================================================================================



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                ----------------

                                    FORM 8-K

                                ----------------


                                 CURRENT REPORT
     PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


                                 MARCH 29, 2002
                DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)




                             AMKOR TECHNOLOGY, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)




       000-29472                                          23-1722724
COMMISSION FILE NUMBER                   (I.R.S. EMPLOYER IDENTIFICATION NUMBER)




                              1345 ENTERPRISE DRIVE
                             WEST CHESTER, PA 19380
                                 (610) 431-9600
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)




================================================================================








ITEM 5.    OTHER EVENTS

    The consolidated financial statements of Anam Semiconductor, Inc. and its
subsidiaries as of and for each of the three years ended December 31, 2001 are
filed herein pursuant to rule 3-09 of Regulation S-X. We present the information
in the following order:


                                                                                  
Report of Independent Accountants...................................................  1
Consolidated Statements of Operations -- Years ended December 31, 2001, 2000
  and 1999 .........................................................................  6
Consolidated Balance Sheets -- December 31, 2001 and 2000...........................  7
Consolidated Statements of Stockholders' Equity (Deficit) -- Years ended
    December 31, 2001, 2000 and 1999................................................ 10
Consolidated Statements of Cash Flows -- Years ended
    December 31, 2001, 2000 and 1999................................................ 11
Notes to Consolidated Financial Statements.......................................... 13







                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors of
Anam Semiconductor, Inc.

We have audited the accompanying consolidated balance sheets of Anam
Semiconductor, Inc. and its subsidiary (the "Company") as of December 31, 2001
and 2000 and the related consolidated statements of operations, stockholders'
equity (deficit) and cash flows for each of the three years in the period ended
December 31, 2001, as prepared under generally accepted accounting principles in
the United States of America. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits. We did not audit 1) the
financial statements of Anam Engineering and Construction Co., Ltd. ("Anam
Construction"), the investment in which is reflected in the consolidated
financial statements referred to above using the equity method of accounting in
1999, and 2) the financial statements of Anam USA, Inc, ("Anam USA") a wholly
owned subsidiary. The Company's equity in loss of Anam Construction was $29,937
thousand in 1999. The financial statements of Anam USA reflect total assets of
$19,842 thousand and $27,668 thousand at December 31, 2001 and 2000,
respectively, and total revenues of $161,649 thousand, $499,820 thousand and
$715,756 thousand for the years ended December 31, 2001, 2000 and 1999,
respectively. Those statements referred to above were audited by other auditors
whose reports thereon have been furnished to us, and our opinion expressed
herein, insofar as it relates to the amounts included for Anam Construction and
Anam USA, is based solely on the report of the other auditors. The report of the
auditor of Anam Construction contained an information disclosure paragraph
relating to uncertainties about Anam Construction's ability to continue as a
going concern. The report of the auditor of Anam USA contained an informative
disclosure paragraph relating to uncertainties about Anam USA's ability to
continue as a going concern.

We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report of
the other auditors provide a reasonable basis for our opinion.

Continued;


                                       1

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above, after the restatement described in Note
2, present fairly, in all material respects, the consolidated financial position
of Anam Semiconductor, Inc. and its subsidiary as of December 31, 2001 and 2000,
and the results of their operations, stockholders' equity (deficit) and their
cash flows for each of the three years in the period ended December 31, 2001 in
conformity with generally accepted accounting principles in the United States.

As discussed in Note 3 to the accompanying financial statements, Anam
Semiconductor, Inc.'s revenues are generated primarily from semiconductor
foundry services provided to Amkor Technology Inc. ("Amkor") pursuant to a
foundry agreement. As described in Note 3 to the accompanying financial
statements, Anam Semiconductor, Inc. sold to Amkor all the assets of four of its
packaging and test facilities except K2 land located in the Republic of Korea on
May 17, 1999 and May 1, 2000.

As discussed in Note 4 to the accompanying financial statements, the operations
of Anam Semiconductor, Inc. and its affiliates in the Republic of Korea have
been significantly affected, and may continue to be affected for the foreseeable
future, by the general unstable economic conditions in the Republic of Korea and
in the Asia Pacific region. The ultimate effect of these uncertainties on the
financial position of the Company as of the balance sheet date cannot presently
be determined.

As more fully described in Note 5 to the accompanying financial statements, on
October 23, 1998, Anam Semiconductor, Inc. entered into the Korean financial
restructuring program known as the "Workout Program". The Workout Program is the
result of an accord among financial institutions to assist in the restructuring
of Korean business enterprises and does not involve the judicial system. The
Company's operations continued uninterrupted during the Workout Program. The
Company was released from the Workout Program with its Korean creditor banks on
July 18, 2000.


/s/ Samil Accounting Corporation
--------------------------------
Seoul, Korea
January 18, 2002


                                       2

                          Independent Auditors' Report

To the Shareholders of
Anam Engineering & Construction Co., Ltd.
Seoul, Korea

We have audited the consolidated balance sheets of Anam Engineering &
Construction Co., Ltd. and its subsidiary as of December 31, 1999, 1998 and
1997, the related consolidated statements of operations, shareholders' deficit,
and cash flows for the years then ended, all expressed in Korean Won (not
separately included herein). These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements (not separately included
herein) present fairly, in all material respects, the financial position of Anam
Engineering & Construction Co., Ltd. and its subsidiary as of December 31, 1999,
1998 and 1997, the results of their operations, the changes in their
shareholders' deficit and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

As discussed in Note 1, the Company has filed a voluntary petition for
reorganization under the Corporate Reorganization Act in the Republic of Korea.
The financial statements do not purport to reflect or provide for the
consequences of the bankruptcy proceedings. In particular, such financial
statements do not purport to show (a) as to assets, their realizable value on a
liquidation basis or their availability to satisfy liabilities; (b) as to
prepetition liabilities, the amounts that may be allowed for claims or
contingencies, or the status and priority thereof; (c) as to stockholder
accounts, the effect of any changes that may be made in the capitalization of
the Company; or (d) as to operations, the effect of any changes that may be made
in its business.

Continued;


                                       3

The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 1, the Company's recurring
losses from operations, negative working capital, and shareholders' capital
deficiency raise substantial doubt about its ability to continue as a going
concern. Management's plans concerning these matters are also discussed in Note
1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.


/s/ Ahn Kwon & Co.
------------------
Seoul, Korea
February 9, 2000


                                       4

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Anam USA, Inc.
West Chester, Pennsylvania

We have audited the accompanying balance sheets of Anam USA, Inc. (a
Pennsylvania Corporation and a wholly-owned subsidiary of Anam Semiconductor,
Inc., Seoul, Republic of Korea) as of December 31, 2001 and 2000 and the related
statements of operations, of changes in stockholder's equity (deficit) and of
cash flows for the three years in the period ended December 31, 2001 (not
separately included herein). These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above (not separately
included herein) present fairly, in all material respects, the financial
position of Anam USA, Inc. as of December 31, 2001 and 2000, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2001 in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, certain conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans concerning
these matters are also discussed in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


/s/ SIANA CARR & O'CONNOR, LLP
------------------------------
Paoli, Philadelphia
January 18, 2002


                                       5

                                    ANAM SEMICONDUCTOR, INC.
                             CONSOLIDATED STATEMENTS OF OPERATIONS

                                   ----------



                                                                          Thousands of US Dollars except per share data
                                                                          ---------------------------------------------
                                                                                  For the year ended December 31
                                                                          ---------------------------------------------
                                                                               2001            2000            1999
                                                                          -------------    ------------    ------------
                                                                                                  
Sales                                                                     $     161,700    $    344,792    $    285,925

Cost of sales                                                                   261,995         303,110         238,375
                                                                          -------------    ------------    ------------

Gross profit (loss)                                                            (100,295)         41,682          47,550
                                                                          -------------    ------------    ------------

Operating expenses
      Selling and administrative expenses                                        14,383          24,217          24,267
      Research and development                                                    3,590           1,840              87
      Loss (gain) on disposal of PP&E, net                                        3,886            (561)         (5,842)
      Provision for doubtful accounts                                                --              13             901
                                                                          -------------    ------------    ------------
         Total operating expenses                                                21,859          25,509          19,413
                                                                          -------------    ------------    ------------

Operating income (loss)                                                        (122,154)         16,173          28,137
                                                                          -------------    ------------    ------------

Other (income) expense
      Interest income                                                           (12,069)        (23,760)         (5,902)
      Interest expense                                                           23,114          71,914         185,315
      Foreign currency loss                                                       4,095          22,992          33,198
      Loss on disposal of investments, net                                          370          12,824             601
      Impairment loss on investment                                               6,254             740           1,523
      Impairment loss on loans to affiliates                                         --              --          22,646
      Guarantee obligation loss                                                   1,447          49,797              --
      Other, net                                                                  1,618          (8,877)        (17,272)
                                                                          -------------    ------------    ------------
          Total other (income) expense                                           24,829         125,630         220,109
                                                                          -------------    ------------    ------------

Loss from continuing operations before income taxes,
      equity in loss of affiliates                                             (146,983)       (109,457)       (191,972)

Equity in gain (loss) of unconsolidated affiliates                               (1,396)          1,660         (31,787)
                                                                          -------------    ------------    ------------
Loss from continuing operations before income taxes                            (148,379)       (107,797)       (223,759)

Provision (Benefit) for income taxes                                             13,794         (88,094)        (54,000)
                                                                          -------------    ------------    ------------
Loss from continuing operations                                                (162,173)        (19,703)       (169,759)
Discontinued operations:
      Income from discontinued packaging and testing operation
       to April 30, 2000 (net of income taxes of $0 ; $6,353 ; $12,408)              --          36,117         130,064
      Gain on sale of packaging and testing factories
        (net of income taxes of $0 ; $112,724 ; $14,268)                             --         434,227         149,560
                                                                          -------------    ------------    ------------

Net income (loss)                                                         $    (162,173)   $    450,641    $    109,865
                                                                          =============    ============    ============

PER SHARE DATA:

      Basic loss per common share from continuing operations              $       (1.45)   $      (0.22)   $      (5.82)
                                                                          =============    ============    ============
      Basic net income  (loss) per common share                           $       (1.45)   $       5.07    $       3.76
                                                                          =============    ============    ============
      Diluted loss per common share from continuing operations            $       (1.45)   $      (0.22)   $      (5.82)
                                                                          =============    ============    ============
      Diluted net income (loss) per common share                          $       (1.45)   $       5.07    $       3.76
                                                                          =============    ============    ============
      Shares used in computing basic
        net income (loss) per common share                                  111,880,768      88,838,496      29,208,739
                                                                          =============    ============    ============
      Shares used in computing diluted
        net income (loss) per common share                                  111,880,768      88,838,496      29,208,739
                                                                          =============    ============    ============



   The accompanying notes are an integral part of these consolidated financial
                                   statements.

                                       6

                            ANAM SEMICONDUCTOR, INC.
                           CONSOLIDATED BALANCE SHEETS

                                   ----------



                                                                     Thousands of US Dollars
                                                                     -----------------------
                                                                        As of December 31,
                                                                     -----------------------
                                                                       2001          2000
                                                                     --------     ----------
                                                                            
ASSETS

Current assets:
         Cash and cash equivalents                                   $ 74,980     $  127,772
         Restricted cash                                                1,951         17,378
         Bank deposits                                                    609         69,858
         Accounts receivable
             Trade                                                         56             --
             Due from affiliates                                       15,439         23,309
             Other                                                      4,460         12,911
         Short-term loans to affiliates, net                               --          1,619
         Inventories                                                   37,232         41,586
         Prepaid expenses                                               5,578          6,078
         Other current assets                                           4,593          2,975
                                                                     --------     ----------

                                  Total current assets                144,898        303,486

Non-current bank deposits                                                  --            159
Restricted cash                                                         7,181          9,621
Investments
  Available for sale                                                   16,535         15,803
  Affiliated companies                                                 10,470         11,442
Long-term receivables from affiliate, net of allowance for doubtful
  accounts of  $3,062 and  $0 in 2001 and 2000                          9,667         14,800
Property, plant and equipment, less
  accumulated depreciation                                            646,298        793,850
Deferred tax asset-noncurrent                                          59,092         72,886
Other assets                                                           21,689         24,897
                                                                     --------     ----------

  Total assets                                                       $915,830     $1,246,944
                                                                     ========     ==========


   The accompanying notes are an integral part of these consolidated financial
                                   statements.

Continued;


                                       7

                            ANAM SEMICONDUCTOR, INC.
                     CONSOLIDATED BALANCE SHEETS, Continued;

                                   ----------



                                                                         Thousands of US Dollars
                                                                         -----------------------
                                                                            As of December 31,
                                                                         -----------------------
                                                                           2001           2000
                                                                         --------       --------
                                                                                  
LIABILITIES AND
STOCKHOLDERS' EQUITY

Current liabilities:
         Current portion of long-term debt                               $ 20,736       $ 32,462
         Current portion of long-term installment payable                   2,719          9,844
         Current portion of long-term obligations under capital leases     97,042        100,030
         Trade accounts and notes payable                                   5,966         17,286
         Other accounts payable                                             4,019          9,522
         Accrued expenses                                                   1,584          1,963
         Other current liabilities                                          2,661         13,209
                                                                         --------       --------

                                  Total current liabilities               134,727        184,316

Long-term debt, net of current portion and
  discounts on debentures                                                  59,213         83,406
Long-term installment payable, net of current portion                         464            895
Long-term obligations under capital
  leases, net of current portion                                           58,796        144,339
Accrued severance benefits, net                                               709             --
Liability for loss contingencies                                           56,305         72,662
                                                                         --------       --------

                                  Total liabilities                      $310,214       $485,618
                                                                         --------       --------


Commitments and contingencies (Note 20)

   The accompanying notes are an integral part of these consolidated financial
                                   statements.

Continued;


                                       8

                            ANAM SEMICONDUCTOR, INC.
                     CONSOLIDATED BALANCE SHEETS, Continued;

                                   ----------



                                                           Thousands of US Dollars except share data
                                                           -----------------------------------------
                                                                      As of December 31,
                                                           -----------------------------------------
                                                              2001                           2000
                                                           ---------                     -----------
                                                                                   
LIABILITIES AND
STOCKHOLDERS' EQUITY, Continued;

Stockholders' equity:
         Capital stock, ?5,000 par value;
           authorized 300 million shares of common stock
           and 10 million shares of preferred stock
         Common stock:
             issued and outstanding
             111,880,768 shares in 2001 and 2000             539,739                         539,739
         Series A preferred stock:
             issued and outstanding
             2,240,240 shares in 2001 and 2000                15,167                          15,167
         Series B preferred stock:
             issued and outstanding
             336,036 shares in 2001 and 2000                   2,220                           2,220
                                                           ---------                     -----------
                                                             557,126                         557,126

         Capital surplus                                     530,863                         530,863
         Accumulated deficit                                (476,860)                       (314,687)

         Accumulated comprehensive income (loss):
             Unrealized losses in investments                 (1,615)                         (9,601)
             Cumulative translation adjustment                (3,898)                         (2,375)
                                                           ---------                     -----------

         Total stockholders' equity                          605,616                         761,326
                                                           ---------                     -----------

         Total liabilities and stockholders' equity        $ 915,830                     $ 1,246,944
                                                           =========                     ===========


   The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                       9

                            ANAM SEMICONDUCTOR, INC.
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                 (In thousands of US dollars except share data)



                                                                      Common Stock             Preferred Stock
                                                                -------------------------    --------------------   Capital
                                                                   Shares        Amount       Shares      Amount    Surplus
                                                                ------------    ---------    ---------   --------   --------
                                                                                                     
Balance at December 31, 1998                                      30,477,018    $ 192,849    2,576,276   $ 17,387   $182,347
                                                                ------------    ---------    ---------   --------   --------
Comprehensive income:
    Net income
    Unrealized losses on investments, net of tax
    Currency translation adjustments, net of tax
    Reclassification adjustment for currency translation
      adjustments, net of tax
Comprehensive income
Reverse stock split                                               (6,801,860)     (43,040)
Issuance of common stock for cash                                 10,000,000       41,695
Debt to equity conversion                                         19,669,600       82,011
Convertible bonds to equity conversion                             1,686,425       10,814                              8,906
Others                                                                                                                  (844)
Collection of receivable from stockholders
                                                                ------------    ---------    ---------   --------   --------
Balance at December 31, 1999                                      55,031,183      284,329    2,576,276     17,387    190,409
                                                                ------------    ---------    ---------   --------   --------
Comprehensive income:
    Net income
    Unrealized losses on investments, net of tax
    Reclassification adjustment for accumulated unrealized
      loss on investments, net of tax
    Currency translation adjustments, net of tax

Comprehensive income:
Issuance of common stock for cash                                 37,707,039      169,374                            289,626
Debt to equity conversion                                         18,398,250       82,691                             49,615
Convertible bonds to equity conversion                               744,296        3,345                              2,770
Others                                                                                                                (1,557)
Cancelled receivable from stockholders
Collection of receivable from stockholders
                                                                ------------    ---------    ---------   --------   --------
Balance at December 31, 2000                                     111,880,768      539,739    2,576,276     17,387    530,863
                                                                ------------    ---------    ---------   --------   --------
Comprehensive loss:
    Net Loss
    Unrealized losses on investments, net of tax
    Reclassification adjustment for accumulated unrealized
      loss on investments included in net loss, net of income
      tax benefit of $0
    Currency translation adjustments, net of tax

Comprehensive loss:
                                                                ------------    ---------    ---------   --------   --------
Balance at December 31, 2001                                     111,880,768    $ 539,739    2,576,276   $ 17,387   $530,863
                                                                ============    =========    =========   ========   ========




                                                                                                    Accumulated
                                                                                                      Other
                                                                Receivable from     Accumulated    Comprehensive
                                                                  Stockholders        Deficit         Income          Total
                                                                ---------------    ------------    -------------    ---------
                                                                                                       
Balance at December 31, 1998                                    $      (116,417)   $   (864,905)   $    (27,067)   $(615,806)
                                                                ---------------    ------------    ------------    ---------
Comprehensive income:
    Net income                                                                          109,865                      109,865
    Unrealized losses on investments, net of tax                                                         (2,639)      (2,639)
    Currency translation adjustments, net of tax                                                          2,205        2,205
    Reclassification adjustment for currency translation
      adjustments, net of tax                                                                            11,744       11,744
                                                                                                                   ---------
Comprehensive income:                                                                                                121,175
Reverse stock split                                                                      43,040                           --
Issuance of common stock for cash                                                                                     41,695
Debt to equity conversion                                                                                             82,011
Convertible bonds to equity conversion                                                                                19,720
Others                                                                                                                  (844)
Collection of receivable from stockholders                               54,299                                       54,299
                                                                ---------------    ------------    ------------    ---------
Balance at December 31, 1999                                            (62,118)       (712,000)        (15,757)    (297,750)
                                                                ---------------    ------------    ------------    ---------
Comprehensive income:
    Net income                                                                          450,641                      450,641
    Unrealized losses on investments, net of tax                                                         (9,043)      (9,043)
    Reclassification adjustment for accumulated unrealized
      loss on investments, net of tax                                                                       353          353
    Currency translation adjustments, net of tax                                                         12,471       12,471
                                                                                                                   ---------
Comprehensive income                                                                                                 454,422
Issuance of common stock for cash                                                                                    459,000
Debt to equity conversion                                                                                            132,306
Convertible bonds to equity conversion                                                                                 6,115
Others                                                                                                                (1,557)
Cancelled receivable from stockholders                                   53,328         (53,328)                          --
Collection of receivable from stockholders                                8,790                                        8,790
                                                                ---------------    ------------    ------------    ---------
Balance at December 31, 2000                                                 --        (314,687)        (11,976)     761,326
                                                                ---------------    ------------    ------------    ---------
Comprehensive loss:
    Net Loss                                                                           (162,173)                    (162,173)
    Unrealized losses on investments, net of tax                                                          1,407        1,407
    Reclassification adjustment for accumulated unrealized
      loss on investments included in net loss, net of income
      tax benefit of $0                                                                                   6,579        6,579
    Currency translation adjustments, net of tax                                                         (1,523)      (1,523)
                                                                                                                   ---------
Comprehensive loss                                                                                                  (155,710)
                                                                ---------------    ------------    ------------    ---------
Balance at December 31, 2001                                    $            --    $   (476,860)   $     (5,513)   $ 605,616
                                                                ===============    ============    ============    =========



                                                                                                
                                                                Unrealized losses in investments   $     (1,615)
                                                                Cumulative translation adjustment        (3,898)
                                                                                                   ------------
                                                                                                   $     (5,513)
                                                                                                   ============


   The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                       10


                            ANAM SEMICONDUCTOR, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   ----------



                                                                       Thousands of U.S. Dollars
                                                                  -----------------------------------
                                                                    For the year ended December 31,
                                                                  -----------------------------------
                                                                     2001         2000         1999
                                                                  ---------    ---------    ---------
                                                                                   
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)                                                 $(162,173)   $ 450,641    $ 109,865

Adjustments to reconcile net income (loss)
    to net cash provided by operating
    activities:
      Depreciation and amortization                                 186,913      203,032      271,513
      Provision for severance benefits                                4,144       14,376       10,472
      Losses on foreign currency translation, net                     4,095       22,992       33,198
      Losses on disposal of investments, net                            370       12,824          601
      Impairment loss on investment                                   6,254          740        1,523
      Loss (gain) on disposal of property, plant and equipment        3,886           --       (5,842)
      Impairment loss on loan to affiliates                              --           --       22,646
      Guarantee obligation loss                                          --       49,797           --
      Loss (gain) on investment in equity method investees, net       1,396       (1,660)      31,787
      Gains on disposal of packaging and testing factories               --     (546,951)    (163,828)
      Decrease(increase) in deferred tax asset                       13,794      (19,674)     (53,212)
      Other, net                                                        (48)       1,717       (1,476)

Change in operating assets and liabilities,
    net of deconsolidation effects
      Decrease (increase) in trade accounts receivable                  (56)       5,993       24,825
      Decrease (increase) in other accounts receivable                6,542       (4,511)     (25,844)
      Decrease in due from affiliates                                 7,870        6,068      (43,339)
      Decrease (increase) in inventories                              4,354       (5,613)      (1,009)
      Decrease (increase) in other current assets                    (1,523)        (539)      14,471
      Increase (decrease) in trade accounts and notes payable       (11,052)     (33,327)      16,202
      Decrease in other accounts payable                             (5,199)     (79,969)      (1,123)
      Decrease in forward contract credit                                --      (15,364)     (20,943)
      Increase(decrease) in other current liabilities               (10,481)         467      (13,922)
      Payments of severance benefits                                 (3,422)      (6,623)      (6,492)
                                                                  ---------    ---------    ---------
           Net cash provided by operating activities              $  45,664    $  54,416    $ 200,073
                                                                  ---------    ---------    ---------


   The accompanying notes are an integral part of these consolidated financial
                                   statements.

Continued;



                                       11


                            ANAM SEMICONDUCTOR, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued;

                                   ----------



                                                                                         Thousands of U.S. Dollars
                                                                                    -----------------------------------
                                                                                      For the year ended December 31,
                                                                                    -----------------------------------
                                                                                       2001         2000         1999
                                                                                    ---------    ---------    ---------
                                                                                                     
CASH FLOWS FROM INVESTING ACTIVITIES:
    Decrease (increase) in bank deposits                                            $  67,544    $  28,031    $ (99,418)
    Decrease in short term loans                                                        1,580        2,684        7,788
    Acquisition of property, plant and equipment                                      (27,250)    (132,491)    (183,650)
    Proceeds from sale of property, plant and equipment of K1, K2 and K3                   --      950,000      624,791
    Payment of severance benefit for K1, K2 and K3                                         --      (56,510)          --
    Acquisition of investments                                                             (1)         (87)      (1,247)
    Disposal of investments                                                             1,787        9,247       41,425
    Decrease (increase) in non-current bank deposits                                      155           45         (204)
    Decrease (increase) in restricted cash                                             17,813        8,233      (41,132)
    Decrease in long-term receivables                                                   4,597        2,906        1,485
    Decrease in other assets                                                            3,208        1,712          128
    Deconsolidation of subsidiaries                                                        --           --       (6,279)
                                                                                    ---------    ---------    ---------
      Net cash provided by investing activities                                        69,433      813,770      343,687
                                                                                    ---------    ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Decrease in short-term borrowings                                                      --      (69,328)     (47,286)
    Repayment of current maturities of long-term debt                                 (31,607)     (19,797)     (10,545)
    Repayment of current maturities of long-term installment payable                   (9,844)        (719)          --
    Repayment of current maturities of long-term obligations under capital leases        (952)     (53,516)          --
    Borrowing of long-term debt                                                            --       22,347       48,054
    Repayment of long-term debt                                                            --     (661,481)    (484,448)
    Repayment of long-term obligations under capital leases                          (100,030)    (373,242)     (61,597)
    Payment of liability for loss contingencies                                       (17,891)    (102,929)          --
    Increase in other long-term liabilities                                                --           --          117
    Decrease in receivable from stockholders                                               --        8,790       54,299
    Issuance of common stock                                                               --      457,559       41,695
                                                                                    ---------    ---------    ---------
      Net cash used in financing activities                                          (160,324)    (792,316)    (459,711)
                                                                                    ---------    ---------    ---------

Effect of exchange rate changes on cash                                                (7,565)      (4,567)     (43,032)
                                                                                    ---------    ---------    ---------
INCREASE IN CASH AND CASH EQUIVALENTS                                                 (52,792)      71,303       41,017

CASH AND CASH EQUIVALENTS AT
    BEGINNING OF YEAR                                                                 127,772       56,469       15,452
                                                                                    ---------    ---------    ---------
CASH AND CASH EQUIVALENTS AT
    END OF YEAR                                                                     $  74,980    $ 127,772    $  56,469
                                                                                    =========    =========    =========

Supplemental disclosures of cash flow information:
    Cash paid during the year for:
      Interest                                                                      $  21,979    $  75,315    $ 197,716
                                                                                    =========    =========    =========
      Income taxes                                                                  $  17,533    $  12,561    $  15,658
                                                                                    =========    =========    =========
    Property, plant and equipment acquired through capital leases                   $   2,775    $ 210,896    $   1,116
                                                                                    =========    =========    =========
    Property, plant and equipment acquired through installment payable              $   3,546    $   9,188    $      --
                                                                                    =========    =========    =========
    Capital increase through debt conversion                                        $      --    $ 138,421    $ 101,731
                                                                                    =========    =========    =========


   The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                       12

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

1.    Organization and Nature of Business :

      The Controlling Company --

      Anam Semiconductor, Inc. (hereinafter referred to as "Anam" or "ASI"),
      incorporated in the Republic of Korea in August 1956, is now primarily a
      provider of semiconductor foundry services and a holding company for
      certain investments. Prior to their sale in 1999 and 2000 ASI also was a
      provider of semiconductor packaging and test services (See Note 3). In
      1998, ASI commenced operations to fabricate and sell non-memory
      semiconductor chips ("wafer fabrication").

      ASI changed its name from Anam Industrial Co., Ltd. to Anam Semiconductor,
      Inc. on March 20, 1998.

      ASI's semiconductor foundry facilities operate primarily for Amkor
      Technology, Inc. ("Amkor"), a United States affiliate. ASI manufactures
      semiconductor wafers and otherwise performs foundry services as a
      subcontractor to Amkor pursuant to a foundry agreement (the "Foundry
      Agreement") with Amkor. In addition, pursuant to the manufacturing and
      purchase agreements with Texas Instruments Incorporated ("TI"), a United
      States corporation, further discussed in Note 3, ASI fabricates wafers,
      which are also sold to Amkor.

      The businesses of ASI and Amkor have been inter-related for many years and
      have some common ownership by Mr. H.S. Kim and his family (the "Kim
      Family"). Mr. H.S. Kim currently serves as ASI's honorary chairman and his
      eldest son, Mr. James Kim, serves as Amkor's chairman and chief executive
      officer. Mr. James Kim also serves as a director of ASI and as the
      chairman of the Anam Group, consisting principally of companies in the
      Republic of Korea in the electronics and construction industries. As of
      December 31, 2001, Mr. H.S. Kim and his family owned approximately 1.7% of
      the outstanding common stock of Anam and 48% of the outstanding common
      stock of Amkor (See Note 3).

      Consolidated Subsidiary and Significant Equity Investees --

      A)    Major subsidiary and significant equity investees included in the
            accompanying financial statements by either consolidation or equity
            method of accounting at December 31, 2001 are as follows :



                                      Direct and
                                       Indirect          Method of
             Subsidiaries             Ownership(%)       Accounting
       --------------------------  -----------------  ------------------
                                                
       Anam Instruments                    20.8%      Equity
       Gre-tec                             46.9%      Equity
       Anam Telecom                        29.5%      Equity
       Anam USA                             100%      Consolidation


Continued;


                                       13

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

1.    Organization and Nature of Business, Continued;

      Consolidated Subsidiary and Significant Equity Investees, Continued --

      B) A summary of the subsidiaries referred to above is as follows :

      Anam Instruments Co., Ltd. (Anam Instruments) --

      Anam Instruments was established under the name of Handeung Co., Ltd. in
      February, 1989 to manufacture and sell electronic parts and equipment. In
      December 1990, it merged with Anam Horologe Co., Ltd., an affiliate
      engaged in manufacturing and selling watches. Concurrently, the company
      changed its name to Anam Instruments Co., Ltd. In October 1994, Anam
      Instruments obtained the optical products and semiconductor machinery
      business of ASI.

      Gre-tec Co., Ltd. (Gre-tec) --

      Gre-tec was incorporated under the name of Yu-Bong Industry Co., Ltd. in
      February 1986 and is engaged in treatment of industrial scrap in the
      Republic of Korea. The company changed its name to Anam Environment in
      January 1998 and to Gre-tec Co., Ltd. in December 2000, respectively.

      Anam Telecommunications Co., Ltd. (Anam Telecom) --

      Anam Telecom was established in August 1997, and is engaged in the
      telecommunication business.

      Anam USA, Inc. (Anam USA) --

      Anam USA was incorporated in Philadelphia, United States in September
      1994, to sell semiconductor products of Anam. As of December 31, 2001, its
      capital stock is US$0.1 of which ASI owned 100%.

      C) Changes in entities included in significant equity investees :

      As part of the reorganization, Anam Construction and Anam Electronics were
      placed under the control of the receivers appointed by the court. As a
      result of such court receivership, ASI currently does not have any board
      representation or any other involvement in management or operation of
      these entities. Given the lack of its ability to exercise any influence
      over the operating and financial policies of these entities, and given the
      fact that the carrying value of such investees have been written down to
      zero, ASI accounted for Anam Construction and Anam Electronics under the
      historical cost method of accounting in 2001 and 2000 (see Note 5).


                                       14

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies :

      The consolidated financial statements are presented in accordance with
      generally accepted accounting principles of the United States of America
      ("U.S. GAAP"). Significant accounting policies followed by ASI and its
      consolidated subsidiary (hereinafter collectively referred to as the
      "Company") in the preparation of the accompanying consolidated financial
      statements are summarized below.

      Principles of Consolidation --

      The consolidated financial statements include the accounts of ASI, its
      wholly-owned subsidiary and its equity investees. The equity method of
      accounting is used when ASI has both a 20% to 50% equity interest and the
      ability to exercise significant influcence over the investee. Investments
      in companies owned less than 20% are carried at cost or for which the
      Company does not exercise significant influence. All significant
      intercompany transactions and balances with consolidated subsidiary have
      been eliminated in consolidation.

      Unrealized profit arising from sales by the controlling company to the
      consolidated subsidiary or equity-method investees is fully eliminated.
      Unrealized profit, arising from sales by the consolidated subsidiary or
      equity-method investees to the controlling company or sales between
      consolidated subsidiary or equity-method investees, is eliminated to the
      extent of the investor ownership interest.

      Use of Estimates --

      The preparation of financial statements in accordance with U.S. GAAP
      requires management to make estimates and assumptions that affect the
      amounts reported in the consolidated financial statements and accompanying
      notes. The most significant estimates and assumptions relate to the
      allowance for uncollectable accounts receivables, loss contingencies,
      depreciation and impairment of long-lived assets. Actual results could
      differ from those estimates and may affect amounts reported in future
      periods. Management believes that the estimates are reasonable.

      Cash and Cash Equivalents --

      Cash and cash equivalents include cash on hand and all highly liquid
      investments with original maturities of three months or less at purchase.

Continued;


                                       15

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Restricted Cash --

      Restricted cash consists of current and non-current bank deposits, which
      are pledged in connection with various long-term debt (Note 14). Restriced
      cash at December 31, 2001 and 2000 was $9,132 and $26,999, respectively.

      Bank Deposits --

      Bank deposits consist of time deposits with banks and other financial
      institutions which have remaining maturities of more than three months at
      purchase. The Company classified these bank deposits with remaining
      maturities of one year or less at the balance sheet date as current and
      those with remaining maturities of more than one year as non-current.

      Available For Sale Securities --

      The Company accounts for those investments included in "Available for sale
      securities" under the provisions of Statement of Financial Accounting
      Standards No. 115, "Accounting for Certain Investments in Debt and Equity
      Securities" (SFAS 115). This statement requires investment securities to
      be divided into one of three categories: held-to maturity, available for
      sale and trading.

      The Company currently classifies all investments in debt and equity
      securities as available for sale securities. Individual securities with
      remaining contractual maturity of less than one year at the balance sheet
      date are included in current assets, and others are included as
      non-current assets. All available for sale securities are recorded at fair
      value. Unrealized holding gains and losses on securities available for
      sale are reported as a separate component of stockholders' equity, net of
      related deferred taxes. Realized gains and losses on the sale of
      securities available for sale are determined using the specific
      identification method and are charged to current operations.

      Management periodically evaluate whether declines in fair values below
      cost on each individual investment are or are not temporary. When decline
      in value is other than temporary, investment is written down to its
      estimated realizable value.

      Allowance for Doubtful Accounts --

      The Company provides an allowance for doubtful accounts receivable based
      on the aggregate estimated collectibility of accounts receivable. There is
      no allowance for doubtful accounts recorded as of December 31, 2001 and
      2000.

Continued;


                                       16

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Inventories --

      Inventories are stated at the lower of cost or market, with cost being
      determined by the weighted average method, except for materials
      in-transit, for which cost is determined using the specific identification
      method.

      Property, Plant and Equipment --

      Property, plant and equipment are recorded at cost less accumulated
      depreciation. Depreciation is computed using the straight-line method over
      the estimated useful lives of the assets as set forth below:



                                                                   Estimated Useful Lives
                                                                   ----------------------
                                                                
     Buildings                                                            25    years
     Structures                                                         10 - 25 years
     Machinery, equipment and vehicles                                   5 - 10 years
     Tools                                                                5     years
     Furniture and fixtures                                               5     years


      Routine maintenance and repairs are charged to expense as incurred.
      Expenditures which enhance the value or materially extend the useful lives
      of the related assets are capitalized.

      Interest expense incurred during the construction period of assets on
      funds borrowed to finance such construction is capitalized. Capitalized
      interest costs in 2001 and 2000 approximate $2,304 and $3,626,
      respectively.

      The Korean government provides subsidies to the Company for purchases of
      certain buildings and machinery. The Company recorded such purchases at
      full acquisition costs and the related subsidies as a contra-asset
      account. The contra-asset account is reduced using the straight-line
      method over the estimated useful lives of the related assets.

      Capital Lease Transactions --

      Assets leased under capital leases are recorded at cost as property, plant
      and equipment and depreciated using the straight-line method over their
      estimated useful lives. In addition, aggregate lease payments are recorded
      as obligations under capital leases, net of accrued interest as determined
      by total lease payments in excess of the cost of the leased machinery and
      equipment. Accrued interest is amortized over the lease period using the
      effective interest rate method.

Continued;


                                       17

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Discounts on Debentures --

      Discounts on debentures are amortized using the effective interest rate
      method over the repayment period of the debentures. The resulting
      amortization cost is included in interest expense.

      Accrued Severance Benefits --

      Employees and directors with one year or more of service are entitled to
      receive a lump-sum payment upon termination of their employment with the
      Company, based on their length of service and 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. The annual severance benefits expense charged to operations is
      calculated based on the net change in the accrued severance benefits
      payable at the balance sheet date, plus the actual payments made during
      the year.

      The contributions to national pension fund made under the National Pension
      Plan and the severance insurance deposit are deducted from accrued
      severance benefit liabilities. Contributed amounts are refunded from the
      National Pension Plan and the insurance company to employees on their
      retirement.

      Revenue Recognition --

      Sales terms of the Company is FOB - ASI's shipping point which means the
      title and risk of loss is transferred to the customer at the point of
      shipment. The Company recognizes revenue upon shipment of completed wafers
      to its customers.

      Discontinued Operations --

      The operating results of the packaging and testing businesses are shown
      separately as discontinued operations in the accompanying income statement
      due to the sale of the packaging and testing business in May 1999 and 2000
      (see Note 3). The results of the discontinued businesses do not reflect
      any interest expense or indirect expenses allocated by the Company.

Continued;


                                       18

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Research and Development Costs --

      Research and development costs are expensed as incurred.

      Advertising Costs --

      Advertising costs are charged to current period operations when incurred.
      Advertising expenses for 2001, 2000 and 1999 were $157, $414 and $236,
      respectively.

      Income Taxes --

      The Company accounts for income taxes under the provisions of Statement of
      Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income
      Taxes". SFAS 109 requires the recognition of deferred tax assets and
      liabilities created by temporary differences between the financial
      statement and tax bases of assets and liabilities. Deferred tax assets and
      liabilities are computed on such temporary differences, including
      available net operating loss carryforwards ("NOL") and tax credits, by
      applying enacted statutory tax rates applicable to the years when such
      differences are expected to be reversed. A valuation allowance is provided
      on deferred tax assets to the extent that it is more likely than not that
      such deferred tax assets will not be realized. Total income tax provision
      includes current tax expenses under applicable tax regulations and the
      change in the balance of deferred tax assets and liabilities.

      Investment tax credits are accounted for by the flow-through method
      whereby they reduce income taxes in the period the assets giving rise to
      such credits are placed in service. To the extent such credits are not
      currently utilized, deferred tax assets, subject to considerations about
      the need for a valuation allowance, are recognized for the carryforward
      amount.

      Earnings Per Share --

      The Company accounted for earnings per share in accordance with SFAS. 128,
      "Earnings Per Share" (SFAS 128). This statement specifies the computation,
      presentation and disclosure requirements for earnings per share. The
      Company has calculated earnings per share based on the basic and diluted
      per share calculation (see Note 19). Basic EPS is computed using the
      weighted average number of common shares outstanding for the period while
      diluted EPS is computed assuming conversion of all dilutive securities,
      such as convertible bonds. Both computation reflect the June 17, 1999
      reverse stock split in the number of shares.

Continued;


                                       19

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Remeasurement into US Dollar --

      The U.S. dollar is the functional currency for ASI because the dollar is
      the currency of reference for market pricing in the worldwide
      semiconductor industry and revenue from external sales in U.S. dollars
      exceeds revenues in any other currency. The functional currency used by
      ASI's equity investees is the Korean Won. The functional currency used by
      Anam USA is the U.S. dollar.

      For financial statement purposes, assets and liabilities of ASI are
      remeasured into U.S. dollars from books and records kept in Korean Won
      using the monetary/non-monetary method. Monetary assets and liabilities,
      such as cash, receivables, borrowings and other payables, are translated
      to U.S. dollars at end-of-period exchange rates. Non-monetary assets and
      liabilities, such as inventory, investments and fixed assets, are
      translated using historical exchange rates. Revenues and expenses are
      translated using average exchange rates for the period, except for items
      related to non-monetary assets and liabilities, which are translated using
      historical exchange rates. All translation gains and losses are included
      in the determination of income for the period in which exchange rates
      change.

      The financial position and results of operations of the Company's
      equity-method investees are measured using local currency as functional
      currency. The financial statements of these subsidiaries and equity-method
      investees are translated to U.S. dollars using the current exchange rate
      method. All the assets and liabilities are translated to U.S. dollars at
      end-of-period exchange rates. Capital accounts are translated using
      historical exchange rates. Revenues and expenses are translated using
      average exchange rates. Translation adjustments arising from differences
      in exchange rates from period to period are included in the cumulative
      translation adjustment account in stockholders' equity.

      The end of period exchange rates and average exchange rates for the period
      used to remeasure the assets, liabilities, revenues and expenses in
      accordance with the translation method stated above in 2001, 2000 and 1999
      were as follows:



                                         Korean Won to U.S. dollar
                 --------------------------------------------------------------------------
                     End of period exchange rates              Average exchange rates
                 ------------------------------------    ----------------------------------
                                                   
    2001                  W1,314.60 = US$ 1                      W1,291.00 = US$ 1
    2000                  W1,259.70 = US$ 1                      W1,127.03 = US$ 1
    1999                  W1,134.50 = US$ 1                      W1,189.30 = US$ 1


Continued;


                                       20

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Derivative Financial Instruments --

      The Company previously entered into foreign currency exchange contracts,
      including forward and swap contracts, to manage its exposure to changes in
      currency exchange rates, principally the exchange rate between Korean Won
      and the U.S. Dollar, due to certain transactions denominated in Korean
      Won. The transactions did not meet the requirements for hedge accounting
      for financial statement purposes under the previous guidance of SFAS 52
      "Foreign Currency Translation" and therefore the resulting realized and
      unrealized gains or losses, measured by quoted market prices, were
      recognized in income as the exchange rates changed. The net unrealized
      gains (losses) on these contracts were previously accrued on the balance
      sheet as forward contracts debits (credits). These contracts terminated
      during the year ended December 31, 2000. There were no such contracts as
      of December 31, 2000 or 2001.

      The Company previously entered into interest rate swap transactions to
      manage its exposure to the fluctuation of interest rates. Under SFAS 52,
      these transactions were accounted for on an accrual basis, in which cash
      settlement receivable or payable is recorded as an adjustment to interest
      income or expense. These contracts terminated during the year ended
      December 31, 2000. There were no such contracts as of December 31, 2000 or
      2001.

      Allowance for credit losses on loans receivable --

      The Company accounted for allowance for credit losses in accordance with
      SFAS 114, "Accounting by Creditors for Impairment of a Loan" (SFAS 114).
      Under SFAS 114, a loan is considered impaired, based on current
      information and events, if it is probable that the Company will be unable
      to collect the scheduled payments of principal or interest when due
      according to the contractual terms of the loan agreement. The measurement
      of impaired loans is generally based on the present value of expected
      future cash flows discounted at the historical effective interest rate,
      except that all collateral-dependent loans are measured for impairment
      based on the fair value of the collateral.

      When a loan is classified as impaired, no interest income is recognized.
      Any subsequent cash payment is applied to reduce the principal (Note 7 and
      8).

Continued;


                                       21

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Impairment of Long-Lived Assets --

      Management periodically evaluates the carrying value of long-lived assets,
      including intangibles, when events and circumstances warrant such a
      review. The carrying value of a long-lived asset is considered impaired
      when the anticipated undiscounted cash flows are less than the asset's
      carrying value. In that event, a loss is recognized based on the amount by
      which the carrying value exceeds the fair market value of the long-lived
      assets. Fair market value is determined primarily using the anticipated
      cash flows discounted at a rate commensurate with the risk involved.

      Risks and Uncertainties --

      The Company's business involves certain risks and uncertainties. Factors
      that could affect the Company's future operating results and the carrying
      value of assets such as property, plant and equipment include, but are not
      limited to, dependence on a cyclical semiconductor industry that is
      characterized by rapid technological changes, fluctuations in end-user
      demands, evolving industry standards, competitive pricing and declines in
      average selling prices, risks associated with assets, liabilities and
      transactions denominated in foreign currencies, and enforcement of
      intellectual property rights. Additionally, the market in which the
      Company operates is very competitive. Key elements of competition in the
      independent semiconductor foundry market include breadth of foundry
      offerings, time-to-market, technical competence, design services, quality,
      production yields, reliability of customer service and price. A
      substantial portion of the Company's revenues is derived from Foundry
      Services (see Note 3) provided to Amkor pursuant to the Foundry Agreement.
      In addition, the foundry services are based on technology licenses
      provided by Texas Instruments which could expire as early as December 31,
      2004. The Company also has significant debt obligations.

      Concentration of Credit Risk --

      Financial instruments, which potentially expose the Company to a
      concentration of credit risk, consist primarily of cash and cash
      equivalents, bank deposits, restricted cash, trade receivables, loans to
      affiliates and financial instruments with off-balance sheet risks.

      It is the Company's practice to place its cash and cash equivalents, bank
      deposits and restricted cash in various financial institutions located in
      Korea and the United States (U.S.) so as to limit the amount of credit
      exposure to any one financial institution. Deposits in U.S. banks may
      exceed the amount of insurance provided on such deposits by the Federal
      Deposit Insurance Corporation (the "FDIC"). The Company controls the
      credit risks associated with cash and cash equivalents, bank deposits and
      restricted cash by monitoring the financial standing of the related banks
      and financial institutions.

Continued;


                                       22

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Concentration of Credit Risk, Continued --

      ASI performs and sells its Foundry Services exclusively to Amkor pursuant
      to the Foundry Agreement. In 2001, 2000 and 1999, sales to Amkor accounted
      for substantially all of Anam's revenues and accounts receivables. Any
      reduction in purchases by Amkor would have an adverse impact on ASI's
      financial position, results of operations and cash flows.

      The loans to affiliates are uncollaterized and collection is subject to
      the operations of those affiliates. Management believes they have provided
      adequate allowance against these loans to reduce them to their net
      realizeable value.

      The Company controls the credit risks associated with financial
      instruments through credit approvals, investment limits and centralized
      monitoring procedures but does not normally require collateral or other
      security from the counterparties. No outstanding derivative transactions
      of the Company existed at December 31, 2001 and 2000.

      Reclassifications --

      Certain amounts in the 2000 and 1999 financial statements have been
      reclassified to conform to the 2001 presentation. These reclassifications
      have had no effect on previously reported net income or retained earnings.

      Restatement --

      Diluted earnings per share for the years ended December 31, 2000 and 1999
      have been revised to reflect a correction in the dilution calculation. The
      revision did not impact net income, stockholders' equity or cash flows.
      The previously reported diluted earnings per share from discontinued
      operations for 2000 of 5.18 has been revised to 5.29. The previously
      reported diluted earnings per share from discontinued operations for 1999
      of 9.24 has been revised to 9.58. The previously reported diluted net
      income per share for 2000 of 4.94 has been revised to 5.07. The previously
      reported diluted net income per share for 1999 of 3.42 has been revised to
      3.76. Please refer to the changes in Note 19 and in the Consolidated
      Statements of Operations.

Continued;


                                       23

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

2.    Summary of Significant Accounting and Financial Reporting Policies,
      Continued;

      Recent Accounting Pronouncements --

      In July 2001, the Financial Accounting Standards Board ("FASB") issued
      Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
      Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets".
      These standards change the accounting for business combinations by, among
      other things, prohibiting the prospective use of pooling-of-interests
      accounting and requiring companies to stop amortizing goodwill and certain
      intangible assets with an indefinite useful life created by business
      combinations accounted for using the purchase method of accounting.
      Instead, goodwill and intangible assets deemed to have an indefinite
      useful life would be subject to an annual review for impairment.

      For existing acquisitions, the provisions of the new standards will be
      effective for us in the first quarter of 2002. ASI will adopt this
      statement during the first quarter of 2002 and believe that the impact of
      adoption on the financial statements will not be material.

      In June 2001, the FASB issued SFAS No. 143 "Accounting for Asset
      Retirement Obligations". This statement establishes standards for
      accounting for obligations associated with the retirement of tangible
      long-lived assets. The standard is required to be adopted by us beginning
      on January 1, 2003. In August 2001, the FASB issued SFAS No. 144,
      "Accounting for the Impairment or Disposal of Long-Lived Assets". This
      statement addresses financial accounting and reporting for the impairment
      and disposal of long-lived assets. This standard is required to be adopted
      by us beginning on January 1, 2002. We are currently in the process of
      evaluating the effect the adoption of these standards will have on our
      consolidated results of operations, financial position and cash flows, if
      any.


                                       24

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

3.    Relationship with Amkor:

      The businesses of ASI and Amkor have been inter-related for many years by
      virtue of the Foundry Agreements (see Note 1), certain common ownership
      and management, financial relationships, coordination of product and
      operating plans and shared intellectual property rights.

      In accordance with the terms and condition of the Workout Program
      discussed in Note 5, in 2000 and 1999, Amkor made $500,694 of capital
      contribution to ASI in exchange for equity shares of ASI. As a result,
      Amkor owns 42% of the outstanding stock of ASI at December 31, 2001 and
      2000.

      On May 17, 1999, the Company sold to Amkor all the assets of the Company's
      packaging and test facility located in Kwangju city, the Republic of Korea
      ("K4"), excluding cash and cash equivalents, notes and accounts
      receivables, intercompany accounts and existing claims against third
      parties, in accordance with an asset purchase agreement signed on December
      30, 1998 and approved by its shareholders on February 3, 1999. The sale
      price of K4 is $575,000 in cash, plus the transfer of up to $7,000 of
      employee benefit liabilities. The sale of K4 resulted in a gain of
      $163,828.

      On May 1, 2000, the Company sold to Amkor all of the remaining operating
      assets related to the packaging and testing business excluding K2 land in
      accordance with an asset purchase agreement approved by its shareholders
      on April 14, 2000. The sale price of K1, K2 and K3 was for $950,000 in
      cash. The sale of K1, K2 and K3 resulted in a gain of $546,951.

      In 2001, 2000 and 1999, approximately 99.9%, 97.0% and 93.3%,
      respectively, of ASI's revenues was derived from sales to Amkor. By the
      terms of a long-standing agreement, Amkor has been responsible for
      marketing and selling ASI's semiconductor foundry services, except to
      customers in Korea to whom ASI has historically sold such services
      directly. ASI has worked closely with Amkor in developing new technologies
      and products.

      Effective January 1, 1998, ASI entered into the five-year Foundry
      Agreement with Amkor giving Amkor the exclusive right to market and sell
      all of the wafer output of ASI's new wafer foundry, both of which have
      negotiable pricing terms, taking into consideration factors such as
      changes in the semiconductor market, forecasted demand, product mix,
      capacity utilization and fluctuations in exchange rates as well as the
      mutual long-term strategic interest of ASI and Amkor. Amkor, in return, is
      responsible for sales of Foundry Services and is obligated to actively and
      diligently market the Foundry Services to potential and existing
      customers.

Continued;


                                       25

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

3.    Relationship with Amkor, Continued;

      The agreement is cancelable by either party upon five years prior written
      notice at any time after the fifth anniversary of the effective date. The
      Company's business, financial condition and operating results have been
      and will continue to be significantly dependent on the ability of Amkor to
      effectively market ASI's services. The termination of ASI's relationship
      with Amkor for any reason, or any material adverse change in Amkor's
      business would have a material adverse effect on ASI's business, financial
      condition and results of operations.

      Under the 1998 Manufacturing and Purchase Agreement between Amkor and
      Texas Instruments(as amended on July 1, 2000), Texas Instruments agreed to
      purchase from us at least 40%, and under certain circumstances had the
      right to purchase 70%, of ASI's wafer fabrication facility's capacity. As
      a result of the weakness in the semiconductor industry, Texas Instruments'
      demand for the output of ASI's wafer fabrication facility decreased
      significantly in 2001. and they failed to meet minimum purchase
      obligations. Texas Instruments made certain concessions to Amkor to
      partially mitigate this shortfall in demand.

      The Manufacturing and Purchase Agreement between Texas Instruments and
      Amkor was amended again on December 31, 2001. Pursuant to the amended
      agreement, Amkor agreed to modify Texas Instruments' purchase obligation
      to 40% of ASI's wafer fabrication facility's capacity in the quarter
      ending March 31, 2002, 30% of such capacity in the quarter ending June 30,
      2002, and 20% of such capacity in each subsequent quarter. Texas
      Instruments has agreed to increase its purchase to at least 40% of such
      capacity if a new technical assistance agreement covering advanced wafer
      fabrication technology is entered into among ASI, Amkor and Texas
      Instruments prior to December 31, 2002. In addition, the amended
      Manufacturing and Purchase Agreement also transfers high voltage Linear
      BiCMOS technology to ASI's wafer fabrication facility. It is anticipated
      that this linear BiCMOS process technology will be used primarily for
      customers other than Texas Instruments.

      The Manufacturing and Purchasing Agreement and related technical
      assistance agreements terminate on December 31, 2007, unless they have
      been previously terminated. The agreements may be terminated upon, among
      other things: (1) the consent of ASI, Texas Instruments and Amkor, (2) a
      material breach by ASI, Texas Instruments or Amkor, (3) the failure of ASI
      or Amkor to protect Texas Instruments' intellectual property; or (4) the
      parties' failures to enter into a new technical assistance agreement by
      December 31, 2002.

Continued;


                                       26

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

3.    Relationship with Amkor, Continued;

      If the parties fail to enter into a new technical assistance agreement by
      December 31, 2002, then any party may give the other notice of
      termination. This notice will, among other things, result in the amended
      Manufacturing and Purchasing Agreement and the technology assistance
      agreements terminating two years after such notice. During such two-year
      period, Texas Instruments will only be obligated to purchase a minimum of
      20% of the ASI wafer fabrication facility's capacity. In addition, even if
      the parties were to enter into a new technical assistance agreement, that
      agreement would provide that if ASI is not able to enter into production
      using the advanced wafer fabrication technology licensed under that
      agreement, the Manufacturing and Purchasing Agreement is terminable by any
      party as discussed above over a two year period beginning on December 31,
      2002.

      In order for the Manufacturing and Purchasing Agreement and the technology
      assistance agreements to continue until December 31, 2007, Amkor, ASI and
      Texas Instruments would have to enter into a new technology assistance
      agreement by December 31, 2002. However, the advanced wafer fabrication
      technology that would be licensed under this agreement would require ASI
      either to (i) invest in excess of $400 million to refurbish its existing
      manufacturing facility, requiring the shutdown of part or all of its
      existing facility during the period of refurbishment, or (ii) obtain
      access to a new or existing manufacturing facility owned by a third party
      that could support the advanced technology. A third option for ASI would
      be to build and equip a new manufacturing facility, but this option would
      require substantially greater capital investment by ASI than the other
      options. It is not certain whether Amkor and ASI will be able to negotiate
      successfully a new technical assistance agreements with Texas Instruments.
      Moreover, it will be extremely difficult for ASI to finance, acquire and
      equip the necessary manufacturing facility to deploy the advanced wafer
      fabrication technology that would be transferred by Texas Instruments. If
      Texas Instruments were to significantly reduce or terminate its purchase
      of ASI's wafer fabrication services, ASI's wafer fabrication business
      would be seriously harmed. However, we have maintained a strong
      relationship with both Amkor and Texas Instruments and the Company
      currently expects that in the event new manufacturing and technology
      assistance agreements could not be entered into by December 31, 2002,
      Texas Instruments and Amkor would negotiate a new relationship with the
      Company and continue to use the Company's wafer fabrication facility for a
      significant portion of their outsourced wafer fabrication needs.

      Under the existing technical assistance agreements between Texas
      Instruments and ASI, ASI has a license to use wafer fabrication-related TI
      Trade Secrets for non-Texas Instruments' products. In the event that the
      Manufacturing and Purchase Agreement is terminated, this license will also
      terminate. At such time, it would be necessary for ASI to negotiate a new
      license agreement with Texas Instruments relating to its trade secrets, or
      ASI would not be able to continue its wafer fabrication operations as
      currently practiced. This would have the result of shutting down the wafer
      fabrications business of ASI and Amkor unless and until alternative
      technology arrangements could be made and implemented at ASI's wafer
      manufacturing facility.


                                       27

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

4.    Unstable Economic Environment:

      Beginning in 1997, Korea and other countries in the Asia Pacific region
      experienced a severe contraction in substantially all aspects of their
      economies. This situation is commonly referred to as the 1997 Asian
      financial crisis. In response to this situation, the Korean government and
      the private sector began implementing structural reforms to historical
      business practices.

      The Korean economy continues to experience difficulties, particularly in
      the areas of restructuring private enterprises and reforming the banking
      industry. The Korean government continues to apply pressure to Korean
      companies to restructure into more efficient and profitable firms. The
      banking industry is currently undergoing consolidation and uncertainty
      exists with regard to the continued availability of financing. The Company
      may be either directly or indirectly affected by the situation described
      above.


                                       28

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

5.    Workout Program:

      The Company has traditionally operated with a significant amount of debt
      relative to its equity. In addition, the Company has guaranteed certain
      debt obligations of equity investees and affiliated companies, including
      Anam Engineering and Construction Co., Ltd. ("Anam Construction"), Anam
      Electronics Co., Ltd. ("Anam Electronics") and Gre-tec which face serious
      financial difficulties.

      In response to this situation, management has undertaken certain measures
      it considers appropriate, including: (1) disposing of the packaging and
      test facilities (see Note 3); (2) placing Anam Construction into corporate
      reorganization under the Korean Corporate Reorganization Act; and (3)
      enlisting, on October 23, 1998 ASI into the "Workout Program", a financial
      restructuring program supervised by the Korean Financial Supervisory
      Commission ("FSC"). The Workout Program is the result of an accord among
      Korean financial institutions to assist in the restructuring of Korean
      business enterprises. This process involves negotiations between the
      companies and the creditors committee represented by banks and other
      financial institutions providing financing to ASI and does not involve the
      judicial system. The Workout Program also allows ASI to resume its
      operations uninterrupted and does not impact debt outstanding with trade
      creditors. Anam Electronics and Gre-tec also applied for the Workout
      Program in October 1998.

      On February 23, 1999, the following basic conditions and terms of ASI's
      Workout Program were agreed to and approved by its creditors committee :
      (1) five-year extension on repayment of loans and capital leases; (2)
      reduction of bank loan interest rates to Korean prime rate; (3) conversion
      of certain outstanding bank loans of ASI to equity shares and convertible
      bonds approximating $102,275 and $90,400, respectively; and (4) five-year
      suspension of creditors' right to demand performance on loan guarantees
      made by ASI on behalf of its affiliates. In order for the initial
      conversion of debt to take place in accordance with the terms of the
      Workout Program, ASI underwent a series of corporate actions, including a
      reverse stock split, to bring the fair market value of its equity shares
      to a price at least equal to the par value of such shares. The conversion
      of ASI debt by the creditor financial institutions would coincide with
      each installment of Amkor's equity investment in ASI as described below.
      The Workout Program contained a provision for the entitlement of the
      creditor financial institutions to vote the ASI shares owned by Mr. James
      Kim and his family. The Company did not recognize any gain or loss as a
      result of the Workout Program.

Continued;


                                       29

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                  ------------

5.    Workout Program, Continued;

      On May 13, 1999, ASI's Workout Program became effective upon the signing
      of a Memorandum of Understanding, which detailed the conditions and terms
      between ASI and the creditors committee. In accordance with the terms and
      conditions of the Workout Program, in 2000 and 1999, Amkor made $458,999
      and $41,695, respectively, of capital contribution to ASI in exchange for
      equity shares of ASI. ASI paid $4,603 and $102,929 to creditors for
      guarantee obligations in 2001 and 2000, respectively, in order to
      eliminate all guarantee obligations provided for Anam Construction and
      Anam Electronics (Note 20). On July 18, 2000, the creditors committee
      released ASI from the Workout Program due to fulfillment of the terms of
      the Workout Agreement.

      As of December 31, 1999, ASI owned 49.00% of Anam Construction. Anam
      Construction filed for corporate reorganization under the Korean Corporate
      Reorganization Act on October 24, 1998. Anam Construction's reorganization
      plan was completed and approved by the court on March 20, 2000. As part of
      the reorganization, Anam Construction was placed under the control of a
      receiver. In 2000, according to Anam Construction's reorganization plan,
      all common shares of ASI were reduced without consideration and a portion
      of ASI's loans to Anam Construction approximating $65,916 converted to
      preferred stock of Anam Construction in exchange for 1,472,705 non-voting
      preferred shares at (won)U50,000 per share by August 1, 2000. After this
      conversion, ASI currently owns 25.0% of Anam Construction's shares, which
      is recorded at $0 in accompanying financial statements. (see Note 20).

      Anam Electronics' application for Workout Program was not accepted by the
      creditors committee. As a result, on March 18, 1999, Anam Electronics
      filed an application for corporate reorganization under the Korean
      Corporate Reorganization Act. Anam Electronics' reorganization plan was
      completed and approved by the court on February 7, 2000. In 2000,
      according to the reorganization plan of Anam Electronics, a portion of
      ASI's loans to Anam Electronics approximating $29,004 converted to common
      stock of Anam Electronic in exchange for 2,026,640 non-voting common
      shares at (won)U16,000 per share by June 1, 2000, all of which were sold
      in 2001 (see Note 20).

      Gre-tec's application for Workout Program was accepted by its creditors
      committee on February 23, 1999 and the creditors committee released
      Gre-tec from Workout Program on August 29, 2000. A portion of ASI's loans
      to Gre-tec approximating $7,654 converted to common stock of Gre-tec in
      exchange for 212,000 common shares at (won)U47,100 per share on May 3,
      2001. ASI records its investment in Gre-tec at $0 in the accompanying
      financial statements. Gre-tec became insolvent and filed an application
      for corporate reorganization under the Korean Corporate Reorganization Act
      on December 13, 2001. Gre-tec is preparing its reorganization plan, which
      is expected to be finalized in early 2003 (see Note 20).


                                       30

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

6.    Inventories :

      Inventories at December 31, 2001 and 2000 comprise the following:



                                                               December 31,
                                                         -----------------------
                                                           2001           2000
                                                         --------        -------
                                                                   
     Finished products and merchandise                   $ 14,417        $ 2,422
     Semi-finished products
       and work in process                                 24,598         10,945
     Raw materials and supplies                             7,812         18,754
     Materials in transit                                     514          9,465
                                                         --------        -------
                                                           47,341         41,586
     Reserve for the lower of cost or market             $(10,109)            --
                                                         --------        -------
                                                         $ 37,232        $41,586
                                                         ========        =======


7.    Short-term Loans to Affiliates :

      Loan receivables at December 31, 2001 and 2000 comprise of the following :



                                                            December 31,
                                                      -------------------------
                                                         2001            2000
                                                      ---------       ---------
                                                                
     Loans to affiliated companies
       Anam Construction                              $  17,011       $  17,752
       Anam Electronics                                  99,013         103,328
       Gre-tec                                            7,156          12,145
       Anam Telecom                                       2,977           1,009
       New-line Finance(former, Anam Finance)                --           1,619
                                                      ---------       ---------
                                                        126,157         135,853
                                                      ---------       ---------

     Allowance for credit loss (Note 8)                (126,157)       (134,234)
                                                      ---------       ---------
                                                      $      --       $   1,619
                                                      =========       =========


      The loans to affiliated companies have maturity periods of less than one
      year and are uncollateralized.


                                       31

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

8.    Loan Impairment :

      The Company provided loans to several affiliated companies, which
      currently face financial difficulties. Consequently, the Company assessed
      the collectibility of these loans in accordance with Statement of
      Financial Accounting Standards No. 114, "Accounting by Creditors for
      Impairment of a Loan", and determined that the Company would not be able
      to collect the scheduled payments of principal or interest when due
      according to the contractual terms of the loan agreement on certain loans.

      The amount of impaired loans and related allowance for credit loss on
      loans receivable are summarized below :



                                                                   December 31,
                                                             -------------------------
                                                                2001            2000
                                                             ---------       ---------
                                                                       
          Impaired loans, gross                              $ 126,157       $ 134,234
          Allowance for credit loss on loans receivable      $(126,157)       (134,234)
                                                             ---------       ---------
          Impaired loans, net                                $      --       $      --
                                                             =========       =========


      For the year ended December 31, 2001 and 2000, the average recorded
      investment in impaired loans was approximately $130,196 and $222,673,
      respectively.

      No interest income was recognized on impaired loans for the year ended
      December 31, 2001 and 2000. Had these loans performed in accordance with
      their original terms, interest income of $10,119 and $17,306 would have
      been recorded in 2001 and 2000, respectively.

      The changes in the allowance for credit loss on loans receivable are
      summarized below:



                                                                  2001            2000
                                                               ---------       ---------
                                                                         
    Beginning balance                                          $ 134,234       $ 311,112
    Transfer of loans receivable to investment securities         (7,654)        (94,920)
    Write-off                                                         --        (108,680)
    Additions due to payment of guarantee obligation               5,238          36,128
    Effect of changes in exchange rates                           (5,661)         (9,406)
                                                               ---------       ---------
    Ending balance                                             $ 126,157       $ 134,234
                                                               =========       =========


      As discussed in Note 5, in 2001 and 2000, a portion of ASI's loans
      receivable were converted to investment securities as follows:



                                                                  2001            2000
                                                               ---------       ---------
                                                                         
    Anam Construction                                          $      --       $  65,916
    Anam Electronics                                                  --          29,004
    Gre-tec                                                        7,654              --
                                                               ---------       ---------
                                                               $   7,654       $  94,920
                                                               =========       =========



                                       32

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

9.    Investment in Available For Sale Securities :

      The Company's investment in available for sale securities are summarized
      below :



                                                                              December 31, 2001
                                                  ------------------------------------------------------------------------------
                                                     Amortized           Unrealized           Unrealized            Estimated
                                                       Cost             Holding Gains       Holding Losses         Fair Value
                                                  ---------------      ---------------      ---------------      ---------------
                                                                                                     
     Bonds issued by Korean government            $            70      $            --      $            --      $            70
     Bonds issued by Korean local government                    9                   --                   --                    9
     Equity Securities                                     17,939                   44                1,527               16,456
                                                  ---------------      ---------------      ---------------      ---------------
     Total                                        $        18,018      $            44      $         1,527      $        16,535
                                                  ===============      ===============      ===============      ===============




                                                                              December 31, 2000
                                                  ------------------------------------------------------------------------------
                                                     Amortized           Unrealized           Unrealized            Estimated
                                                       Cost             Holding Gains       Holding Losses         Fair Value
                                                  ---------------      ---------------      ---------------      ---------------
                                                                                                     
     Bonds issued by Korean government            $            73      $            --      $            --      $            73
     Bonds issued by Korean local government                    9                   --                   --                    9
     Equity Securities                                     24,942                   --                9,221               15,721
                                                  ---------------      ---------------      ---------------      ---------------
     Total                                        $        25,024      $            --      $         9,221      $        15,803
                                                  ===============      ===============      ===============      ===============


      The maturity of the bonds issued by the government and the bonds issued by
      local government as of December 31, 2001 ranged from two years to six
      years.

      The gross realized gains from the sale of available for sale securities in
      the year ended December 31, 2001, 2000 and 1999 were $40, $710 and $0,
      respectively. The gross realized losses from the sale of available for
      sale securities in 2001, 2000 and 1999 were $410, $6,560 and $891,
      respectively.

      At December 31, 2001 and 2000, equity securities with total carrying
      amount of $2,357 and $1,481, respectively, were pledged as collateral for
      issuing non-guaranteed debentures and capital lease obligation,
      respectively (see Notes 12 and 14).

      At December 31, 2001, 2000 and 1999, respectively, the net book value of
      certain equity investment is below acquisition cost and is not expected to
      be recovered in the near future. Accordingly, an impairment loss of
      $6,254, $740 and $1,523, respectively were included in non-operating
      expenses for the other-than-temporary impairment of such investment.

      Management believes that there are no other than temporary declines at
      this time.


                                       33

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

10.   Investments in Affiliated Companies :

      The Company's investments in affiliated companies are summarized below:



                                                               December 31, 2001
                          -----------------------------------------------------------------------------------------------
                            Percentage                             Accumulated         Accumulated
                           of Ownership         Amortized         Comprehensive         Equity in            Estimated
                               (%)                 Cost           Income (loss)        gain (loss)           Fair Value
                          --------------      --------------      --------------      --------------       --------------
                                                                                            
     Anam Instrument               20.80      $        8,905      $       (4,032)     $        5,597       $       10,470
     Gre-tec                       46.90                  --                  --                  --                   --
     Anam Telecom                  29.51               1,701                  --              (1,701)                  --
                                              --------------      --------------      --------------       --------------
                                              $       10,606      $       (4,032)     $        3,896       $       10,470
                                              ==============      ==============      ==============       ==============




                                                               December 31, 2000
                          -----------------------------------------------------------------------------------------------
                            Percentage                             Accumulated          Accumulated
                           of Ownership         Amortized         Comprehensive          Equity in           Estimated
                               (%)                 Cost           Income (loss)         gain (loss)          Fair Value
                          --------------      --------------      --------------       --------------      --------------
                                                                                            
     Anam Instrument               20.80      $        8,905      $       (2,755)      $        5,292      $       11,442
                                              ==============      ==============       ==============      ==============


      The gross realized loss from the sale of investment in affiliated
      companies in the year ended December 31, 2001, 2000 and 1999 were $0,
      $6,974 and $0, respectively. The gross realized gain from the sale of
      investment in affiliated companies in the year ended December 31, 2001,
      2000 and 1999 were $0, $0 and $290, respectively.


                                       34

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

11.   Summary Financial Data on Significant Equity Investees :

      Additional information regarding the Company's equity investees is as
      below :



                                                              As of December 31, 2001
                             ---------------------------------------------------------------------------------------------
                               Current           Non-current           Current           Non-current          Net Equity
                                Assets              Assets           Liabilities         Liabilities          (deficit)
                            --------------      --------------      --------------      --------------      --------------
                                                                                             
      Anam Instruments      $       59,459      $       25,279      $       22,503      $       13,766      $       48,469
      Gre-tec                        7,752              14,460               4,643              18,996              (1,427)
      Anam Telecom                   1,841               6,120               1,410               6,618                 (67)




                                                   For the Year ended December 31, 2001
                             ----------------------------------------------------------------------------------
                                   Gross             Gross             Income (Loss) from        Net Income
                                  Revenue         Profit(Loss)             operations              (Loss)
                             ----------------  -----------------   ------------------------   -----------------
                                                                                  
      Anam Instruments           $  94,690         $    9,469               $      417            $    1,123
      Gre-tec                        9,267              3,505                    2,124                  (703)
      Anam Telecom                   1,810             (2,713)                  (4,199)               (8,693)




                                                          As of December 31, 2000
                             ----------------------------------------------------------------------------------
                                 Current        Non-current       Current        Non-current
                                 Assets            Assets       Liabilities      Liabilities       Net Equity
                             --------------   ---------------  -------------   ----------------  --------------
                                                                                  
     Anam Instruments           $ 71,298         $  21,292       $ 23,287          $  14,558        $ 54,745




                                                     For the Year ended December 31, 2000
                                 ------------------------------------------------------------------------------
                                     Gross                                Income from
                                    Revenue         Gross Profit          operations              Net Income
                                 ---------------  ----------------   ----------------------   -----------------
                                                                                  
     Anam Instruments               $ 143,800        $   19,756           $     3,595              $   4,524




                                                     For the Year ended December 31, 1999
                                 ------------------------------------------------------------------------------
                                       Gross                          Income (Loss) from         Net Income
                                      Revenue       Gross Profit          operations               (Loss)
                                 ---------------  ----------------   ----------------------   -----------------
                                                                                  
     Anam Construction*             $  63,621       $  (14,776)          $   (66,691)            $  (66,691)
     Anam Insturments                 169,051            26,601                11,135                 7,487
     Acqutek                           57,040             3,646               (7,978)                (4,377)
     New-line Finance
       (former, Anam Finance)           9,980           (8,323)               (8,343)                (8,343)
     Anam Telecom                       1,543           (3,278)               (8,220)                (8,220)


      * Gre-tec's figures are included in Anam Construction.


                                       35

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

12.   Property, Plant and Equipment :

      Property, plant and equipment at December 31, 2001 and 2000 comprise of
      the following :



                                                      December 31,
                                              -----------------------------
                                                  2001              2000
                                              -----------       -----------
                                                          
     Costs
       Land                                   $    29,854       $    29,820
       Buildings and Structures                    94,964            93,632
       Machinery, equipment and vehicles        1,068,836         1,012,939
       Tools, furniture and fixtures               14,567             9,891
       Construction in progress                        --               610
       Machinery in transit                         4,373            38,349
                                              -----------       -----------
                                                1,212,594         1,185,241
     Accumulated depreciation                    (565,707)         (390,540)
                                              -----------       -----------
                                                  646,887           794,701

     Governmental subsidies                          (589)             (851)
                                              -----------       -----------
     Net Property, Plant and Equipment        $   646,298       $   793,850
                                              ===========       ===========


      Pledged Property, Plant and Equipment --

      A substantial portion of the Company's property, plant and equipment is
      pledged as collateral for various loans from banks, up to a maximum amount
      of $295,989 and $338,512, at December 31, 2001 and 2000, respectively (see
      Note 14).

Continued;


                                       36

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

12.   Property, Plant and Equipment, Continued;

      Capital Leases --

      The Company has various facilities and equipment held under capital lease
      agreements.

      Capital lease assets included in the above categories are further
      described below :



                                                           December 31,
                                                    ---------------------------
                                                       2001              2000
                                                    ---------         ---------
                                                                
          Machinery and equipment                   $ 833,856         $ 831,081
          Accumulated depreciation                   (468,905)         (323,342)
                                                    ---------         ---------
          Capitalized Leases, net                   $ 364,951         $ 507,739
                                                    =========         =========


      Future minimum lease payments under noncancelable capital leases as of
      December 31, 2001 are as follows :



          For years ended December 31,                              Capital Leases
                                                                    --------------
                                                                 
          2002                                                        $ 103,736
          2003                                                           41,046
          2004                                                           21,465
                                                                      ---------
          Total minimum lease payments                                  166,247
          Less amount representing interest                             (10,409)
                                                                      ---------
          Present value of minimum lease                                155,838
            payments under capital leases
          Less:  portion due within one year                            (97,042)
                                                                      ---------
                                                                      $  58,796
                                                                      =========


      Impairment of Property, Plant and Equipment --

      The Company recognized an impairment loss of $273,937 in accordance with
      SFAS 121 related to assets held and used in the wafer fabrication factory
      (the "FAB") in Bucheon City, Republic of Korea in 1998. The amounts in
      property, plant and equipment above reflect the write-off of assets based
      upon the present value of expected future cash flows.

Continued;


                                       37

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

12.   Property, Plant and Equipment, Continued;

      Impairment of Property, Plant and Equipment, Continued --

      The remaining recorded value of the FAB after the impairment adjustment at
      December 31, 2001 and 2000 is as follows:



                                                            2001
                                        --------------------------------------------
                                                       Machinery and
                                         Building        equipment           Total
                                        ----------     -------------      ----------
                                                                 
          Acquisition cost              $  189,899       $  320,825       $  510,724
          Impairment                      (120,863)        (153,074)        (273,937)
          Accumulated depreciation         (13,865)         (73,910)         (87,775)
                                        ----------       ----------       ----------
          Net book value                $   55,171       $   93,841       $  149,012
                                        ==========       ==========       ==========




                                                           2000
                                        --------------------------------------------
                                                       Machinery and
                                         Building        equipment           Total
                                        ----------     -------------      ----------
                                                                 
          Acquisition cost              $  189,899       $  320,825       $  510,724
          Impairment                      (120,863)        (153,074)        (273,937)
          Accumulated depreciation         (11,800)         (58,918)         (70,718)
                                        ----------       ----------       ----------
          Net book value                $   57,236       $  108,833       $  166,069
                                        ==========       ==========       ==========



                                       38

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

13.   Accrued Severance Benefits :

      Accrued severance benefits at December 31, 2001 and 2000 are as follows :



                                                        2001          2000
                                                      --------      --------
                                                              
     Beginning balance                                $  6,721      $ 54,568
     Decrease resulting from sales of divisions             --       (56,510)
     Provisions                                          4,144        14,376
     Severance payments                                 (4,462)       (5,713)
                                                      --------      --------
                                                         6,403         6,721
      Balance of payments remaining with
        National Pension Fund                             (299)         (413)
      Balance of payments remaining with
        Severance insurance deposit                     (5,395)       (6,308)
                                                      --------      --------
                                                      $    709      $     --
                                                      ========      ========


      The severance benefits are funded approximately 84.3% at December 31,
      2001, through severance insurance deposit for payment of severance
      benefits, and the account is deducted from accrued severance benefit
      liabilities. The beneficiaries of the severance insurance deposit are the
      Company's employees.


                                       39

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

14.   Borrowings and Installment Payable :

      Long-term debt and long-term installment payable excluding capital lease
      obligations, at December 31, 2001 and 2000 comprise the following :



                                                                                       Carrying Value
                                                                                       at December 31,
                                                         Annual Interest Rate      -----------------------
                                                       (%) at December 31, 2001      2001           2000
                                                       ------------------------    --------       --------
                                                                                         
      Won Currency Loans:
        Choheung Bank due 2006                               5.00 - 10.50          $ 31,449       $ 33,046
        Shinhan Bank due 2005                                   10.25                19,057         19,887
        Korea Exchange Bank due 2005                            10.25                 7,014          7,320
        Others                                                  10.45                 6,080          6,345
                                                                                   --------       --------
                                                                                     63,600         66,598
                Less : current portion                                               (5,529)          (254)
                                                                                   --------       --------
                                                                                     58,071         66,344
                                                                                   --------       --------
      Debentures in Won currency:
        Guaranteed, payable through 2002                     10.00 - 10.20           15,214         15,877
        Non-guaranteed, payable through 2006                 9.10 - 12.00             1,142          9,130
                                                                                   --------       --------
                                                                                     16,356         25,007
                Less : discounts on debentures                                           (7)          (641)
                       Current portion                                              (15,207)        (7,304)
                                                                                   --------       --------
                                                                                      1,142         17,062
                                                                                   --------       --------
      Convertible Bonds:
        US Dollar, payable                                                               --         24,904
                Less : current portion                                                   --        (24,904)
                                                                                   --------       --------
                 Total long-term debt                                              $ 59,213       $ 83,406
                                                                                   ========       ========

      Long-term Installment Payable
        Installment payable in Japanese Yen                                        $  2,075       $  9,342
        Installment payable in Won currency                                           1,207          1,618
                                                                                   --------       --------
                                                                                      3,282         10,960
                Less : discounts on installment payable                                 (99)          (221)
                       Current portion                                               (2,719)        (9,844)
                                                                                   --------       --------
                                                                                   $    464       $    895
                                                                                   ========       ========


Continued;


                                       40

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

14. Borrowings and Installment Payable, Continued;

      See Notes 9 and 12 for the related collateral arrangements for the
      Company's long-term debt. At December 31, 2001, the Company provided notes
      and checks, including 8 blank notes and 11 blank checks, to several banks
      and financial institutions as collateral in relation to various
      borrowings. In relation to guaranteed debentures, the Company pays
      guarantee fees at 0.4% per annum. Certain debentures are guaranteed by
      Choheung Bank. The carrying amount of the debentures is equivalent to the
      registered, issued and outstanding amount of debentures.

      The annual maturities of long-term debt, excluding discounts on debentures
      and installment payable, outstanding at December 31, 2001 are as follows :



                    Won Currency                    Installment
      Year             Loans         Debentures       Payable          Total
      ----          ------------     ----------     -----------       --------
                                                          
      2002            $  5,529        $ 15,214        $  2,802        $ 23,545
      2003              21,091             202             417          21,710
      2004              21,045             402              63          21,510
      2005              15,811             269              --          16,080
      2006                 124             269              --             393
                      --------        --------        --------        --------
                      $ 63,600        $ 16,356        $  3,282        $ 83,238
                      ========        ========        ========        ========


15.   Convertible Bonds :

      In 1996, the Company issued US Dollar-denominated convertible bonds
      aggregating $40 million bearing interest at 0.25% per annum. The bonds are
      convertible into common stock from April 22, 1996 through November 30,
      2010, at a specified conversion price. The conversion price was initially
      determined at 20,200 Korean Won per common share using the fixed rate of
      exchange of 779.72 Korean Won to US$1.00 at the time of issuance, which
      was subject to adjustment based on the occurrence of certain events such
      as making a free distribution of common shares, declaration of a dividend
      in common shares and other events which would dilute the bondholder's
      interest. These events are more fully described in the offering agreement.

Continued;


                                       41

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

15.   Convertible Bonds, Continued;

      The Company may redeem all or some of the bonds on or at any time after
      March 20, 1997 at their principal amount, together, in each case, with
      accrued interest. No such redemption may be made on or prior to March 20,
      2001 unless the average of the last selling prices or, if no sales take
      place on such day, the closing bid or offered prices of the common shares
      as reported by the Korea Stock Exchange, for each of 30 consecutive
      trading days, ending not more than 30 days prior to the date upon which
      notice of such redemption is given, has been at least 130% of the
      conversion price of each such trading day.

      Any bondholder may request the Company to redeem all or some of the bonds
      held by him on March 20, 2001 at 142.75% of the principal amount of such
      bonds, together with interest accrued to the date of redemption. The
      Company accrued interest expenses for the put premium, 42.75% of the
      principal amount, over the period from the issuance date of these
      convertible bonds to March 20, 2001.

      Unless previously redeemed, purchased and cancelled or converted, the
      bonds will be redeemed on December 31, 2010 at their principal amount
      together with accrued interest.

      During 1999, $19,720 of convertible bonds with interest of $3,545 were
      converted into the Company's common stock. As a result of the conversion,
      1,686,425 additional shares were issued, which resulted in increase of
      capital and capital surplus by $10,814 and $8,906, respectively. Remainder
      of convertible bonds comprised principal of $23,825 and accrued interest
      of $7,368 as of December 31, 1999.

      During 2000, $6,115 of convertible bonds with interest of $1,891 were
      converted into the Company's common stock. As a result of the conversion,
      744,296 additional shares were issued, which resulted in increase of
      capital and capital surplus by $3,345 and $2,770, respectively. Remainder
      of convertible bonds comprised principal of $17,710 and accrued interest
      of $7,194 as of December 31, 2000. These convertible bonds were subject to
      redemption at the request of the holders at March 20, 2001 and classified
      as current liabilities at December 31, 2000.

      On March 20, 2001, $17,710 of convertible bonds with accrued interest of
      $7,571 were redeemed at the request of bondholders.


                                       42

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

16.   Income Taxes :

      The tax provision (benefit) consists of the following :



                                                                  Year ended December 31,
                                                          ----------------------------------------
                                                             2001           2000            1999
                                                          ---------      ---------       ---------
                                                                                
          Current:                                        $      --      $  50,657       $  26,868
          Deferred:                                          13,794        (19,674)        (54,192)
                                                          ---------      ---------       ---------
          Total                                              13,794         30,983         (27,324)
          Allocated to income from  discontinued
            packaging and testing operation                      --          6,353          12,408
          Allocated to gain on sale of packaging and
            testing factories                                    --        112,724          14,268
                                                          ---------      ---------       ---------
          Continuing operations                           $  13,794      $ (88,094)      $ (54,000)
                                                          =========      =========       =========


      ASI incurs income tax liabilities based on taxable income determined in
      accordance with Korean generally accepted accounting principles and tax
      laws. The tax provision included in these financial statements reflects
      current tax expense and the impact of accounting for deferred taxes under
      SFAS 109.

      Realization of the future tax benefits related to the deferred tax assets
      is dependent on many factors, including ASI's ability to generate taxable
      income within the period during which the temporary differences reverse,
      the outlook for the Korean economy environment and the overall future
      industry outlook. Management has considered these factors in reaching its
      conclusion as to the valuation allowance for financial reporting purposes.
      Such valuation allowance is reviewed periodically.

Continued;


                                       43

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

16.   Income Taxes, Continued;

      The major components of deferred tax assets and deferred tax liabilities
      as of December 31, 2001 and 2000 are as follows :



                                                     December 31,
                                               -------------------------
                                                  2001            2000
                                               ---------       ---------
      Deferred tax assets :
                                                         
         Property, plant and equipment         $  67,252       $  88,168
         Short term and long term loans          110,246         119,311
         Provision for contingency losses         16,823          22,691
         Inventories                               3,002              --
         Accounts and notes receivable            27,928          30,224
         Investment                               24,375          25,808
         Net operating loss carryfoward           44,284              --
         Tax credit                               65,780          51,164
         Other                                       316             488
                                               ---------       ---------
               Total deferred tax assets         360,006         337,854
                                               ---------       ---------

      Deferred tax liabilities                       450             441
      Valuation allowance                       (300,464)       (264,527)
                                               ---------       ---------
      Net deferred tax assets                  $  59,092       $  72,886
                                               =========       =========


      At December 31, 2001, the Company has available unused operating loss
      carryforwards of $149,104, which may be applied against future taxable
      income through 2006. At December 31, 2001, the Company has available
      unused investment tax credits of $65,780, which may be applied against
      future income tax amounts through 2006.

      Management has reassessed the estimated future taxable income and has
      concluded that it is "more likely than not" that ASI will not realize the
      full benefit of deferred tax assets. The valuation allowance was reduced
      in 1999 due to the taxable gain realized on the sale of ASI's K4 facility
      to Amkor and the anticipated taxable gain on the sale of ASI's K1, K2 and
      K3 facilities to Amkor. Prior to the sale of these factories, it was not
      likely that the Company would be able to realize the deferred tax assets
      associated with the property, plant and equipment of the factories. In
      2000, the valuation allowance was reduced further primarily based on the
      decrease in the net deferred tax assets and the anticipated benefit and
      expected return to profitability of ASI as a result of being released from
      the Workout Program. Accordingly, a valuation allowance of $300,464 and
      $264,527 at December 31, 2001 and 2000, respectively, has been recorded.

Continued;


                                       44

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

16.   Income Taxes, Continued;

      The statutory income tax rate, including tax surcharges, applicable to ASI
      for 2001, 2000 and 1999 is approximately 30.8%, respectively and was
      amended to 29.7% effective for fiscal years beginning January 1, 2002 in
      accordance with Corporate Income Tax Law enacted in December 2001. The
      reconciliation from income taxes calculated at the statutory tax rate to
      the effective income tax amount for each of the periods is as follows :



                                                               Thousands of U.S. Dollars
                                                       -----------------------------------------
                                                          2001            2000            1999
                                                       ---------       ---------       ---------
                                                                              
       Taxes at Korean statutory tax rate              $ (43,775)      $ 148,340       $  35,213
       Remeasurement effect                               15,016         (22,068)         75,257
       Increase (decrease) in valuation allowance         35,937         (91,293)       (116,608)
       Tax credits incurred                              (12,626)        (17,767)        (12,057)
       Effect of change in tax rate                       10,881              --              --
       Other, net                                          8,361          13,771          (9,129)
                                                       ---------       ---------       ---------
        Total income tax provision (benefit)           $  13,794       $  30,983       $ (27,324)
                                                       =========       =========       =========


17.   Capital Stock:

      The authorized share capital of the Company consists of 300,000,000 shares
      of common stock and 10,000,000 shares of preferred stock, both with par
      value of W5,000 as of December 31, 2001 and 2000.

      As of December 31, 2001 and 2000, outstanding capital stocks are as
      follows :



                                  Number of shares issued
                                      and outstanding           Par value         Thousands of Won
                                  -----------------------    ---------------    ---------------------
                                                                       
         Common stock                         111,880,768      W  5,000              W    559,403,840
         Preferred stock                        2,576,276         5,000                    12,881,380
                                  -----------------------                       ---------------------
                                              114,457,044                                 572,285,220
                                  =======================                       =====================


      As of December 31, 2001 and 2000, preferred stocks are as follows :


                                           
      Series A preferred stock                    2,240,240 shares
      Series B preferred stock                      336,036
                                              --------------------
                                                 2,576,276 shares
                                              ====================


      Series A preferred stock (First Preferred) --

      Series A preferred stockholders have no voting rights and are entitled to
      non-cumulative and non-participating preferred dividends at a rate of one
      percentage point over those provided to common shareholders. This
      preferred dividend rate is not applicable to stock dividends.

 Continued;


                                       45

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

17.   Capital Stock, Continued;

      Series B Cumulative Convertible preferred stock (Second Preferred) --

      Series B Cumulative Convertible preferred stockholders are entitled to
      cumulative and participating preferred dividends at a rate of 9% of par
      value. The shareholders have no voting rights, except for the period from
      the shareholders' meeting in which dividends at a rate less than 9% of par
      value are declared through the shareholders' meeting in which dividends at
      a rate more than 9% of par value are declared. Preferred stocks shall be
      converted to common shares on March 15, 2007. The basis of conversion is
      one share of preferred stock for one share of common stock.

      In 1999, the Company declared a reverse stock split of 1.2873 common
      shares to one. The effect of this stock split was to reduce common shares
      outstanding by 6,801,860 and to reduce the related common stock par value
      by $43,040.

18.   Receivable from stockholders :

      In July 1997, the Company loaned $100,000 to a shareholder through an
      affiliated company to purchase the Company's depository receipts(the
      "Shares") issued on July 24, 1997. This loan was recorded as a contra
      equity item. In addition, the Company did not recognize interest income
      related to this loan.

      Beginning in 1999 and continuing through October 2000, the affiliated
      company at the request of the Company began selling the Shares. All the
      Shares were sold with all the proceeds being returned to the Company
      totalling $46,672. Upon completion of the sale of the Shares the loan was
      cancelled.

      In addition, the Company also made certain non-interest bearing loans to
      employees and directors to finance their acquisition of the Company's
      stock. Such loans were also recorded as a contra equity item.

      There were no such outstanding loans in 2001.


                                       46

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

19.   Earnings (Loss) Per Share :

      For the years ended December 31, 2001, 2000 and 1999, earnings (loss) per
      share (EPS) was calculated as follows :



                                                           Year ended December 31, 2001
                                            -----------------------------------------------------------
                                                                   Weighted Avg.          Per Share
                                            Earnings (loss)           Shares                Amount
                                              (Numerator)          (Denominator)        (in US dollars)
                                            ---------------        -------------        ---------------
                                                                               
    Basic loss per share                     $    (162,173)
      Less: Preferred stock dividend                  (111)
                                             -------------
    Loss attributable to Common Stock        $    (162,284)          111,880,768        $       (1.45)
                                             =============         =============        =============




                                                           Year ended December 31, 2000
                                            -----------------------------------------------------------
                                                                   Weighted Avg.          Per Share
                                            Earnings (loss)           Shares                Amount
                                              (Numerator)          (Denominator)        (in US dollars)
                                            ---------------        -------------        ---------------
                                                                               
    Loss from continuing operations          $     (19,703)
    Less: Preferred stock dividend                    (118)
                                             -------------
    Loss from continuing operations
      attributable to common stock                 (19,821)           88,838,496        $       (0.22)
                                                                   =============        =============
    Add: Income from discontinued
      operations                                   470,344
                                             -------------
    Net income attributable to common
      stock                                  $     450,523            88,838,496        $        5.07
                                             =============         =============        =============


Continued;


                                       47

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

19.   Earnings (Loss) Per Share, Continued;



                                                                      Year ended December 31, 2001
                                                        ----------------------------------------------------------
                                                                               Weighted Avg.          Per Share
                                                        Earnings (loss)           Shares                Amount
                                                          (Numerator)          (Denominator)        (in US dollars)
                                                        --------------        --------------        ---------------
                                                                                           
    Loss from continuing operations                     $     (169,759)
    Less: Preferred stock dividend                                (133)
                                                        --------------
    Weighted average number of common shares for
      the year before retroactive adjustment to
      reflect the reverse stock split                                             32,320,823
                                                                              --------------
    Effect of retroactive adjustment to
      reflect the reverse stock split                                             (3,112,084)
                                                                              --------------
    Loss from continuing operations
      attributable to common stock                            (169,892)           29,208,739        $        (5.82)
                                                                              ==============        ==============
    Add: Income from discontinued
      operations                                               279,624
                                                        --------------
    Net income attributable to common
      stock                                                    109,732            29,208,739        $         3.76
                                                        ==============        ==============        ==============


      The basic earnings per share for discontinued operations was $5.29 and
      $9.58 in 2000 and 1999, respectively. Diluted earnings per share for
      discontinued operations was $5.29 and $9.58 in 2000 and 1999,
      respectively.

      Convertible preferred stock were not included in computing diluted
      earnings per share nor were debentures convertible into common stock as
      followings in 2001, 2000 and 1999, respectively, because their effects
      were antidilutive:



                                                   Year ended December 31,
                                           ---------------------------------------
                                              2001           2000           1999
                                           ---------      ---------      ---------
                                                                
          Convertible preferred stock        324,900        324,900        336,036
          Convertible debentures                  --      2,155,611      2,899,911
                                           ---------      ---------      ---------
                                             324,900      2,480,511      3,235,947
                                           =========      =========      =========



                                       48

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

20.   Commitments and Contingencies :

      At December 31, 2001 and 2000, the Company was contingently liable for
      guarantees of indebtedness of certain affiliated companies as follows :



                                                       2001               2000
                                                      -------            -------
                                                                   
       Anam Electronics (*)                           $ 8,318            $11,939
       Anam Construction                                8,499             12,150
       Gre-tec                                             --              8,788
       Anam Telecom                                     4,378              6,539
       Acqutek                                            660                710
                                                      -------            -------
               Total                                  $21,855            $40,126
                                                      =======            =======


      (*) An affiliate through common ownership of the Kim-Family.

      As discussed in Note 5, Anam Construction, Anam Electronics and Gre-tec
      became insolvent and filed an application for corporate reorganization
      under the Korean Corporate Reorganization Act on October 24, 1998, March
      18, 1999 and December 13, 2001, respectively. The application of each
      company was accepted by the court. Anam Electronics reorganization plan
      was completed and approved by the court on February 7, 2000 and Anam
      Construction's reorganization plan was completed and approved by the court
      on March 20, 2000. Gre-tec is preparing its reorganization plan, which is
      expected to be finalized in early 2003.

      Under the terms of ASI's Workout Program, the guaranteed creditors of Anam
      Construction and Anam Electronics may exercise their right to request from
      the Company the performance of guarantee obligations only at the time when
      the guarantee obligation amount is fixed after the extinction of the
      primary debtors' legal entity as a result of bankruptcy or liquidation. In
      addition, the payment of the principal of the guarantee obligation was
      suspended until December 31, 2003 and interest during such suspension
      period will be exempted. In April 2000, the creditors committee approved
      that ASI's payment of $125,517 resulted in eliminating all guarantee
      obligations provided for Anam Construction and Anam Electronics. With
      regard to Anam Construction and Anam Electronics, a liability for loss
      contingencies of $16,817 and $22,588, respectively, was recorded at
      December 31, 2001 and 2000, for the probable loss that may occur upon
      guaranteed creditors' demand for performance of these loan guarantees. The
      Company paid $4,603 and $102,929 to creditors of Anam Constructions and
      Anam Electronics for guarantee obligations in 2001 and 2000, respectively.

Continued;


                                       49

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

20.   Commitments and Contingencies, Continued;

      ASI is a defendant in a lawsuit filed by one of above creditors for
      alleged performance of guarantee obligations provided for Anam
      Construction and Anam Electronics. The suit asks for performance of
      guarantee obligations totaling $15,242 and related interest. As described
      in preceding paragraph, ASI had recorded a liability for loss contingency
      of $13,439 relating to these creditors.

      In addition to loss provisions provided for those affiliate guarantees
      discussed above, ASI accrued an additional provision of $5,102 and $15,688
      at December 31, 2001 and 2000, respectively, related to losses expected on
      other guarantees.

      At December 31, 2001 and 2000, the Company is contingently liable for
      letters of commitment provided in relation to the issuance of $38 million
      secured floating rate notes due 2000 by Pacific Elephant Investment (L)
      limited ("PEIL") and the issuance of $20 million guaranteed floating rate
      notes due 2002 by Pacific Rainbow Investment (L) Limited ("PRIL").
      According to terms of the letters of commitment, the Company is required,
      subject to any restrictions under Korean Law, to make a capital injection
      to PEIL and PRIL if their gross asset value becomes lower than 100% of the
      outstanding principal amount of all their respective borrowings. Because
      of the economic crisis in the Asia Pacific region, the gross asset value
      of both PEIL and PRIL significantly declined and, as a result, the Company
      was asked to make capital injections to PEIL and PRIL. The Company
      negotiated this matter with various parties including those responsible
      for the operations of PEIL and PRIL to settle down these claims but no
      settlement was made. Lawsuits relating to these claims were filed in
      September, 2000. The plaintiffs are suing the Company for damages totaling
      $33 million for PEIL and $16 million for PRIL, the Company recorded
      liability for loss contingencies of $34,386 at December 31, 2001 and 2000,
      for the probable loss that may occur upon settlement of these claims.

      Liability for loss contingencies at December 31, 2001 and 2000 are as
      follows:



                                                            2001           2000
                                                          -------        -------
                                                                   
       Anam Construction and Anam Electronics             $16,817        $22,588
       Other affiliates                                     5,102         15,688
       Letters of commitment                               34,386         34,386
                                                          -------        -------
                                                          $56,305        $72,662
                                                          =======        =======



                                       50

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

20.   Commitments and Contingencies, Continued;

      The changes in the liability for loss contingencies are summarized below :



                                                  2001            2000
                                                --------       ---------
                                                         
       Beginning balance                        $ 72,662       $ 129,912
       Cash payment                              (19,338)       (102,929)
       Guarantee obligation loss                   1,447          49,797
       Proceeds from sale of investment            1,589              --
       Effect of changes in exchange rates           (55)         (4,118)
                                                --------       ---------
                                                $ 56,305       $  72,662
                                                ========       =========


      In 2000, estimated realizable value of investment in Anam Electronics,
      carrying value of zero, of $1,501 was offset against estimated liability
      for loss contingencies. In 2001, all investment in Anam Electronics was
      sold for a total proceeds of $1,589. Such proceeds were added back to the
      liability for loss contingencies in 2001.

21.   Derivative Financial Instruments :

      Net unrealized losses in relation to currency and interest swap contracts
      approximate $15,364 as of December 31, 1999 (see Note 2). In 2000, all of
      the remaining currency and interest swap contracts were settled and the
      Company recorded realized gains or losses as foreign currency exchange
      gain or loss. There were no such contracts in 2001.

22.   Fair Value of Financial Instruments :

      The estimated fair value of financial instruments has been determined by
      the Company using available market information and appropriate
      methodologies; however, considerable judgment is required in interpreting
      market data to develop estimates for fair value. Accordingly, these
      estimates are not necessarily indicative of the amounts that the Company
      could realize in a current market exchange. Certain of these financial
      instruments are with major financial institutions and expose the Company
      to market and credit risks and may at times be concentrated with certain
      counterparties or group of counter-parties. The creditworthiness of
      counterparties is continually reviewed, and full performance is
      anticipated.

      The carrying amount reported in the balance sheet for accounts receivable
      from affiliates, other accounts receivable, short-term loans receivable,
      and accrued expenses approximate fair value due to the short-term nature
      of these instruments. The methods and assumptions used to estimate the
      fair value of other significant classes of financial instruments are set
      forth below:

Continued;


                                       51

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

22.   Fair Value of Financial Instruments, continued;

      Cash and Cash Equivalents --

      Cash and cash equivalents are due on demand or carry a maturity date of
      less than three months when purchased. The carrying amount of these
      financial instruments is a reasonable estimate of fair value.

      Available for Sale Investments --

      The fair value of these financial instruments was estimated based on
      market quotes, recent offerings of similar securities, current and
      projected financial performance of the company and net asset positions.

      Long-term receivables from affiliate --

      The fair value of long-term receivables from affiliate is calculated by
      using a discount rate that approximates the current rate for similar
      long-term receivables. The carrying amount of these receivables
      approximate their value.

      Short-term borrowing --

      Short-term borrowings have variable rates that reflect currently available
      terms and conditions for similar borrowings. The carrying amount of this
      debt is a reasonable estimate of fair value.

      Long-term debt --

      Long-term debt balances have variable rates that reflect currently
      available terms and conditions for similar debt. The carrying value of
      this debt is a reasonable estimate of fair value.


                                       52

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

23.   Other (Income) Expenses :

      Other, net included in other (income) expenses consists of the following:



                                                          December 31,
                                              --------------------------------------
                                                2001           2000           1999
                                              --------       --------       --------
                                                                   
      Rental income                           $ (1,783)      $ (1,565)      $   (675)
      Shared service fee income                     --         (3,092)        (5,769)
      Income from forward contract                  --           (787)        (6,661)
      Gain on extinguishment of debt                --         (3,637)            --
      Gain on sale of scrapped material             --             --         (1,643)
      Write-off of non-trade receivables         3,849            959          3,483
      Others                                      (448)          (755)        (6,007)
                                              --------       --------       --------
                                              $  1,618       $ (8,877)      $(17,272)
                                              ========       ========       ========


24.   Related Party Transactions :

      Discontinued packaging and testing operations --

      On May 1, 2000, ASI sold the remaining packaging and testing operations to
      Amkor, the company related to ASI (see Notes 1 and 2). Net sales of the
      packaging and testing operations, consisting of plants K1, K2 and K3, for
      the years ended December 31, 2000 and 1999, including those of K4 sold to
      Amkor in May, 1999, were $166,296 and $477,862, respectively. These
      amounts have been excluded from the net sales amounts in the accompanying
      consolidated statements of operation (see Note 3).

      Significant transactions with affiliated companies during 2001, 2000 and
      1999 and the related account balances at December 31, 2001 and 2000 are
      summarized as follows:

      Transactions between the Company and its affiliated companies --



                                                   December 31,
                                       ------------------------------------
                                         2001          2000          1999
                                       --------      --------      --------
                                                          
     Sales
       Amkor                           $161,649      $499,820      $712,300
       Other affiliated companies            --            --         2,428
                                       --------      --------      --------
                                        161,649       499,820      $714,728
                                       ========      ========      ========
     Purchases
       Other affiliated companies      $     --      $     --      $ 17,612
                                       ========      ========      ========


Continued;


                                       53

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

24.   Related Party Transactions, Continued;

      Related accounts balances between the Company and its affiliated
      companies--



                                                 December 31, 2001
                                     -------------------------------------------
                                                  Other affiliated
                                       Amkor          companies         Total
                                     ----------   ----------------   ----------
                                                            
      Trade accounts receivable      $   15,439      $       --      $   15,439
      Long-term receivables                  --           9,667           9,667
                                     ----------      ----------      ----------
                                     $   15,439      $    9,667      $   25,106
                                     ==========      ==========      ==========

      Other accounts payable         $       --      $      182      $      182
                                     ==========      ==========      ==========




                                                December 31, 2000
                                     ------------------------------------------
                                                 Other affiliated
                                       Amkor         companies         Total
                                     ----------  ----------------    ----------
                                                            
      Trade accounts receivable      $   23,309      $       --      $   23,309
      Other accounts receivable              --           3,203           3,203
      Other current assets                2,906           2,533           5,439
      Long-term receivables                  --          14,800          14,800
                                     ----------      ----------      ----------
                                     $   26,215      $   20,536      $   46,751
                                     ==========      ==========      ==========

      Other accounts payable         $       --      $      527      $      527
                                     ==========      ==========      ==========


      ASI provided to Amkor transition services relating to supporting functions
      including accounting, EDP, personnel and legal. ASI's income from these
      transition services in 2001, 2000 and 1999 were $0, $3,092 and $5,769,
      respectively.


                                       54

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

25.   Segment Information :

      The Company has identified two reportable segments, specifically packaging
      and test services and wafer fabrication service, that are managed
      separately because the services provided by each segment require different
      technology.

      Prior to the sale to Amkor of the packaging and testing operations, the
      Company offered a complete and integrated set of packaging and test
      services including Integrated Circuit("IC") packaging design, leadframe
      and substrate design, IC package assembly, final testing, burn-in
      reliability test and thermal and electrical characterization. The Company
      also manufactures submircron Complementary Metal Oxide
      Semiconductor("CMOS") wafers through its foundry.

      The accounting policies for segment reporting are the same as those
      described in Note 2 to the consolidated financial statements. The Company
      evaluates its operating segments based on profit and loss.



      BY INDUSTRY SEGMENT                          Year ended December 31,
                                            ------------------------------------
                                              2001          2000          1999
                                            --------      --------      --------
                                                               
      Revenue from external customers:
         Packaging                          $     --      $166,295      $477,862
         Wafer                               161,700       344,792       264,177
         Other                                    --            --        21,748
                                            --------      --------      --------
         Total                              $161,700      $511,087      $763,787
                                            ========      ========      ========

      Property, Plant and  Equipment:
         Wafer                              $646,298      $793,850
                                            ========      ========


Continued;


                                       55

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

25.   Segment Information, Continued;

      The following is a summary of operations by country based on the location
      of the customer. Property, plant and equipment is based on the location of
      the equipment.



      BY GEOGRAPHY                                Year ended December 31,
                                            ------------------------------------
                                              2001          2000          1999
                                            --------      --------      --------
                                                               
      Revenue from external customers:
         United States                      $161,649      $499,820      $712,300
         Republic of Korea and  Others            51        11,267        51,487
                                            --------      --------      --------
         Total                              $161,700      $511,087      $763,787
                                            ========      ========      ========

      Property, Plant, and  Equipment
         United States                      $     33      $     44
         Republic of Korea                   646,265       793,806
                                            --------      --------
         Total                              $646,298      $793,850
                                            ========      ========




      BY MAJOR CUSTOMER                           Year ended December 31,
                                            ------------------------------------
                                              2001          2000          1999
                                            --------      --------      --------
                                                               
      Revenue from external customers:
         Amkor                              $161,649      $499,820      $712,300
         Other                                    51        11,267        51,487
                                            --------      --------      --------
         Total                              $161,700      $511,087      $763,787
                                            ========      ========      ========


      Summarized financial information concerning the Company's reportable
      segments is shown in the following table. The other column includes the
      elimination of inter-segment balances and corporate assets.

Continued;


                                       56

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

25.   Segment Information, Continued;



                                                       Packaging
                                          Wafer         and Test
                                       Fabrication   (Discontinued)    Other         Total
                                                     --------------   ------       ---------
                                                                       
     Year ended December 31, 2001
     Net Revenue                        $ 161,700       $     --      $    --      $ 161,700
     Gross Profit (Loss)                 (100,295)            --           --       (100,295)
     Operating Income (Loss)             (118,268)            --           --       (118,268)
     Depreciation and Amortization        186,913             --           --        186,913
     Capital Expenditures                  33,571             --           --         33,571

     Year ended December 31, 2000
     Net Revenue                        $ 344,792       $166,295      $    --      $ 511,087
     Gross Profit                          41,682         48,024           --         89,706
     Operating Income                      15,612         42,470           --         58,082
     Depreciation and Amortization        158,520         44,512           --        203,032
     Capital Expenditures                 335,829         16,746           --        352,575

     Year ended December 31, 1999
     Net Revenue                        $ 264,177       $477,862      $21,748      $ 763,787
     Gross Profit                          39,412        156,704        8,138        204,254
     Operating Income                      27,827        136,002          938        164,767
     Depreciation and Amortization        119,447        150,653        1,531        271,631


 Continued;


                                       57

                            ANAM SEMICONDUCTOR, INC.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                     (Currency - Thousands of U.S. Dollars)

                                ---------------

25.   Segment Information, Continued;



                                                                    Year ended December 31,
                                                           -------------------------------------------
                                                              2001             2000            1999
                                                           ----------       ----------      ----------
                                                                                   
     Revenues
        Total revenues for reportable segments             $  161,700       $  511,087      $  763,787
        Elimination of revenues from discontinued
          operation                                                --          166,295         477,862
                                                           ----------       ----------      ----------
        Total consolidated revenue                         $  161,700       $  344,792      $  285,925
                                                           ==========       ==========      ==========

     Gross profit
        Total gross profit for reportable segments         $ (100,295)      $   89,706      $  204,254
        Elimination of gross profit from discontinued
          operation                                                --           48,024         156,704
                                                           ----------       ----------      ----------
        Total consolidated gross profit                    $ (100,295)      $   41,682      $   47,550
                                                           ==========       ==========      ==========

     Operating income
        Total operating income for reportable
          segments                                         $ (118,268)      $   58,082      $  164,767
        Elimination of operating income from
          discontinued operation                                   --           42,470         142,472
                                                           ----------       ----------      ----------
        Total consolidated operating income                $ (118,268)      $   15,612      $   22,295
                                                           ==========       ==========      ==========



                                       58



                                   SIGNATURES


        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                                        AMKOR TECHNOLOGY, INC.

                                                        By: /s/ KENNETH T. JOYCE
                                                        ------------------------
                                                        Kenneth T. Joyce
                                                        Chief Financial Officer

                                                        Dated: March 29, 2002


                                       3