Good day, ladies and gentlemen. And welcome to the Amkor Technology Fourth Quarter and Full Year 2013 Earnings Conference Call. My name is Cohen, and I will be your conference facilitator today. At this time, all participants are in a listen-only mode. After the speakers’ remarks, we will conduct a question-and-answer session. As a reminder, this conference is being recorded today. I would now like to turn the conference call over to Greg Johnson, Senior Director of Investor Relations and Corporate Communications. Mr. Johnson, please go ahead.

Thank you, Cohen, and good afternoon, everyone. Joining me today are Steve Kelley, our President and Chief Executive Officer; and Joanne Solomon, our Chief Financial Officer. Our press release -- our earnings press release was filed with the SEC this afternoon and it is available on our website. During this conference call, we will use non-GAAP financial measures and you can find the reconciliation to the U.S. GAAP equivalent in our press release. We will also make forward-looking statements about our expectations for Amkor’s future performance based on the environment as we currently see it. Of course actual results could be different, please refer to our press and other SEC filings for information on risk factors, uncertainties and exceptions that could cause actual results to differ materially from these expectations. Please note, that the financial results discuss today are preliminary and final data will be included in our Form 10-K. With that, let me hand it over to Steve.

Good afternoon and thanks for joining the call today. 2013 was a very good year for Amkor. Revenues grew 7% to nearly $3 billion, a new record for the company. Gross margin improved by 160 basis points and earnings per share increased 20%. My comments today will focus on the progress of our 2013 initiatives, as well as our 2014 plan. In 2013, we leveraged our strong technology base to win key 20 nanometers designs, primarily in the mobile device space. These wins were ramped to production this year. We also secured a number of other important wins, including a fingerprint sensor, which is ramping to high volume this quarter and next. Our NAND Flash business which is closely tied to the mobile device market grew 70% year-on-year and will continue to grow in 2014. We enhanced our marketing and sales strategy in 2013. Most notably, we began a concerted effort to increase our sales to Chinese and Taiwanese fabless chip companies. Success for these companies is essential, since they dominate the mid-tier and entry level segments of the mobile device markets where most of the growth is occurring. To support this initiative we reorganized our Asia sales team and are making rapid progress building a world-class support group. We expect sales to Chinese and Taiwanese fables chip companies to increase by a factor of 2 to 3 in 2014. Our technology leadership, our factories in Taiwan and China, and our talented employees are fueling success in the region. In addition, many customers are moving from Wirebond to flip chip and wafer-level packaging which plays to Amkor’s strength. Also in 2013, we began efforts to seek out and engage new customers in the analog sector. Many potential customers are open to an engagement with Amkor given our reputation for technology,…

Thanks Steve and good afternoon everyone. Looking at the fourth quarter, sales came in at the midpoint of our guidance and gross margins and earnings per share were at the high end. Sales of $755 million were up 4% from a year ago driven by our acquisition of Toshiba’s power discrete factories and strong NAND memory sales. Looking sequentially sales were down 2% as we saw the expected seasonal declines in the consumer and computing market. Gross margin of 19.9% was consistent with adjusted results in the third quarter and 150 basis points higher than the fourth quarter of 2012. Fourth quarter operating expenses were $76 million. For 2014, we expect operating expenses to be around $80 million a quarter. Our effective tax rate was 18% for 2013, reflecting the benefit of several positive discrete items. Excluding these discrete items, our effective tax rate would have been 27% and for 2014, we expect an effective tax rate of around 27% as well. Our leverage improved in 2013. Debt-to-adjusted EBITDA is 2.5x, down from 2.7x in 2012. We expect further improvement in 2014. Our liquidity is solid with $610 million in cash and $417 million in available credit lines. With that, we’ll now open the call up for your questions. Operator?

(Operator Instructions) And our first question comes from the line of Ana Goshko with Bank of America Merrill Lynch. Please go ahead.

Hi. Thanks very much for taking the question. So on the outlook, wanted to get a sense of, you did guide to improvements in the second quarter and what should be a better second half of the year. And wanted to get a sense of if you believe the trajectory of gross margin should follow, kind of, the revenue guidance you're giving for the subsequent three quarters?

Yeah. Let me make a comment there. I think what we’re seeing in 2014, when we look at the Amkor revenues, we split the revenues basically in two parts. We have the mobile communications part which is about half our revenue and the other part we classify as non-mobile com or mainstream. What’s happening in 2014 is that on the non-mobile com side, we’re seeing a seasonal uptick in the second half. On the mobile com side, we’re also seeing a seasonal -- actually an uptick due to launches of new flagship phone models. So you are seeing kind of a weak first half and then a strong second half because both the mainstream and the mobile communication products are peaking in the second half. So it’s a bit more than normal but it’s been driven by really the phone launches. If you look at our gross margin performance, our gross margin performance tracks very closely with revenue. So I believe that we will be back into the low 20% range in the second half of next year. We actually hit 20% in Q4 of 2013 this past quarter at $750 million in revenue.

Okay. Thanks very much. And then if I could just follow up, I wanted to get an update on some cash items. So, I wanted to understand where you believe, where you stand right now on payments related to the Tessera litigation settlement. And then also on the CapEx guidance for the year, does that include any expenditures related to the build of the facilities in Korea?

Okay. With respect to Tessera, we are weeks away from filing our 10-K, so ultimately I would refer you to our 10-K for the status of that litigation. We have about just under $50 million accrued for Tessera. Depending on how that case moves along the year, we may have some payments, some additional payments this year and that accrual represents the low end of our range. On the CapEx guide of around $450 million, it does include some incremental expenses as it relates to breaking ground for K5 in the second half of the year.

Okay. Great. Thank you very much.

Thank you, Ana.

Thank you. And our next question comes from the line of Suji De Silva with Topeka Capital Markets. Please go ahead.

Thanks. Hi, guys. Quick question on the mobile communications area. You had some programs that helped you in 2013 with the ramps. I'm wondering what you talked about, Steve, about the new models coming in the second half, whether that would help drive in a similar fashion overall year-over-year growth, or whether the programs in 2013 were fairly robust versus what you're expecting in 2014?

Yeah. We are definitely expecting those mobile platforms to drive our growth in second half. We spent a lot of money on the R&D side as well as on the capacity side, building the capability to win these designs in 2013. So we are expecting this to start to pay off for us in the second half of this year. So the magnitude of that uptick will depend on the success of those platforms, but I could tell you that we are ready at Amkor to meet the needs of those customers.

Okay, fair enough there. And then also, Steve, I'm curious on your comment about streamlining certain projects in favor of others what were the parameters or considerations you used about how to focus your project efforts versus other elements?

Yeah. You are referring to the R&D project streamlining process. And the basic criteria that we use, is to look at the impact on our revenue. So we rank the project based on their ability to move the needle at Amkor. And so we took a look at the projects that we're working on and realized that many of them really weren’t going to move the needle too much. So we either finished them quickly or stopped working on them, move the resources on to the high-impact projects. So our new CTO, Choon Lee is back in Korea after a year and a half assignment here in the U.S. and he is basically driving performance of the R&D group. And my own personal view is you end up with much more output when you reduce number of projects and finish them quicker. So, I think what we are going to find is we are much more productive as an R&D organization.

Great. Thanks, guys. I'll jump back in the queue.

Thank you. And our next question comes from the line of Vishal Shah with Deutsche Bank. Please go ahead.

Hi. This is Chad Dillard on line for Vishal. You had mentioned that you've been integrating some of your services between -- with Amkor and J-Devices. I was just wondering if you could potentially put any number value or incremental margin improvement or timing with what you're doing on that front.

Yeah. I can give you some color there. I’m working closely with Nakaya-san, who is the CEO of J-Devices in a number of different areas. Bottom line is we expect to improve gross margin in the J-Devices operation significantly this year. So he has a plan to do so basically using a consolidate and fill strategy. So he has a number of assets in Japan and we are basically in a position where he is reducing the footprint somewhat by focusing lot on bringing new business into his existing footprint and we are helping. So we’ve enlisted the Amkor sales force to start bringing business into Japan from customers outside Japan. And we are also helping bringing business in from other parts of Asia in Japan. J-Devices is helping us. They have a very strong automotive operation and we are learning a lot working with them and bringing those learnings back to our own automotive center of excellence in the Philippines. So, I think it’s a very symbiotic relationship and it’s going to improve our margins as well as J-Devices margins.

And then you mentioned that you are going to increasingly focus your capital to the 2.5D and 3D. And I was just curious, how do you think about the share of your revenue that you can generate over the next two years in that area?

Yeah. I think what you will find is this 2.5 and 3D in particular will start to really pick up in 2000 -- the latter part of 2015 and 2016. I think what we’ve done within Amkor is we’ve taken a cost effective approach in both 2.5 and 3D. So we are constantly looking for what would work for the smartphone market, for the mobile device market. We also work with some of the high-end participants in networking so forth, but often times the solution that works for networking IC-maker will not work for the mobile device maker, because of the cost. We're very conscious of that and we've moved most of our resource and effort on to the cost-sensitive projects.

Got it. Thank you.

Thank you. And our next comes from the line of David Dooley with Steelhead Securities. Please go ahead.

Yeah, thanks for taking my question. My question involves capital intensity of your Advanced Products Group, it's roughly $1.5 billion in size in 2013, as far as the CapEx goes how much is focused in on this particular bucket and what is the capital intensity, i.e. how many dollars do you have to spend to get a dollar of revenue in this area?

Let me make a comment there, from a capital intensity standpoint, we've spent most of our money in the advanced product area. And the basic strategy is to get our money back quickly. So there's a return on investment criteria that we use in advanced products that we wouldn't use in mainstream for instance. The second thing that we're doing in advanced products is we're putting much more effort on second wave of customers. So typically we go out and buy a new tester or a new piece of assembly equipment for the first wave of customer, who will use that piece of equipment for two or three years. It's important for us to have a second wave of customers who're ready to take that capacity when the lead customer moves to the next platform. So that's where a lot of our focus is right now. But I can tell you from a pricing standpoint, the capital that we've spent in advanced products influences our pricing in Amkor.

Okay. And as a follow-up, what are the key levers going forward to improve the gross margins, to get back to the -- besides the revenue, you can see over the last couple of quarters your material cost has come down. Are there any other trends here on the cost side of things that will help you improve margins, maybe you could give us comment on the depreciation trends as well? Thank you.

Yeah. I'll make a comment on overall about cost and then I'll turn it over to Joanne for the depreciation discussion. But clearly, we see a trend towards lower cost packages, particularly in mobile com, so leading edge customers moving more from Flip Chip to Wafer-Level CSP, which are definitely our cost, and certainly a lower material cost. So that's a good trend from the margin standpoint. The other thing that we focused on quite a bit is capacity utilization, right, we need to keep our factories full. I know that's hard to measure, you could definitely see us as we report our results, we're a high fixed cost company and we need to keep our factories full.

On the depreciation trends, if you look at Q4, 2013 it's about $100 million in the quarter as it relates to depreciation specifically on the manufacturing side it doesn't include the SG&A or some of the building side. We do see that going -- starting to increase throughout 2014 as we get closer to that 20-nanometer ramp in the second half.

Okay, thank you.

Thank you and our next comes from the line of Jairam Nathan - Sidoti & Company. Please go ahead. Jairam Nathan - Sidoti & Company: You mentioned in the prepared remarks about getting China and making China and Taiwan based mobile devices sales two to three times of where it is currently. Can you give us some idea of what it is to where it is currently in the sense as a percentage of sales or some other way or is it largely insignificant right now.

Yeah, I will classify our sales to fabless Chinese and Taiwanese customers as low and we're talking somewhere between 1% and 2% of our revenue. Jairam Nathan - Sidoti & Company: Okay.

So the good news is, it's all upside. But by the time we're exiting the year, I expect to be hopefully north of 3% of our revenue being generated in that particular segment of Taiwanese and Chinese fabless customers. Jairam Nathan - Sidoti & Company: Okay, thanks and you mentioned -- other question was on there have been some -- one of your competitors actually having an issue with their waste-water treatment, do you see that as impacting your business in more longer term in the revenue [based on this whole thing]?

Let me make just a general comment. I was impressed with the ability of Amkor and the rest of the OSAT community to respond to that particular problem. And to help our customers maintain their supply chain. So as far as I know, between Amkor and other OSATs we've been able to keep our customers whole and avoid any major impact on their manufacturing. So that was very good commentary on the industry. There's always some opportunities in these types of situations, we're certainly engaged with more than few customers in this bumping area and hopefully we could build business in the future based on our service over the last few months. Jairam Nathan - Sidoti & Company: Okay, thanks. That’s all I had.

Thank you. And our next question comes from the line of Terence Whalen with Citibank. Please go ahead.

This is Atif for Terence. Thanks for taking the question. Firstly, congratulations on the fingerprint sensing win. As we look into the second half, can you talk about your communications revenue growth half-over-half between new opportunity as well as a fingerprint sensing opportunity? And also how much sales you had from J-Devices in the fourth quarter?

Yeah. Let me start with J-Devices, J-Devices right now is at a revenue run rate just under $1 billion a year. Right now I think Joanne is trying to look at your answer on the communications side of the equation.

When you look at the communications growth in 2014, there is some positives and negatives that are impacting us. As Steve mentioned for 20-nanometer we’re starting to see some significant growth. So we are going to see some migrations to some lower cost packages as well as some of these tough times and we did have one customer who exited the wireless space in 2012. So we are having some headwinds on that. So all this puts and takes together. While we grew 24% in communications this year, we are not expecting anything write back for 2014.

Okay. I will just make one more comment. I think if you look at that on a unit basis, we have pretty impressive growth, but really it’s a story of mix as our customers moved to lower cost packages, we are going with them. The gross margin stays as good if not better, but the overall dollars stay relatively flat year-on-year because we’re competing for some of these customers that have gone away.

Okay. Then a follow-up on gross margin, 19.9% pretty close to your -- I believe your long-term model of 20%, how should we think about the gross margin expansion from here. Is it more of the mix, if you can talk about any impact from foreign exchange, exposure to Korean won or Japanese yen?

Yeah, we don’t think that foreign exchange is going to have a material impact on results this year. I believe that our gross margin moving forward is primarily a function of how well we use our capacity first of all. And secondly, there will be mix.

Okay, thanks.

Thank you. And our next question comes from the line of Randy Abrams with Credit Suisse. Please go ahead.

Yes, good morning, good evening. I wanted to ask a follow-up on CapEx. I may have missed if you guided the 2014 CapEx, but if you could also list out or go through the allocation for that spending, like how much would be tied to the 2.5 and 3 line and how much to new plant in Korea in second half?

Yeah, I can give you some color there. Right now as we look at the roughly $450 million that we’re planning to spend this year, new capital additions, about 55% of it’s capacity related and most of that will be in advance products, about 10% is R&D and that’s almost 2.5 and 3 big investments. And then the last three 5 percentage for infrastructure and the infrastructure includes the spending on (inaudible).

Okay, great. And third question on the memory business, if you could give an updated snapshot on the size and profitability of that business and potential to broaden out the customers on the memory side if that’s going to be a bigger focus?

I can make a comment about memory business in 2013 -- with 2014, but 2013 was a great for us in memory, we grew at 70% and that’s NAND Flash primarily with some mobile DRAM next in and that most of that business is being driven out of our China facility and our plant in Korea. So it’s certainly hard to repeat the 70% growth here, but last year we did about $300 million in sales into the memory market. This year we are planning to grow with the market. So we are expecting to be right around $330 million this year which is growing right around with the market.

Okay, great. And how is the profitability I guess relative to corporate average if there is a way to think about that?

Yeah, these averages up our business, no doubt that. It’s capital intensive, so it’s important for us to maintain a healthy primary business moving forward, but the gross margin is good.

Okay, thank you.

Thank you. And our next question comes from the line of Arun Seshadri with Credit Suisse. Please go ahead.

Yeah. Hi. Thanks for taking my question. First, I wanted to understand as far as Q4 goes nice gross margin performance there. If you could talk about what drove gross margin upside given that revenue came in at the middle of the range?

Arun, when you look at the gross margins in Q4, revenues were down sequentially but we were able to sustain the margins to a comfortable level of Q3, and that has a lot to do with the strength we saw on wafer level, CSP, heading into the communications. So there is a favorable mix on that front.

Okay. That’s great. Thank you. And then, I don’t know if you gave this during the call but I may have missed it. Can you talk about utilization and test packaging in Q4 and sort of your expectations of Q1?

Yeah, we don’t report utilization anymore for a number of reasons. But the most important one is we found that the aggregate utilization numbers didn’t have a lot of utility inside the company. I can’t tell you that we have a lot of unused capacity. That is something I know for sure, both on the test and the packaging side. So that’s why we started these three initiatives, the Taiwan, China initiative, the test sales initiative and the analog initiative. The idea is to use the capacity we have. So, I have confidence, we can improve our utilization this year just by going out and selling what we have in addition to the business that we bring in through investment.

Okay. That was helpful, Steve. Thank you. And then, I mean Joanne, I think you made a comment that you expect leverage to decline further in 2014. If you could talk about sort of you expect most of that leverage improvement to come from EBITDA growth?

I would expect most of it to come from EBITDA growth. We also have a converts that matures here in April, $56 million that converted in the money, the exercise price is at $3.02, but we certainly expect that to convert into equity rather than us paying at all at maturity. And other things of note on the capital structure that are coming up this year is we have our 28 senior notes 7.375. They become callable in May. They were monitoring the debt markets and if there’s an opportunity to that, we will certainly continue to be opportunistic.

Okay. Great and then Joanne, are you still in terms of free cash flow in 2014, I guess, you still expect to generate free cash flow and then any comment in terms of uses of free cash flow?

We certainly do expect to be free cash flow positive in 2014. In 2013, we started to see some tremendous improvement even in the base of making the land payment for K5. So we’re heading in the right direction on free cash flow as a result of all the initiatives to improve our utilization and grow the topline. As far as uses of that cash go, our priority is as always to invest in the business and both organic and inorganic. And after that, we’ll look to other capital structure scenarios, whether it’s either bringing down the debt level or resuming the stock buyback program.

Okay. Thanks very much.

Thank you. And our next question comes from the line of Alex Kotsubey with Eos Partners. Please go ahead.

Hi. Thank you for taking my questions. First, I just want to see, you mentioned that you had a lot of excess capacity. And I’m just wondering if you could talk about what areas that excess capacity will be in because with the market kind of going your way towards advanced packaging I would think that you actually have tighter capacity than what you are citing.

Well, I guess, I will use this opportunity as an advertisement, right, if any customers are listening. But we certainly have fair amount of flip chip capacity available as much of that business is migrating to wafer level, CSP. We are seeing opening some flip chip and we’re going after that business. Again, there is a lot of business to be had in the second wave market in that area. We also have a lot of capacity open in the wire bond area and again that’s a collection of a lot of different types of packages, a lot of different types of assembly lines but it’s out there. And we focused our sales and marketing teams on going out and trying to fill that capacity.

Got it. Okay. And then you cited for the strength that you expect in the back half of the year in new product introductions. I was just wondering maybe if you could give a little bit more context around that, just given the fact that some of the product introductions in ’13 were below expectations in terms of volume for the manufacture. So, I’m just wondering what you are focusing on, do you see new form factors or new devices coming, what sort of gets you excited about the back half?

Yeah. One of the reason I’m excited, is that a whole new technology coming, this 2 nanometer technology. And what they does, it improves performance significantly, improves power consumption significantly. And there is some other features coming on board as well. So I think, from what I've seen and heard, the product intros that are on the table for second half of this year to a much higher impact in the product intros we saw last year, which were more incremental in scope.

Okay. So, I guess your read based on what your customer are sharing with you is that they kind of realize that some of their late ’13 introductions weren't really revolutionary enough so to speak and you’re kind of seeing better products along the way.

Yeah, the question is what will inspire customers that go in and trade their phones in?

Right.

And it’s got to be something special.

Right.

And I see that potential in the second half this year.

Totally understand that you’ve had this big shift to the communications space but you are still highly tied to the semi industry in general. So I’m just wondering in the context of an improving semi industry as expected for ‘14, should we expect you to show better revenue growth than you did in ‘13 or I guess how should we be looking at you in relation to the semi industry as a whole?

Well, I think it will grow roughly in line with the semi industry. The question is how much will the semi industry grow in 2014. When I think at the end of the day if you took a look at our track record, we typically grow roughly with the market. And I think that’s where we are going to end up this year.

Okay. That’s very helpful. Thank you.

Thank you. And our next question comes from the line of Thomas Egan with J.P. Morgan. Please go ahead.

Great. Thanks for taking my question. Just a follow up on the strength that you expect in the second half of the year, particularly in the handset space. Is that something where you are looking at the handset space in general and you are saying that new models are coming and you think you are going to get a piece of that business or are there specific customers who have already signed you up to do the work with them when those models appear in the second half of the year?

Yes, I could tell you without going into specifics that we have agreements with customers today that we need to believe that we will have a very good share of that business in the second half.

Okay. Great. That’s all I needed. Thank you.

Thank you. And our next question comes from the line of [John Bisaro] with Deutsche Bank. Please go ahead.

Hi guys. Can you hear me?

Yes.

Great, thanks. You mentioned your exposure to Chinese fables players. Can you give us sense in the last 12 months as a percentage of revenues, what percent of revenue is actually are from fabless customers?

So overall at Amkor, roughly 50/50 fabless versus IDM sales. But in China and Taiwan obviously, we have very low penetration there. So that’s why we are putting so much focus in that area to try to be as good in China and Taiwan as we are in Japan, in U.S. and in Europe where we have very good share.

Okay. Great. And throughout 2013, was that trend in fabless customer share rising or declining or holding steady?

It’s going to rise, I believe, because we are entering a whole new market. In the past, the Amkor is focused primarily on the high end of the mobile device market. This year -- actually beginning last year, we extended our focus. So we are focused intently not just on high end but also the mid theoretical market and even some entry level opportunities. And we are doing that with our existing customer base. We are migrating into those different parts of the market but we are also going to partner with new customers who are already very strong in that market.

Okay. Great. Can you share perhaps in the fabless space, where end market you participate more strongly in?

Yes I mean the two big ones will be smartphones and tablets.

Okay. Great thanks a lot.

(Operator Instructions) And we have a follow-up question from Ana Goshko with Bank of America Merrill Lynch. Please go ahead.

Hi, thanks very much. I think my follow up was covered. I was going to ask about the plans with regard to the debt capital structure. And it sounds like you are monitoring potentially the higher markets to take out the bonds that become callable in May but I guess as a follow up, is that what you are looking or is there more opportunity potentially to issue debt at the subsidiary kind of, in country level of your cap structure?

Yes. Thank you so much for the question and we do monitor both the U.S. market as well as the foreign markets. We had some existing lines already in Korea that depending on liquidity situation and how much remain forum for the construction K5. We could find ourselves following more at the local level than at the U.S. level.

Got it. Okay. Well thanks very much.

Thank you.

Okay thanks Ana. That ends our Q&A. I will now turn the call back to Steve for his closing remarks.

I would like to recap our key messages. First, 2013 was a banner year for Amkor. We achieved record revenues and improved the bottom line. We won key stocks in 2013 which will ramp the volume this year. We are actively expanding our customer base. We are building a solid executive team to help drag growth. J-devices in our new power discrete business are making solid progress and despite the slow start in Q1, we expect year-on-year growth in 2014. Thanks very much for joining us today.

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.