



	Title of Each Class		Name of Each Exchange on Which Registered
	Common Stock, $0.001 par value		The NASDAQ Global Select Market



Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o	Emerging growth company o
(Do not check if a smaller reporting company)



		Page
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	17
Item 1B.	Unresolved Staff Comments	32
Item 2.	Properties	32
Item 3.	Legal Proceedings	33
Item 4.	Mine Safety Disclosures	33

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33
Item 6.	Selected ~~Consolidated~~ Financial Data	36
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4847
Item 8.	Financial Statements and Supplementary Data	50
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8991
Item 9A.	Controls and Procedures	8991
Item 9B.	Other Information	9092

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	9092
Item 11.	Executive Compensation	9092
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	9192
Item 13.	Certain Relationships and Related Transactions and Director Independence	9193
Item 14.	Principal Accountant Fees and Services	9193

PART IV
Item 15.	Exhibits and Financial Statement Schedules	9193
Item 16.	Form 10-K Summary	93



~~End Market~~	~~Applications~~	~~Package Type~~

~~Communications~~	~~Handsets (Cell Phones, Feature Phones, Smart Phones)~~ ~~Handheld Devices~~ ~~Tablets~~ ~~Wireless LAN~~	~~Stacked Chip Scale Package~~ ~~Flip Chip Chip Scale Package~~ ~~Wafer Level Chip Scale Package~~ ~~ChipArray Ball Grid Array~~ ~~Fine Pitch Flip Chip Chip Scale Package~~ ~~Flip Chip Stacked Chip Scale Package~~

~~Automotive and Industrial~~	~~Infotainment~~ ~~Safety~~ ~~Performance, Fuel Efficiency and Environmental Sustainability~~ ~~Comfort, Aesthetics and Security~~	~~MicroLeadFrame~~ ~~Small Outline Integrated Circuit~~ ~~Thin Shrink Small Outline Package~~ ~~Plastic Ball Grid Array~~ ~~Thin Quad Flat Pack~~ ~~Flip Chip Ball Grid Array~~ ~~ChipArray Ball Grid Array~~

~~Consumer~~	~~Television~~ ~~Set Top Boxes~~ ~~Portable Media/Personal~~ ~~Visual/Imaging Products~~ ~~Gaming~~	~~Flip Chip Ball Grid Array~~ ~~Thin Quad Flat Pack~~ ~~ChipArray Ball Grid Array~~ ~~MicroLeadFrame~~ ~~Digital Micromirror Device~~ ~~Plastic Ball Grid Array~~

~~Networking~~	~~Servers~~ ~~Routers~~ ~~Switches~~	~~Flip Chip Ball Grid Array~~ ~~Plastic Ball Grid Array~~ ~~MicroLeadFrame~~ ~~ChipArray Ball Grid Array~~ ~~Thin Quad Flat Pack~~

~~Computing~~	~~Desk Top Computer~~ ~~Laptop Computer~~ ~~Notebook Computer~~ ~~Hard Disk Drive~~ ~~Printers and Other Peripherals~~ ~~Computer Server~~	~~MicroLeadFrame~~ ~~Flip Chip Ball Grid Array~~ ~~ChipArray Ball Grid Array~~ ~~Flip Chip Chip Scale Package~~ ~~Stacked Chip Scale Package~~ ~~Small Outline Integrated Circuit~~



		~~Approximate~~ ~~Facility Size~~ ~~(Square Feet)~~
~~China~~
~~Shanghai, China (1)~~		~~915,000~~
~~Japan~~
~~Usuki, Japan~~		~~460,000~~
~~Hakodate, Japan (2)~~		~~438,000~~
~~Kumamoto, Japan (2)~~		~~370,000~~
~~Fukui, Japan~~		~~267,000~~
~~Kitsuki, Japan~~		~~183,000~~
~~Aizu, Japan (3)~~		~~170,000~~
~~Miyagi, Japan~~		~~169,000~~
~~Kitakami, Japan (3)~~		~~127,000~~
~~Oita, Japan (3)~~		~~117,000~~
~~Fukuoka, Japan (3)~~		~~104,000~~
~~Neagari, Japan (3)~~		~~89,000~~
~~Korea~~
~~Gwangju, Korea~~		~~1,154,000~~
~~Seoul, Korea~~		~~666,000~~
~~Pupyong, Korea (4)~~		~~448,000~~
~~Malaysia~~
~~Telok Panglima Garang, Malaysia (1)~~		~~379,000~~
~~Philippines~~
~~Muntinlupa, Philippines (5)~~		~~648,000~~
~~Province of Laguna, Philippines (5)~~		~~633,000~~
~~Taiwan~~
~~Hsinchu, Taiwan~~		~~490,000~~
~~Lung Tan, Taiwan~~		~~353,000~~

~~Total all facilities~~		~~8,180,000~~



	Delaware (State of incorporation)		23-1722724 (I.R.S. Employer Identification Number)



	Year Ended December 31,
	2015				2014				2013
	(In millions, except percentage of net sales)
Advanced products	$	1,433	49.7	%	$	1,553	49.6	%	$	1,451	49.1	%
Mainstream products	1,452		50.3	%	1,576		50.4	%	1,505		50.9	%
Total net sales	$	2,885	100.0	%	$	3,129	100.0	%	$	2,956	100.0	%



	Approximate Facility Size (Square Feet)
	Owned	Leased	Total
China (1)	1,317,000	—	1,317,000
Japan	1,687,000	525,000	2,212,000
Korea	2,979,000	—	2,979,000
Malaysia (1)	385,000	—	385,000
Philippines (2)	661,000	658,000	1,319,000
Portugal	498,000	—	498,000
Taiwan	864,000	—	864,000

Total all facilities	8,391,000	1,183,000	9,574,000


(2)	~~Includes leased support facilities at a nearby location.~~


~~(4)~~	~~Includes a lease for 44,000 square feet of building space.~~


~~(5)~~	As a result of foreign ownership restrictions in the Philippines, the land is leased. A portion of the land we lease is owned by realty companies in which we own a 40% interest. ~~We also lease 648,000 square feet of building space.~~



	High		Low
2015
First Quarter	$	9.91	$	6.35
Second Quarter	8.79		5.90
Third Quarter	5.93		4.14
Fourth Quarter	6.93		4.44
2014
First Quarter	$	6.86	$	5.12
Second Quarter	12.21		6.88
Third Quarter	11.44		8.41
Fourth Quarter	8.61		5.97


Period	Total Number of Shares Purchased (a)	Average Price Paid Per Share ($)		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ($) (b)		Total Number of Shares Purchased (a)	Average Price Paid Per Share ($)		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ($) (b)

October 1-October 31	—	$	—	—	$	91,586,032	—	$	—	—	$	91,586,032
November 1-November 30	27,707	6.59		—	91,586,032		5,750	11.39		—	91,586,032
December 1-December 31	—	—		—	91,586,032		—	—		—	91,586,032
Total	27,707	$	6.59	—			5,750	$	11.39	—


(a)	Represents shares of common stock surrendered to us to satisfy tax withholding obligations associated with the vesting of restricted shares issued to employees.


	Year Ended December 31,												For the Year Ended December 31
	2010		2011		2012		2013		2014		2015		2012		2013		2014		2015		2016		2017
Amkor Technology, Inc.	$	100.00	$	58.84	$	57.23	$	82.73	$	95.82	$	82.05	$	100.00	$	144.55	$	167.42	$	143.37	$	248.77	$	236.98
S&P 500	100.00		102.11		118.45		156.82		178.29		180.75		100.00		132.39		150.51		152.59		170.84		208.14
PHLX Semiconductor	100.00		103.93		114.9		152.42		194.3		180.02		100.00		130.15		167.68		156.67		208.23		292.66



	2017		2016		2015
End Market Distribution Data (an approximation including representative devices and applications based on a sampling of our largest customers):
Communications (smart phones, tablets, handheld devices)	43	%	42	%	53	%
Automotive, industrial and other (driver assist, infotainment, safety, performance)	26	%	26	%	13	%
Computing (data center, PC/laptops, infrastructure, storage)	18	%	18	%	22	%
Consumer (televisions, set-top boxes, personal electronics)	13	%	14	%	12	%
Total net sales	100	%	100	%	100	%


~~(3)~~	~~Leased facility.~~


	For the Year Ended December 31,										For the Year Ended December 31
	2015 (d)		2014 (c)		2013 (e)		2012		2011		2017 (f)			2016 (g)		2015 (g)		2014 (e)		2013 (h)
	(In thousands, except per share data)										(In thousands, except per share data)
Income Statement Data:
Net sales	$	2,884,603	$	3,129,440	$	2,956,450	$	2,759,546	$	2,776,359	$	4,186,497		$	3,893,635	$	2,884,603	$	3,129,440	$	2,956,450
Gross profit (a)	479,265		552,822		544,513		423,810		490,569		757,273			695,477		479,265		552,822		544,513
Gain on sale of real estate (b)											(108,109		)	—		—		—		—
Operating income	164,839		221,460		232,109		152,692		193,670		401,313			293,940		164,839		221,460		232,109
Loss on debt retirement (b)	9,560		757		12,330		1,199		15,531
Income tax expense	28,035		33,845		22,646		17,001		7,124
Equity in earnings of J-Devices (c)	20,107		31,654		10,316		5,592		7,085
Net income (a) (c) (d)	59,607		133,887		111,657		42,702		93,095
Loss on debt retirement (c)											4,835			—		9,560		757		12,330
Income tax expense (d)											38,982			47,853		28,035		33,845		22,646
Equity in earnings of J-Devices (e)											—			—		14,016		31,007		9,452
Net income (a) (e)											264,888			167,304		53,893		133,240		110,793
Net income attributable to Amkor	56,812		130,386		109,296		41,818		91,808		260,706			164,190		51,098		129,739		108,432
Net income attributable to Amkor per common share:
Basic	$	0.24	$	0.56	$	0.58	$	0.26	$	0.48	$	1.09		$	0.69	$	0.22	$	0.56	$	0.58
Diluted	$	0.24	$	0.55	$	0.50	$	0.24	$	0.39	$	1.09		$	0.69	$	0.22	$	0.55	$	0.50

Other Financial Data:
Depreciation and amortization	$	494,200	$	464,706	$	410,346	$	370,479	$	335,644	$	581,940		$	555,186	$	494,200	$	464,706	$	410,346
Payments for property, plant and equipment	537,975		681,120		566,256		533,512		466,694		550,943			650,038		537,975		681,120		566,256

Balance Sheet Data:
Cash and cash equivalents	$	523,172	$	449,946	$	610,442	$	413,048	$	434,631	$	596,364		$	549,518	$	523,172	$	449,946	$	610,442
Working capital	299,296		497,358		541,480		438,781		354,644		289,081			404,035		299,296		497,358		541,480
Total assets	4,031,300		3,635,405		3,427,298		3,025,215		2,773,047		4,521,509			4,092,086		4,026,428		3,633,918		3,426,166
Non-current liabilities, including debt	1,787,983		1,803,879		1,771,422		1,705,794		1,429,640		1,468,941			1,683,021		1,790,708		1,803,879		1,771,422
Total Amkor stockholders’ equity	1,207,883		1,116,235		953,740		657,955		693,266		1,667,328			1,383,588		1,200,286		1,114,748		952,608


(a)	In January 2015, we reached a resolution to a patent license dispute and entered into a settlement agreement. During 2014 ~~2013~~ and ~~2012~~2013 we recorded charges of $75.3 million ~~$10.0 million~~ and ~~$50.0~~$10.0 million, respectively, to cost of sales and $13.7 million ~~$1.8 million,~~ and ~~$6.0~~$1.8 million, respectively, to interest expense relating to this patent license dispute.


(b)	In May 2017, we sold the land and buildings comprising our K1 factory for $142.4 million which resulted in a pre-tax gain of $108.1 million


~~(c)~~(d)	In 2017, income tax expense includes an estimated net tax benefit of $41.6 million primarily due to the reversal of a valuation allowance on certain U.S. deferred tax assets as a result of the enactment of the Tax Act.


~~(d)~~(f)	On May 22, 2017, we completed the purchase of Nanium. Their financial results have been included in our Consolidated Financial Statements from the date of acquisition.


~~(e)~~(h)	On July 31, 2013, we completed the purchase of Amkor Technology Malaysia Sdn. Bhd. ~~The~~Their financial results ~~of the entity~~ have been included in our Consolidated Financial Statements from the date of acquisition.



	For the Quarter Ended
	Dec. 31, 2015			Sept. 30, 2015		June 30, 2015		Mar. 31, 2015		Dec. 31, 2014		Sept. 30, 2014		June 30, 2014		Mar. 31, 2014
	(In thousands, except per share data)
Net sales	$	670,644		$	734,362	$	736,722	$	742,875	$	853,113	$	812,824	$	767,459	$	696,044
Gross profit	102,620			126,600		115,098		134,947		120,071		153,217		150,714		128,820
Operating income	20,922			51,295		38,643		53,979		39,968		75,180		60,961		45,351
Loss on debt retirement, net	—			—		9,349		211		—		—		622		135
Income tax expense	837			16,568		4,631		5,999		1,420		14,985		12,511		4,929
Equity in earnings of J-Devices	4,647			1,656		7,566		6,238		2,485		3,372		20,036		5,761
Net (loss) income	(9,312		)	29,021		10,201		29,697		14,128		48,170		50,406		21,183
Net (loss) income attributable to Amkor	(9,721		)	28,174		9,578		28,781		13,135		47,097		49,521		20,633
Net (loss) income attributable to Amkor per common share:
Basic	$	(0.04	)	$	0.12	$	0.04	$	0.12	$	0.06	$	0.20	$	0.21	$	0.09
Diluted	$	(0.04	)	$	0.12	$	0.04	$	0.12	$	0.06	$	0.20	$	0.21	$	0.09


			Payments Due for Year Ending December 31,														Payments Due for Year Ending December 31,
	Total		2016		2017		2018		2019		2020		Thereafter		Total		2018		2019		2020		2021		2022		Thereafter
	(In thousands)														(In thousands)
Total debt	$	1,590,655	$	76,770	$	12,579	$	126,306	$	250,000	$	200,000	$	925,000	$	1,365,533	$	123,848	$	173,649	$	326,649	$	210,649	$	530,738	$	—
Scheduled interest payment obligations (1)	443,220		77,087		76,403		74,046		72,543		62,954		80,187		255,162		66,274		63,516		51,689		40,197		33,486		—
Purchase obligations (2)	144,929		132,981		2,258		4,590		905		905		3,290		143,902		131,860		2,244		1,863		1,592		1,591		4,752
Operating lease obligations	72,143		21,870		15,316		9,131		8,526		5,082		12,218		109,826		26,439		21,740		13,694		10,530		8,468		28,955
Severance obligations (3)	142,959		14,306		12,887		11,586		10,428		9,387		84,365		153,735		15,190		13,594		12,248		11,061		9,971		91,671
Settlement payments (4)	116,250		38,750		38,750		38,750		—		—		—		38,750		38,750		—		—		—		—		—
Total contractual obligations	$	2,510,156	$	361,764	$	158,193	$	264,409	$	342,402	$	278,328	$	1,105,060	$	2,066,908	$	402,361	$	274,743	$	406,143	$	274,029	$	584,254	$	125,378


(1)	Scheduled interest payment obligations were calculated using stated coupon rates for ~~fixed rate~~fixed-rate debt and interest rates applicable at December 31, ~~2015~~2017, for ~~variable rate~~variable-rate debt.


(2)	Represents off-balance sheet purchase obligations for capital expenditures and long-term supply contracts outstanding at December 31, ~~2015~~2017~~, including $32.1 million for construction obligations for K5.~~.


(3)	Represents estimated benefit payments for our Korean subsidiary severance plan.


(4)	Represents settlement payments for patent license litigation. At December 31, ~~2015,~~2017, the total obligation is ~~$116.3~~$38.8 million of which ~~$33.0~~$37.8 million is a current liability ~~$73.1 million is a non-current liability~~ and ~~$10.2~~$1.0 million will be imputed into interest over time.



	Page
Report of Independent Registered Public Accounting Firm	51
Consolidated Statements of Income — Years ended December 31, ~~2015, 2014~~2017, 2016 and ~~2013~~2015	5253
Consolidated Statements of Comprehensive Income — Years ended December 31, ~~2015, 2014~~2017, 2016 and ~~2013~~2015	5354
Consolidated Balance Sheets — December 31, ~~2015~~2017 and ~~2014~~2016	5455
Consolidated Statements of Stockholders’ Equity — Years ended December 31, ~~2015, 2014~~2017, 2016 and ~~2013~~2015	5556
Consolidated Statements of Cash Flows — Years ended December 31, ~~2015, 2014~~2017, 2016 and ~~2013~~2015	5657
Notes to Consolidated Financial Statements	5758
Schedule II — Valuation and Qualifying Accounts	8890


				Additional Paid- In Capital			Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)											Total Amkor Stockholders' Equity				Noncontrolling Interest in Subsidiaries				Total Equity							Additional Paid- In Capital			Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)								Total Amkor Stockholders' Equity			Noncontrolling Interest in Subsidiaries			Total Equity
	Common Stock					Treasury Stock											Common Stock												Treasury Stock
	Shares	Par Value				Shares								Cost						Shares									Par Value							Shares			Cost
	(In thousands)																																(In thousands)
Balance at December 31, 2012	197,709	$	198			$				1,614,143				$	(756,644	)		$	11,241				(45,312	)					$				(210,983	)	$	657,955	$	8,839				$	666,794
Balance at December 31, 2014																																	282,231		$	282	$	1,878,810		$	(518,845	)		$	(32,471	)	(45,604	)	$	(213,028	)	$	1,114,748		$	14,701		$	1,129,449
Net income	—	—				—				109,296				—				—			—				109,296				2,361					111,657		—	—			—				51,098			—			—		—			51,098			2,795			53,893
Other comprehensive loss	—	—		—				—				(11,496		)		—			—				(11,496		)		—					(11,496		)
Conversion of debt to common stock	64,027	64		194,970			—				—				—			—				195,034				—				195,034
Other comprehensive income (loss)																																	—		—		—			—				30,387			—		—			30,387			—			30,387
Treasury stock acquired through surrender of shares for tax withholding	—	—		—			—				—				(95	)		(466		)		(466		)		—				(466		)	—		—		—			—				—			(115	)	(730		)	(730		)	—			(730		)
Issuance of stock through share-based compensation plans	373	—		446			—				—				—			—				446				—				446			493		1		930			—				—			—		—			931			—			931
Share-based compensation	—	—		2,971			—				—				—			—				2,971				—				2,971			—		—		3,852			—				—			—		—			3,852			—			3,852
Balance at December 31, 2013	262,109	$	262	$	1,812,530		$	(647,348	)		$	(255	)		(45,407	)		$	(211,449	)		$	953,740			$	11,200			$	964,940
Subsidiary dividends paid to noncontrolling interests																																	—		—		—			—				—			—		—			—			(246		)	(246		)
Balance at December 31, 2015																																	282,724		$	283	$	1,883,592		$	(467,747	)		$	(2,084	)	(45,719	)	$	(213,758	)	$	1,200,286		$	17,250		$	1,217,536
Net income	—	—		—			130,386				—				—			—				130,386				3,501				133,887			—		—		—			164,190				—			—		—			164,190			3,114			167,304
Other comprehensive loss	—	—		—			—				(32,612		)		—			—				(32,612		)		—				(32,612		)
Conversion of debt to common stock	18,632	19		56,331			—				—				—			—				56,350				—				56,350
Other comprehensive income (loss)																																	—		—		—			—				8,346			—		—			8,346			—			8,346
Treasury stock acquired through surrender of shares for tax withholding	—	—		—			—				—				(197	)		(1,579		)		(1,579		)		—				(1,579		)	—		—		—			—				—			(95	)	(732		)	(732		)	—			(732		)
Issuance of stock through share-based compensation plans	1,490	1		6,249			—				—				—			—				6,250				—				6,250			1,755		1		8,246			—				—			—		—			8,247			—			8,247
Share-based compensation	—	—		3,700			—				—				—			—				3,700				—				3,700			—		—		3,251			—				—			—		—			3,251			—			3,251
Balance at December 31, 2014	282,231	$	282	$	1,878,810		$	(516,962	)		$	(32,867	)		(45,604	)		$	(213,028	)		$	1,116,235			$	14,701			$	1,130,936
Subsidiary dividends paid to noncontrolling interests																																	—		—		—			—				—			—		—			—			(548		)	(548		)
Balance at December 31, 2016																																	284,479		$	284	$	1,895,089		$	(303,557	)		$	6,262		(45,814	)	$	(214,490	)	$	1,383,588		$	19,816		$	1,403,404
Net income	—	—		—			56,812				—				—			—				56,812				2,795				59,607			—		—		—			260,706				—			—		—			260,706			4,182			264,888
Other comprehensive income	—	—		—			—				30,783				—			—				30,783				—				30,783
Other comprehensive income (loss)																																	—		—		—			—				16,257			—		—			16,257			—			16,257
Treasury stock acquired through surrender of shares for tax withholding	—	—		—			—				—				(115	)		(730		)		(730		)		—				(730		)	—		—		—			—				—			(131	)	(1,492		)	(1,492		)	—			(1,492		)
Issuance of stock through share-based compensation plans	493	1		930			—				—				—			—				931				—				931			650		1		3,123			—				—			—		—			3,124			—			3,124
Share-based compensation	—	—		3,852			—				—				—			—				3,852				—				3,852			—		—		5,145			—				—			—		—			5,145			—			5,145
Subsidiary dividends paid to noncontrolling interest	—	—		—			—				—				—			—				—				(246		)		(246		)
Balance at December 31, 2015	282,724	$	283	$	1,883,592		$	(460,150	)		$	(2,084	)		(45,719	)		$	(213,758	)		$	1,207,883			$	17,250			$	1,225,133
Subsidiary dividends paid to noncontrolling interests																																	—		—		—			—				—			—		—			—			(547		)	(547		)
Balance at December 31, 2017																																	285,129		$	285	$	1,903,357		$	(42,851	)		$	22,519		(45,945	)	$	(215,982	)	$	1,667,328		$	23,451		$	1,690,779


1.	Description of Business and Summary of Significant Accounting Policies



Land use rights	50 to 90 years
Buildings and improvements	10 to 40 years
Machinery and equipment	2 to 7 years
Software and computer equipment	3 to 5 years
Furniture, fixtures and other equipment	4 to 10 years



	For the Year Ended December 31, 2017
	As Reported		New Revenue Standard Adjustment (Estimate)		As Adjusted (Estimate)
	(In thousands, except per share data)
Income Statement:
Net sales	$	4,186,497	$	24,000	$	4,210,497
Cost of sales	3,429,224		17,000		3,446,224
Net income	264,888		5,000		269,888
Net income attributable to Amkor per common share:
Basic	1.09		0.02		1.11
Diluted	1.09		0.02		1.11



	For the Year Ended December 31, 2016
	As Previously Reported		New Revenue Standard Adjustment (Estimate)		As Adjusted (Estimate)
	(In thousands, except per share data)
Income Statement:
Net sales	$	3,893,635	$	36,000	$	3,929,635
Cost of sales	3,198,158		21,000		3,219,158
Net income	167,304		11,000		178,304
Net income attributable to Amkor per common share:
Basic	0.69		0.05		0.74
Diluted	0.69		0.04		0.73



	December 31, 2017
	As Reported			New Revenue Standard Adjustment (Estimate)			As Adjusted (Estimate)
	(In thousands)
Balance Sheet:
Accounts receivable, net	$	692,287		$	106,000		$	798,287
Inventories	326,492			(113,000		)	213,492
Accrued expenses	374,598			(48,000		)	326,598
Accumulated deficit	(42,851		)	31,000			(11,851		)


	(In thousands)			(In thousands)
Fair value of consideration transferred:
Cash	$	105,391		$	105,391
Fair value of our previously held equity interest in J-Devices	167,684			160,087
Total	$	273,075		$	265,478

Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	127,968		$	127,968
Accounts receivable	180,177			180,177
Inventory	42,502			42,502
Other current assets	2,363			2,363
Property, plant and equipment	230,319			230,319
Other assets	9,268			9,268
Short-term borrowings and current portion of long-term debt	(36,770		)	(36,770		)
Other current liabilities	(251,405		)	(251,405		)
Long-term debt	(18,885		)	(18,885		)
Pension obligations	(22,250		)	(22,250		)
Other non-current liabilities	(9,655		)	(21,218		)
Total identifiable net assets	253,632			242,069
Goodwill	19,443			23,409
Total	$	273,075		$	265,478



	Number of Shares (In thousands)	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2014	3,822	$	6.25
Granted	390	6.99
Exercised	(205)	4.57
Forfeited or expired	(280)	5.28
Outstanding at December 31, 2015	3,727	$	6.49	5.96	$	3,230
Fully vested at December 31, 2015 and expected to vest thereafter	3,709	$	6.50	5.95	$	3,213
Exercisable at December 31, 2015	2,571	$	6.91	4.92	$	2,018