DOCUMENTS INCORPORATED BY REFERENCE:

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Item 1.	Business

•	Designing and developing innovative packaging and test technologies;

•	Offering a broad portfolio of cost-effective solutions and services;

•	Focusing on strategic end markets that offer solid growth potential;

•	Cultivating long-standing relationships with our customers, which include many of the world’s leading semiconductor companies;

•	Collaborating with customers, original equipment manufacturers (“OEMs”) and equipment and material suppliers;

•	Developing a competitive cost structure with disciplined capital investment;

•	Building expertise in high-volume manufacturing processes and developing a reputation for high quality and solid execution; and

•	Providing a geographically diverse operating base, with research and development, engineering support and production capabilities at various facilities in China, Japan, Korea, Malaysia, the Philippines, Portugal and Taiwan.

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•	An increasing demand for mobile and connected devices, including the world-wide adoption of “smart” phones, tablets and other Internet-of-Things (IoT) devices that can access the internet and provide multimedia capabilities.

•	An increase in mobility and connectivity capabilities and growing digital content driving demand for new broadband wired and wireless networking equipment.

•	The proliferation of semiconductor devices into well-established end products such as automotive systems due to increased use of electronics for safety, navigation, fuel efficiency, emission reduction and entertainment systems.

•	An overall increase in the semiconductor content within electronic products to provide greater functionality and higher levels of performance.

•	The emergence of specialized chips designed to collect, analyze and store the digital content driven by the growth of cloud computing. These chips include data accelerators, artificial intelligence and machine learning devices.

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The growth of advanced System-in-Package (“SiP”) modules where multiple semiconductor and other electronic components with different functionalities are combined into a single package. The increasing demand for miniaturization and higher functionality at competitive cost is driving the adoption of advanced SiP in new products. Advanced SiPs are the primary vehicle for package-level integration, which allow customers to combine integrated circuits (“ICs”) from different silicon nodes and different foundries.

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•	First, we are increasing our revenue in markets beyond communications, including automotive, consumer and computing end markets. Revenue from these markets tends to be more stable, with less pronounced seasonality tied to the launch of flagship phones.

•	Second, we continue to focus on share gains in the iOS and high-end Android ecosystems, leveraging our expertise in advanced SiP, MEMS and other advanced packages to expand our content in next generation 5G phones.

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•	Offering capacity to absorb large orders and accommodate quick turn-around times;

•	Obtaining favorable pricing on materials and equipment, where possible, by using our purchasing power and leading industry position;

•	Qualifying production of customer devices at multiple manufacturing sites to mitigate the risks of supply disruptions; and

•	Providing capabilities and solutions for customer-specific requirements.

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Wafer-level CSP packages (also known as fan-in wafer-level packages) do not utilize a package carrier. The bumped wafer is singulated into individual die, and the wafer-level package is then attached directly to the system board. Wafer-level CSP offers one of the lowest total system costs, enabling higher semiconductor content while leveraging the smallest form factor and one of the highest performing, most reliable, semiconductor package platforms on the market today. We have seen consistent content gains in our wafer-level CSP business, driven largely by mobile communications. Applications for wafer-level CSP include power management, transceivers, sensors, wireless charging, codecs and specialty silicon for new or unique functionality.

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Wafer-level fan-out packages (also known as low-density fan-out packages) are utilized for ICs where the die surface area is too small to accommodate all of the bond pads. The fan-out package enlarges the bondable surface area by building a border around the die using low-cost molding compound. Wafer-level CSP and wafer-level fan-out are complementary technologies. Customers can choose between the two package types as their die sizes shrink or grow. With the acquisition of Nanium, we became a leader in low-density fan-out technology.

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•	Silicon Wafer Integrated Fan-out Technology (“SWIFT”, also known as high-density fan-out) replaces a laminate substrate with a thinner structure. SWIFT solutions enable very thin, very small products combining application processors, memory, baseband and other peripheral ICs.

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•	Certification of our factories worldwide to International Organization for Standards (“ISO”) framework 14001, widely recognized as the standard for effective Environmental Management Systems.

•	Measurement and independent verification of greenhouse gases (“GHG”) generated by our factories worldwide. Once collected, our GHG data is submitted to, and disclosed publicly by, the CDP, formerly known as the Carbon Disclosure Project. CDP is a leading organization that assesses the impact of climate change and promotes a sustainable economy.

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Membership in the Responsible Business Alliance (“RBA”), formerly known as the Electronic Industry Citizenship Coalition, an international industry group dedicated to corporate social responsibility. RBA members agree to follow a uniform Code of Conduct that includes standards of environmental responsibility, and our factories have been subject to independent audits to assess compliance with these standards.

•	Capital investment and process optimization activities to reduce GHGs include installation of solar photovoltaic panels, replacement of or improvements to chiller unit systems and use of lighting based on Light Emitting Diode (“LED”) technology.

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•	technical competence;

•	quality;

•	price;

•	breadth of packaging and test services offered, including turnkey services;

•	new package and test design, technology innovation and implementation;

•	cycle times;

•	customer service;

•	available capacity; and

•	ability to invest in capacity, geographic location and scale of manufacturing.

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Item 1A.	Risk Factors

•	fluctuation in demand for semiconductors and conditions in the semiconductor industry generally, as well as by specific customers, such as inventory reductions by our customers impacting demand in key markets;

•	our ability to achieve our major growth objectives, including transitioning second-wave customers to advanced packages and increasing our share of the automotive market;

•	changes in our capacity and capacity utilization rates;

•	changes in average selling prices which can occur quickly due to the absence of long-term agreements on price;

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•	changes in the mix of the semiconductor packaging and test services that we sell;

•	fluctuations in our manufacturing yields;

•	the development, transition and ramp to high volume manufacture of more advanced silicon nodes and evolving wafer, packaging and test technologies may cause production delays, lower manufacturing yields and supply constraints for new wafers and other materials;

•	absence of backlog, the short-term nature of our customers’ commitments, double bookings by customers and deterioration in customer forecasts and the impact of these factors, including the possible delay, rescheduling and cancellation of large orders, or the timing and volume of orders relative to our production capacity;

•	changes in costs, quality, availability and delivery times of raw materials, components and equipment;

•	changes in labor costs to perform our services;

•	wage inflation and fluctuations in commodity prices, including gold, copper and other precious metals;

•	the timing of expenditures in anticipation of future orders;

•	changes in effective tax rates;

•	the availability and cost of financing;

•	leverage and debt covenants;

•	intellectual property transactions and disputes;

•	warranty and product liability claims and the impact of quality excursions and customer disputes and returns;

•	costs associated with legal claims, indemnification obligations, judgments and settlements;

•	political instability and government shutdowns, civil disturbances or international events, such as the United Kingdom’s departure from the European Union;

•	environmental or natural disasters such as earthquakes, typhoons and volcanic eruptions;

•	pandemics or other illnesses that may impact our labor force, operations and end-user demand for products which incorporate semiconductors;

•	costs of acquisitions and divestitures and difficulties integrating acquisitions;

•	our ability to attract and retain qualified personnel to support our global operations;

•	fluctuations in interest rates and currency exchange rates, including the potential impact of the phase-out of LIBOR on our variable rate debt;

•	our ability to penetrate new end markets or expand our business in existing end markets;

•	dependence on key customers or concentration of customers in certain end markets, such as mobile communications and automotive; and

•	restructuring charges, asset write-offs and impairments.

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•	changes in consumer demand resulting from deteriorating conditions in local economies;

•	laws, rules, regulations and policies imposed by U.S. or foreign governments in areas such as data privacy, cybersecurity, antitrust and competition, tax, currency and banking, labor, environmental;

•	restrictive trade barriers considered or adopted by U.S. and foreign governments applicable to the semiconductor supply chain, including laws, rules, regulations and policies in areas such as national security, licensing requirements for exports, tariffs, customs and duties;

•	health and safety concerns, including widespread outbreak of infectious diseases;

•	laws, rules, regulations and policies within China and other countries that may favor domestic companies over non-domestic companies, including customer- or government-supported efforts to promote the development and growth of local competitors;

•	the payment of dividends and other payments by non-U.S. subsidiaries may be subject to prohibitions, limitations or taxes in local jurisdictions;

•	fluctuations in currency exchange rates, particularly the dollar/yen exchange rate for our operations in Japan;

•	political and social conditions, and the potential for civil unrest, terrorism or other hostilities;

•	disruptions or delays in shipments caused by customs brokers or government agencies;

•	difficulties in attracting and retaining qualified personnel and managing foreign operations, including foreign labor disruptions;

•	difficulty in enforcing contractual rights and protecting our intellectual property rights;

•	potentially adverse tax consequences resulting from tax laws in the U.S. and in foreign jurisdictions in which we operate; and

•	local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations.

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•	our future financial condition, results of operations and cash flows;

•	general market conditions for financing;

•	volatility in fixed income, credit and equity markets; and

•	economic, political and other global conditions.

•	make it more difficult for us to satisfy our obligations with respect to our indebtedness, including our obligations under our indentures to purchase notes tendered as a result of a change in control of Amkor;

•	increase our vulnerability to general adverse economic and industry conditions;

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•	limit our ability to fund future working capital, capital expenditures, research and development and other business opportunities, including joint ventures and acquisitions;

•	require us to dedicate a substantial portion of our cash flow from operations to service payments of interest and principal on our debt, thereby reducing the availability of our cash flow to fund future working capital, capital expenditures, research and development expenditures and other general corporate requirements;

•	increase the volatility of the price of our common stock;

•	limit our flexibility to react to changes in our business and the industry in which we operate;

•	place us at a competitive disadvantage to any of our competitors that have less debt;

•	limit, along with the financial and other covenants in our indebtedness, our ability to borrow additional funds;

•	limit our ability to refinance our existing indebtedness, particularly during periods of adverse credit market conditions when refinancing indebtedness may not be available under interest rates and other terms acceptable to us or at all; and

•	increase our cost of borrowing.

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•	delays in the design and implementation of the system;

•	costs may exceed our plans and expectations; and

•	disruptions resulting from the implementation, integration or cybersecurity breach of the systems may impact our ability to process transactions and delay shipments to customers, impact our results of operations or financial condition or harm our control environment.

•	increasing the scope, geographic diversity and complexity of our operations;

•	conforming an acquired company’s standards, practices, systems and controls with our operations;

•	increasing complexity from combining recent acquisitions of an acquired business;

•	unexpected losses of key employees or customers of an acquired business;

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•	difficulties in the assimilation of acquired operations, technologies or products; and

•	diversion of management and other resources from other parts of our operations and adverse effects on existing business relationships with customers.

•	use a significant portion of our available cash;

•	incur substantial debt;

•	issue equity securities, which may dilute the ownership of current stockholders;

•	incur or assume known or unknown contingent liabilities; and

•	incur large, immediate accounting write offs and face antitrust or other regulatory inquiries or actions.

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•	discontinue the use of certain processes or cease to provide the services at issue, which could curtail our business;

•	pay substantial damages;

•	develop non-infringing technologies, which may not be feasible; or

•	acquire licenses to such technology, which may not be available on commercially reasonable terms or at all.

•	contaminants in the manufacturing environment;

•	human error;

•	equipment malfunction;

•	changing processes to address environmental requirements;

•	defective raw materials; or

•	defective plating services.

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Item 1B.	Unresolved Staff Comments

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Item 2.	Properties

(1)	Land is leased.

(2)	As a result of foreign ownership restrictions in the Philippines, the land is leased. A portion of the land we lease is owned by realty companies in which we own a 40% interest.

Item 3.	Legal Proceedings

Item 4.	Mine Safety Disclosures

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

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

(b)	Our Board of Directors previously authorized the repurchase of up to $300.0 million of our common stock, $150.0 million in August 2011 and $150.0 million in February 2012, exclusive of any fees, commissions or other expenses. During 2018 and 2019, we made no common stock purchases, and at December 31, 2019, approximately $91.6 million was available pursuant to the stock repurchase program.

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(1)	The preceding Stock Performance Graph is not deemed filed with the SEC and shall not be incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

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Item 6.	Selected Financial Data

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

(b)

In April 2019, we recorded an $8.4 million loss on extinguishment related to the call premium paid and other debt related costs associated with redemption of the outstanding $525 million aggregate principal amount of 6.375% Senior Notes due 2022. In July 2017, we recorded a loss on debt retirement of $4.4 million relating to the partial early repayment of our 6.625% Senior Notes due 2021. During 2015, we recorded a loss on debt retirement of $8.9 million relating to the early repayment of our 7.375% Senior Notes due May 2018.

(c)

In 2019, income tax expense includes a net $11.1 million discrete income tax charge related to changes in the valuation of certain deferred tax assets. In 2018, we recorded a $ 22.3 million income tax expense to complete the accounting for the impact of the Tax Act. This expense reduced our estimated net tax benefit of $41.6 million recorded in 2017, primarily due to the reversal of a valuation allowance on certain U.S. deferred tax assets as a result of the enactment of the Tax Act.

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

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(e)

We increased our investment in J-Devices from 60% to 100% on December 30, 2015 through the exercise of additional options. As a result, our accounting for our Japan operations changed from the equity method to the consolidation method effective December 30, 2015. Our balance sheet data as of December 31, 2015 reflects the consolidation of our Japan operations. We began consolidating the operating results of our Japan operations in 2016. We recognized a net loss of $13.5 million in other (income) expense, net in connection with the acquisition in 2015. The net loss resulted from a loss of $29.6 million related to the release of certain accumulated foreign currency translation adjustments related to our Japan operations, offset by a gain of $16.1 million related to the step-up to fair value of our previous investments in our Japan operations.

(f)	On January 1, 2018, we retrospectively adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). The selected financial data as of December 31, 2016 and 2015 and for the year ended December 31, 2015 was not adjusted for this new accounting standard.

(g)	On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842). As of December 31, 2019, there was an increase to our consolidated balance sheet of approximately $128 million for operating lease right of use assets and approximately $132 million for operating lease liabilities.

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

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(1)	Represents interest payment obligations calculated using stated coupon rates for fixed rate debt and interest rates applicable at December 31, 2019, for variable rate debt.

(2)	Represents off-balance sheet purchase obligations for capital expenditures, long-term supply contracts and other contractual commitments outstanding at December 31, 2019.

(3)	Represents future minimum lease payments including interest payments.

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

•	$62.8 million of foreign pension plan obligations, for which the timing and actual amount of impact on our future cash flow is uncertain.

•	$26.2 million net liability associated with unrecognized tax benefits. Due to the uncertainty regarding the amount and the timing of any future cash outflows associated with our unrecognized tax benefits, we are unable to reasonably estimate the amount and period of ultimate settlement, if any, with the various taxing authorities.

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•	significant under-performance relative to expected historical or projected future operating results;

•	significant changes in the manner of our use of the asset;

•	significant negative industry or economic trends and

•	our market capitalization relative to net book value.

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Item 7A.	Quantitative and Qualitative Disclosures about Market Risk

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Item 8.	Financial Statements and Supplementary Data

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1.	Description of Business and Summary of Significant Accounting Policies

Description of Business

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

•	Designing and developing innovative packaging and test technologies;

•	Offering a broad portfolio of cost-effective solutions and services;

•	Focusing on strategic end markets that offer solid growth potential;

•	Cultivating long-standing relationships with our customers, which include many of the world’s leading semiconductor companies;

•	Collaborating with customers, original equipment manufacturers (“OEMs”) and equipment and material suppliers;

•	Developing a competitive cost structure with disciplined capital investment;

•	Building expertise in high-volume manufacturing processes and developing a reputation for high quality and solid execution and

•	Providing a geographically diverse operating base, with research and development, engineering support and production capabilities at various facilities in China, Japan, Korea, Malaysia, the Philippines, Portugal and Taiwan.

Basis of Presentation

Our Consolidated Financial Statements include the accounts of Amkor Technology, Inc. and our subsidiaries (“Amkor”). Our Consolidated Financial Statements reflect the elimination of all significant inter-company accounts and transactions. On May 22, 2017, we completed the purchase of Nanium, S.A. (“Nanium”). Nanium’s financial results have been included in our Consolidated Financial Statements from the date of acquisition (Note 3). Our investments in variable interest entities in which we are the primary beneficiary are consolidated. We reflect the remaining portion of variable interest entities and foreign subsidiaries that are not wholly owned as noncontrolling interests.

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

Consolidation of Variable Interest Entities

We have variable interests in certain Philippine realty corporations in which we have a 40% ownership. We lease land and buildings in the Philippines from these entities and we are the primary beneficiary of these arrangements. As of December 31, 2019, the combined book value of the assets and liabilities associated with these Philippine realty corporations included in our Consolidated Balance Sheet was $16.9 million and $0.1 million, respectively. The impact of consolidating these variable interest entities on our Consolidated Statements of Income was not significant, and other than our lease payments, we have not provided any significant assistance or other financial support to these variable interest entities for the years ended December 31, 2019, 2018 or 2017. The creditors of the Philippine realty corporations have no recourse to our general credit.

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Foreign Currency Translation

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

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

Risks and Concentrations

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

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

Financial instruments, for which we are subject to credit risk, consist principally of accounts receivable and cash and cash equivalents. With respect to accounts receivable, we mitigate our credit risk by selling primarily to well-established companies, performing ongoing credit evaluations and making frequent contact with customers. In addition, we may utilize non-recourse factoring to mitigate credit risk when considered appropriate. We have historically mitigated our credit risk with respect to cash and cash equivalents through diversification of our holdings into various high quality money market funds and bank deposit accounts. At December 31, 2019, our cash and cash equivalents were maintained in various U.S. and foreign bank operating and time deposit accounts and invested in U.S. money market funds.

Contingencies and Litigation

We may be subject to certain legal proceedings, lawsuits and other claims, as discussed in Note 17. We accrue for a loss contingency, including legal proceedings, lawsuits, pending claims and other legal matters, when we conclude that the likelihood of a loss is probable and the amount of the loss can be reasonably estimated. When the reasonable estimate of the loss is within a range of amounts, and no amount in the range constitutes a better estimate than any other amount, we accrue for the amount at the low end of the range. We adjust our accruals from time to time as we receive additional information, but the loss we incur may be significantly greater than or less than the amount we have accrued. We disclose loss contingencies if we believe they are material and there is at least a reasonable possibility that a loss has been incurred. Attorney fees related to legal matters are expensed as incurred.

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Cash and Cash Equivalents

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

Restricted Cash

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

Inventories

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

Other Current Assets

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

Property, Plant and Equipment

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

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

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

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of a long-lived asset group to be held and used in operations is measured by a comparison of the carrying amount to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If such asset group is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of the asset group exceeds its fair value. Long-lived assets to be disposed of are carried at the lower of cost or fair value less the costs of disposal.

Leases

We lease certain machinery and equipment, office space, and manufacturing facilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term. We account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) combined with the non-lease components (e.g., common-area maintenance costs). We use our incremental borrowing rate based on the information available at the lease commencement date to determine the lease liability. Our leases have remaining lease terms ranging from less than one year to 86 years. For purposes of calculating our lease liabilities, our

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lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Certain leases also include options to purchase the leased property.

Goodwill

Goodwill is recorded when the cost of an acquisition exceeds the fair value of the net tangible and identifiable intangible assets acquired. We review goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that an impairment may exist. Impairment losses are recorded when the carrying amount of the reporting unit exceeds its fair value. The balance of goodwill in our Consolidated Balance Sheets reflects adjustments for foreign currency translation.

Other Assets

Other assets consist principally of deferred tax assets and refundable security deposits.

Derivatives

We use foreign exchange forward contracts to manage exposure to foreign exchange risk which are generally settled monthly. The derivatives are recorded at the fair value either in other current assets or accrued expenses, with the associated gains and losses charged to other (income) expense, net in the period in which they occur. We do not apply hedge accounting to the derivatives. See Note 15 for further discussion about the derivatives.

Fair Value Measurements

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

Revenue Recognition

We recognize revenue, net of sales, use, value-added and other similar taxes, as a performance obligation is satisfied in an amount reflecting the consideration to which we expect to be entitled. We apply a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of our revenue is recognized as services are rendered.

Our packaging and test services are our performance obligations to our customers. Our packaging services include wafer bump, probe and assembly. We provide packaging and test services to our customers either individually or as part of a combined offering. In a combined offering, we account for the individual services separately if they are determined to be distinct. We determine a service to be distinct if it is separately identifiable from other services in the combined offering and if a customer can benefit from the unique service on its own or with other resources that are readily available to the customer.

The consideration, including variable consideration, is allocated between the distinct services in a combined offering based upon the stand-alone selling prices of the individual services. Our services involve a high degree of specialization which are unique based on the design and purpose of the customer’s wafers. Accordingly, our negotiated pricing reflects the customized nature of our services and represents a customer-specific stand-alone selling price. We recognize revenue as services are rendered, which generally occurs over the course of two to three weeks. Services are generally billed at completion of each individual packaging or test service or in some instances at the completion of all services in a combined offering.

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We recognize revenue over time as services are rendered because our services create or enhance the customer’s wafer. We utilize an input method (cost incurred plus estimated margin) to determine the amount of revenue to recognize for in-process, but incomplete, customer orders at a reporting date. During the period of providing our services, we generally do not control or take ownership of customers’ wafers, nor do we include the cost of the wafer in our cost calculations. We believe that a cost-based input method is the most appropriate manner to measure how we satisfy our performance obligations to customers because the effort and costs incurred to package and/or test customer wafers are not linear over the duration of these services.

Shipping and handling costs are accounted for as a cost to fulfill our performance obligations to customers. Accordingly, we record customer payments of shipping and handling costs as a component of net sales, and the costs incurred for shipping and handling are then charged to cost of sales.

Unbilled receivables are revenues that have been recognized for performance obligations that have been satisfied, or partially satisfied, in advance of billing the customer. Revenue may be recognized in advance of billing as our contracts provide us with an unconditional right to consideration for work that is performed. Total unbilled receivables as of December 31, 2019 and 2018 were $125.4 million and $89.3 million, respectively. These amounts are included in accounts receivable, net of allowances in our Consolidated Balance Sheets.

Research and Development Costs

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

Income Taxes

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

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

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

See Note 6 for further discussion regarding unrecognized income tax benefits.

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2.	New Accounting Standards

Recently Adopted Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which was subsequently amended and clarified. Topic 842 requires a dual approach for lease accounting under which a lessee would account for leases as finance leases or operating leases. The standard also requires the lessee to recognize a right-of-use asset and a corresponding lease liability for both finance leases and operating leases. For finance leases, the lessee recognizes interest expense and amortization of the right-of-use asset, and for operating leases, the lessee recognizes a straight-line lease expense. The standard permits the use of two alternative transition approaches, either with application in all comparative periods presented or with application beginning with the effective date without restating comparative period financial statements.

Effective January 1, 2019, we adopted the requirements of Topic 842 using the modified transition approach without restating the comparative period financial statements. The new standard resulted in increases in our operating lease right of use assets, accrued expenses and long-term operating lease liabilities account balances to record our operating leases on our Consolidated Balance Sheet. The new standard also resulted in additional disclosures for our operating and finance leases (Note 10). In accordance with Topic 842, we applied practical expedients permitted under the transition guidance, which allowed us to not:

•	Reassess whether any existing contracts are or contain a lease,

•	Reassess the lease classification for any existing contracts,

•	Reassess initial direct costs for any existing leases, and

•	Separate non-lease components from lease components and instead to account for them as a single lease component for all asset classes.

3.	Acquisitions

Acquisition of Nanium

4.	Share-Based Compensation Plans

Our share-based compensation is measured at fair value and expensed over the service period (generally the vesting period). The amount of compensation expense to be recognized is adjusted for an estimated forfeiture rate which is based on historical data. For the years ended December 31, 2019, 2018 and 2017, we recognized share-based compensation attributable to stock options and restricted shares of $6.9 million, $5.0 million and $5.1 million, respectively, primarily in selling, general and administrative expenses. The corresponding deferred income tax benefits for stock options or restricted shares is $1.3 million, $1.0 million and $2.4 million for 2019, 2018 and 2017 respectively.

Equity Incentive Plan

Second Amended and Restated 2007 Equity Incentive Plan.  The Second Amended and Restated 2007 Equity Incentive Plan, (the “2007 Plan”) provides for the grant of the following types of incentive awards: (i) stock options, (ii) restricted stock, (iii) restricted stock units, (iv) stock appreciation rights, (v) performance units and performance shares and (vi) other stock or cash awards. Those eligible for awards include employees, directors and consultants who provide services to Amkor and its subsidiaries. The 2007 Plan is effective through 2027 and can be terminated at the discretion of the Board of Directors. There were originally 17.0 million shares of our common stock reserved for issuance under the 2007 Plan and at December 31, 2019 there were 5.2 million shares available for grant.

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Stock options

Stock options are generally granted with an exercise price equal to the market price of the stock at the date of grant. Substantially all of the options granted are exercisable pursuant to a one to four year vesting schedule and the term of the options granted is no longer than ten years. Upon option exercise, we may issue new shares of common or treasury stock.

In order to calculate the fair value of stock options at the date of grant, we use the Black-Scholes option pricing model. Expected volatilities are based on historical performance of our stock. We also use historical data to estimate the timing and amount of option exercises and forfeitures within the valuation model. The expected term of the options is based on evaluations of historical and expected future employee exercise behavior and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The following table summarizes our stock option activity for the year ended December 31, 2019:

	Number of Shares (In thousands)		Weighted-Average Exercise Price per Share				Weighted-Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2018	4,743		$	8.79
Granted	3,100		9.10
Exercised	(1,442)		7.91
Forfeited or expired	(556)		9.39
Outstanding at December 31, 2019	5,845		$	9.11			7.74		$	22,738
Fully vested at December 31, 2019 and expected to vest thereafter	5,718		$	9.11			7.71		$	22,256
Exercisable at December 31, 2019	2,140		$	8.87			6.04		$	8,829

The following assumptions were used to calculate the weighted-average fair values of the options granted:

	For the Year Ended December 31,
	2019				2018				2017
Expected life (in years)	6.0				6.0				5.7
Risk-free interest rate	2.5		%		2.7		%		1.9		%
Volatility	43		%		42		%		43		%
Dividend yield	—				—				—
Weighted-average grant date fair value per option granted	$	4.06			$	4.17			$	4.24

Total unrecognized compensation expense from stock options was $11.8 million as of December 31, 2019, which is expected to be recognized over a weighted-average period of approximately 2.6 years beginning January 1, 2020.

Restricted Shares

We grant restricted shares to directors and employees under the 2007 Plan. Restricted shares granted to directors vest on the earlier of the one year anniversary of the grant date or the date of the next annual meeting of stockholders. All other restricted shares vest ratably over four years, with 6.25% of the shares vesting in equal quarterly installments such that 100% of the shares will become vested on the fourth anniversary of the award, subject to the recipient’s continued employment with us on the applicable vesting dates. In addition, provided that the restricted shares have not been forfeited earlier, for certain grants, the restricted shares will vest upon the recipient’s death or disability, or upon a change in control of Amkor. The value of the restricted shares is determined based on the fair market value of the underlying shares on the date of the

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grant and is recognized ratably over the vesting period. Upon vesting of restricted stock awards, we may issue new shares of common or treasury stock.

The following table summarizes our restricted share activity for the year ended December 31, 2019:

	Number of Shares (In thousands)			Weighted- average Grant Date Fair Value (Per Share)
Non-vested at December 31, 2018	147			$	9.63
Awards granted	82			7.29
Awards vested	(83	)		9.32
Awards forfeited	—			—
Non-vested at December 31, 2019	146			8.48

Total unrecognized compensation cost from restricted shares was $0.8 million as of December 31, 2019, which is expected to be recognized over a weighted-average period of approximately 0.7 years beginning January 1, 2020.

5.	Other Income and Expense

Other income and expense consists of the following:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
Interest income	$	(6,655	)		$	(4,133	)		$	(3,215	)
Foreign currency (gain) loss, net	1,944				1,451				11,823
Loss on debt retirement	8,536				1,512				4,835
Other	(2,052		)		(5,447		)		(953		)
Total other (income) expense, net	$	1,773			$	(6,617	)		$	12,490

6.	Income Taxes

Geographic sources of income (loss) before taxes are as follows:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
United States	$	1,138			$	5,535			$	26,040
Foreign	158,672				180,280				281,456
Income before taxes	$	159,810			$	185,815			$	307,496

The provision for income taxes includes current federal, state and foreign taxes payable and those deferred because of temporary differences between the financial statement and the tax bases of assets and liabilities.

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The components of the provision (benefit) for income taxes are as follows:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
Current:
Federal	$	(179	)		$	22,003			$	—
State	3				39				11
Foreign	11,427				47,318				81,969
	11,251				69,360				81,980
Deferred:
Federal	1,832				5,468				(34,787		)
State	299				2,993				(4,072		)
Foreign	23,800				(21,571		)		(3,330		)
	25,931				(13,110		)		(42,189		)
Income tax expense	$	37,182			$	56,250			$	39,791

The reconciliation between the U.S. federal statutory income tax rate of 21% for 2019 and 2018 and 35% for 2017 and our income tax expense is as follows:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
U.S. federal statutory income tax rate	$	33,560			$	39,021			$	107,623
State taxes, net of federal benefit	293				1,677				2,624
Foreign income taxed at different rates	(10,600		)		6,340				(51,661		)
Foreign exchange (loss) gain	84				(3,797		)		29,756
Change in valuation allowance	18,374				(12,662		)		(6,763		)
Adjustments related to prior years	(3,190		)		1,898				(558		)
U.S. tax reform (the Tax Act)	—				22,284				(41,554		)
Income tax credits generated	(9,006		)		(18,106		)		(7,296		)
Foreign earnings and profits	3,360				387				719
Foreign derived intangible income	(3,195		)		—				—
Expiration of net operating losses and credits	3,084				19,462				166
Settlements and changes in uncertain tax positions	3,256				(1,230		)		5,305
Other	1,162				976				1,430
Income tax expense	$	37,182			$	56,250			$	39,791

The change in valuation allowance for 2019, 2018 and 2017, excluding the impact of the Tax Act, is primarily the result of changes in net operating loss, tax credit, and other carryforwards for which no tax expense or benefit has been recognized. Prior to 2018, the benefit of foreign income taxed at different rates increased as foreign income before tax has increased. The decrease in the U.S. federal statutory income tax rate to 21% in 2018 has reduced the impact of foreign income taxed at different rates than the U.S. rate.

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The following is a summary of the components of our deferred tax assets and liabilities:

	December 31,
	2019				2018
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	25,905			$	13,207
Income tax credits	98,158				107,532
Property, plant and equipment	27,199				38,050
Deferred interest expense	12,361				5,415
Accrued liabilities	61,812				68,402
Receivable	30,558				31,729
Unrealized foreign exchange loss	2,750				1,410
Operating lease liabilities	18,164				—
Other	11,889				14,545
Total deferred tax assets	288,796				280,290
Valuation allowance	(136,934		)		(118,560		)
Total deferred tax assets net of valuation allowance	151,862				161,730
Deferred tax liabilities:
Property, plant and equipment	23,747				14,605
Deferred gain	11,193				11,651
Unrealized foreign exchange gain	1,195				1,695
Unbilled receivables	3,580				9,515
Operating lease right of use assets	17,687				—
Other	4,125				5,805
Total deferred tax liabilities	61,527				43,271
Net deferred tax assets	$	90,335			$	118,459
Recognized as:
Other assets	$	90,465			$	118,697
Other non-current liabilities	(130		)		(238		)
Total	$	90,335			$	118,459

Valuation allowance against deferred tax assets consist of the following:

	December 31,
	2019				2018
	(In thousands)
Valuation allowance:
U.S.	$	80,241			$	77,580
Foreign	56,693				40,980
Total valuation allowance	$	136,934			$	118,560

As a result of certain capital investments, export commitments and employment levels, income from operations in Korea, Malaysia, the Philippines, Singapore and Taiwan was subject to reduced income tax rates and, in some cases, was exempt from income taxes. We recognized $14.7 million, $1.9 million and $6.2 million in tax benefits as a result of the tax holidays

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in 2019, 2018 and 2017, respectively. The benefit of the tax holidays on diluted earnings per share was approximately $0.06, $0.01 and $0.03 for 2019, 2018 and 2017, respectively.

Our net operating loss carryforwards (“NOLs”) are as follows:

	December 31,
	2019				2018				Expiration
	(In thousands)
U.S. Federal NOLs	$	23,977			$	25,272			2021-2024
U.S. State NOLs	93,674				108,011				2020-2036
Foreign NOLs	85,123				10,686				2022-2028

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

At December 31, 2019 and 2018, a portion of our remaining U.S. federal net operating loss carryforward was reserved with a valuation allowance due to ownership change limitations from a prior year acquisition as well as certain state net operating loss carryforwards expected to expire unused.

Our tax credit carryforwards are as follows:

	December 31,
	2019				2018				Expiration
	(In thousands)
U.S. Foreign Tax Credits	$	77,983			$	84,056			2026-2028
U.S. Other Tax Credits	1,404				1,117				2026-2039
Foreign Tax Credits	18,771				22,359				2020-2029

At December 31, 2019 and 2018, a portion of our U.S. and foreign tax credit carryforwards were reserved with a valuation allowance for the amount expected to expire unused.

As a result of the deemed repatriation provision of the Tax Act, U.S. income taxes have been provided on approximately $1.1 billion of the undistributed earnings of our foreign subsidiaries at December 31, 2017.  The income tax expense from the deemed repatriation was offset by net operating loss carryforwards and income tax credits resulting in a transition tax payable of $21.8 million. Under an election of the Tax Act, the remaining transition tax is payable over eight years beginning with tax year 2017, with 8% due in each of the first five years, 15% in year six, 20% in year seven, and 25% in year eight. We have not provided foreign withholding taxes or state income taxes on the undistributed earnings of our foreign subsidiaries, over which we have sufficient influence to control the distribution of such earnings and have determined that substantially all such earnings have been reinvested indefinitely. These earnings could become subject to foreign withholding tax if they are remitted as dividends. We estimate that repatriation of these foreign earnings would generate withholding taxes and state income taxes of approximately $89.8 million.

We operate in and file income tax returns in various U.S. and foreign jurisdictions which are subject to examination by tax authorities. We have tax returns that are open to examination in various jurisdictions for tax years 2012-2019. The open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations related to the amount and/or timing of income, deductions and tax credits. There can be no assurance that the outcome of examinations will be favorable. Our unrecognized tax benefits are subject to change as examinations of specific tax years are completed in the respective jurisdictions. In certain circumstances where we elect to appeal the results of an examination, we may be

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required to make tax assessment payments to proceed with the administrative appeal process. Current examinations include our 2012, 2013 and 2018 Philippine income tax returns.

A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
Balance at January 1	$	25,268			$	27,211			$	23,149
Additions based on tax positions related to the current year	8,944				401				1,419
Additions for tax positions of prior years	188				636				2,661
Reductions for tax positions of prior years	(4,539		)		(2,958		)		(1		)
Reductions related to settlements with tax authorities	(1,886		)		—				—
Reductions from lapse of statutes of limitations	(1,733		)		(22		)		(17		)
Balance at December 31	$	26,242			$	25,268			$	27,211

The net increase in our unrecognized tax benefits was $1.0 million from December 31, 2018 to December 31, 2019. The increase was primarily related to income attribution offset by the settlement of an examination of our 2015-2018 Korea tax returns. At December 31, 2019, all of our gross unrecognized tax benefits would reduce our effective tax rate, if recognized. It is reasonably possible that unrecognized tax benefits related to entity classification and withholding taxes will decrease in the next 12 months by up to $6.4 million due to the lapse of statutes of limitations in foreign jurisdictions.

The liability related to our unrecognized tax benefits is $22.3 million as of December 31, 2019 and is reported as a component of other non-current liabilities. The unrecognized tax benefits presented in the table above also include positions that have reduced deferred tax assets. The balance of accrued and unpaid interest and penalties is $3.9 million as of December 31, 2019 and is included as a component of other non-current liabilities in connection with our unrecognized tax benefits.

7.	Earnings Per Share

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

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

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

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands, except per share data)
Net income available to Amkor common stockholders	$	120,888			$	127,092			$	263,550
Weighted-average shares outstanding — basic	239,725				239,329				238,937
Effect of dilutive securities:
Stock options and restricted share awards	397				412				714
Weighted-average shares outstanding — diluted	240,122				239,741				239,651
Net income attributable to Amkor per common share:
Basic	$	0.50			$	0.53			$	1.10
Diluted	0.50				0.53				1.10

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

	For the Year Ended December 31,
	2019			2018			2017
	(In thousands)
Stock options and restricted share awards	5,379			3,662			3,445

8.	Factoring of Accounts Receivable

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9.	Property, Plant and Equipment

Property, plant and equipment consist of the following:

	December 31,
	2019				2018
	(In thousands)
Land	$	219,785			$	222,884
Land use rights (1)	—				26,845
Buildings and improvements	1,571,653				1,523,065
Machinery and equipment	5,303,729				5,196,930
Finance lease machinery and equipment	34,158				25,874
Software and computer equipment	220,264				213,440
Furniture, fixtures and other equipment	19,740				17,204
Construction in progress	12,593				44,381
Total property, plant and equipment	7,381,922				7,270,623
Less accumulated depreciation and amortization	(4,977,072		)		(4,620,175		)
Total property, plant and equipment, net	$	2,404,850			$	2,650,448

(1) Effective January 1, 2019, and in connection with the adoption of Topic 842, land use rights were reclassified to operating lease right of use asset within our Consolidated Balance Sheet.

The following table summarizes our depreciation expense:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
Depreciation expense	$	522,011			$	570,304			$	580,172

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

The components of lease expense were as follows:

	For the Year Ended December 31, 2019
Operating lease cost	$	41,559
Finance lease cost
Amortization of leased assets	5,240
Interest on lease liabilities	933
Total finance lease cost	6,173
Short-term lease cost	8,927
Variable lease cost	5,416
Net lease cost	$	62,075

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Rent expense was $43.6 million and $48.1 million for the for the year ended December 31, 2018 and 2017, respectively.

Other information related to leases was as follows:

	For the Year Ended December 31, 2019
Supplemental Cash Flows Information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	39,870
Operating cash flows for finance leases	893
Financing cash flows for finance leases	6,574
Weighted Average Remaining Lease Term (years)
Operating leases	4.7
Finance leases	3.6
Weighted Average Discount Rate
Operating leases	4.2		%
Finance leases	4.6		%

Maturities of lease liabilities were as follows:

December 31, 2019									December 31, 2018
	Operating Leases				Finance Leases					Operating Leases				Finance Leases
	(In thousands)									(In thousands)
2020	$	46,204			$	9,905			2019	$	32,461			$	6,430
2021	35,686				8,808				2020	24,630				4,555
2022	21,015				2,064				2021	17,676				4,748
2023	11,046				956				2022	10,942				936
2024	9,605				949				2023	9,008				936
Thereafter	24,244				2,864				Thereafter	26,070				3,807
Total future minimum lease payments	147,800				25,546					$	120,787			$	21,412
Less: Imputed interest	(15,721		)		(2,317		)
Total	$	132,079			$	23,229

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Accrued expenses consist of the following:

	December 31,
	2019				2018
	(In thousands)
Payroll and benefits	$	115,693			$	124,943
Short-term operating lease liability	40,972				—
Deferred revenue and customer advances	16,177				16,736
Accrued severance plan obligations (Note 13)	13,408				13,179
Income taxes payable	11,661				38,567
Accrued interest	11,638				10,302
Short-term finance lease liability	9,121				6,028
Other accrued expenses	48,556				48,454
Total accrued expenses	$	267,226			$	258,209

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Short-term borrowings and long-term debt consist of the following:

	December 31,
	2019				2018
	(In thousands)
Debt of Amkor Technology, Inc.:
Senior notes:
6.375% Senior notes, due October 2022 (1)	$	—			$	524,971
6.625% Senior notes, due September 2027 (1)	525,000				—
Debt of subsidiaries:
Amkor Technology Korea, Inc.:
$30 million revolving credit facility, LIBOR plus the applicable bank rate, due October 2020 (2)	—				—
Term loan, fixed rate at 3.70%, due May 2020 (3)(5)	—				120,000
Term loan, fund floating rate plus 1.60%, due June 2020 (4) (5) (6)	24,000				125,000
Term loan, applicable bank rate plus 2.03%, due July 2022 (5)	40,000				—
Term loan, applicable bank rate plus 2.03%, due September 2022 (5)	60,000				—
Term loan, LIBOR plus 2.56%, due December 2023	200,000				200,000
Term loan, applicable bank rate plus 1.98%, due December 2028 (6)	66,000				24,000
Amkor Technology Japan, Inc.:
Short-term term loans, variable rate (7)	7,071				8,232
Term loan, fixed rate at 0.86%, due June 2022	23,018				31,908
Term loan, fixed rate at 0.60%, due July 2022	5,064				6,838
Term loan, fixed rate at 1.30%, due July 2023	179,541				225,180
Term loan, fixed rate at 1.35%, due December 2024 (8)	262,407				—
Amkor Assembly & Test (Shanghai) Co., Ltd.:
Term loan, LIBOR plus 1.80%, due December 2019 (9)	—				48,000
Term loan, LIBOR plus 1.60%, due March 2022 (9)	29,000				—
Term loan, LIBOR Plus 1.40%, due March 2022 (9)	19,250				—
Other:
$250 million senior secured revolving credit facility, LIBOR plus 1.25%-1.75%, due July 2023 (Singapore) (8) (10)	—				—
Revolving credit facility, TAIFX plus the applicable bank rate, due November 2020 (Taiwan) (11)	—				20,000
Revolving credit facility, TAIFX plus the applicable bank rate, due December 2024 (Taiwan) (11)	20,000				—
	1,460,351				1,334,129
Less: Unamortized premium, discount and deferred debt costs, net	(10,117		)		(1,818		)
Less: Short-term borrowings and current portion of long-term debt	(144,479		)		(114,579		)
Long-term debt	$	1,305,755			$	1,217,732

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(1)

In April 2019, we redeemed the outstanding $525.0 million aggregate principal amount of our 6.375% Senior Notes due 2022 (“2022 Notes”). In accordance with the terms of the indenture governing the 2022 Notes, the redemption price was 101.594% of the principal amount of the 2022 Notes plus accrued and unpaid interest. We recorded an $8.4 million loss on extinguishment related to the call premium paid and other debt related costs associated with the 2022 Notes. The redemption of the 2022 Notes was funded with net proceeds from our issuance of $525.0 million of 6.625% Senior Notes due September 2027 (“2027 Notes”) in March 2019, together with cash on hand. The 2027 Notes were issued at a discount of 99.5% or $2.6 million and are senior unsecured obligations. Interest is payable semiannually on March 15 and September 15 of each year, commencing September 15, 2019. We incurred $3.6 million of debt issuance costs associated with the 2027 Notes.

(2)	In October 2019, we renewed our revolving credit facility agreement with availability of $30.0 million. Interest is payable monthly in arrears. Principal will be payable at the maturity date of October 2020. As of December 31, 2019, $30.0 million was available to be drawn.

(3)	In May 2017, we entered into a $120.0 million term loan agreement due May 2020. During 2019, we repaid all $120.0 million of the outstanding balance of this term loan.

(4)	In May 2015, we entered into a term loan agreement pursuant to which we may borrow up to $150.0 million for capital expenditures. Principal is payable at maturity in June 2020. Interest is payable quarterly in arrears. During 2019, we repaid $101.0 million of the outstanding balance of this term loan. In February 2020, we repaid the remaining $24.0 million of the outstanding balance.

(5)	In July 2019, we entered into an agreement pursuant to which we may borrow up to $180.0 million for purchases of materials through two term loans. Principal is payable at maturity and interest is payable quarterly in arrears.

We borrowed the full balance of $40.0 million under the first term loan in July 2019 to repay $40.0 million of the outstanding balance for the term loan due May 2020. This term loan bears interest at a fixed rate of 3.80% and has a maturity date of July 2022.

We borrowed $60.0 million under the second term loan in September 2019 to repay part of the term loan due June 2020. The $60.0 million borrowing under the second term loan bears interest at a fixed rate of 3.59% and has a maturity date of September 2022. As of December 31, 2019, $80.0 million was available to be drawn under the second term loan.

(6)

In December 2018, we entered into a term loan agreement pursuant to which we may borrow up to $90.0 million for capital expenditures. During 2019, we borrowed $42.0 million of this term loan and used the proceeds to repay part of the term loan due June 2020. Principal of this term loan is payable in semiannual installments beginning June 2022 and ending at maturity in December 2028. Interest is fixed at 4.5% and is payable quarterly in arrears. As of December 31, 2019, $24.0 million was available to be drawn. In February 2020, we used the remaining $24.0 million to repay, in full, the term loan due June 2020.

(7)	We entered into various short-term loans which mature semiannually. Principal is payable in monthly installments. As of December 31, 2019, $6.0 million was available to be drawn.

(8)

In December 2019, we entered into a ¥28.5 billion (US$260.6 million) term loan agreement due December 2024, guaranteed by Amkor Technology Inc. and our subsidiary, Amkor Technology Singapore Holding Pte, Ltd. Principal is due in 20 equal, quarterly installments plus accrued interest, through maturity. We immediately drew down $260.6 million. In December 2019, we used the proceeds to pay down $80.0 million of the senior secured revolving credit facility due July 2023. In January 2020, we also used these proceeds to repay $120.0 million of our term loan due December 2023. The remaining proceeds will be used for other general corporate purposes.

(9)

In December 2016, we entered into a $50.0 million term loan agreement. Principal is payable in semiannual installments of $0.5 million, with the remaining balance due at maturity in December 2019. Interest is payable quarterly. During the twelve months ended December 31, 2019, we repaid the entire $48.0 million outstanding balance of this term loan using the proceeds from our term loans due March 2022.

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In March 2019, we entered into a $30.0 million term loan agreement due March 2022. We borrowed $30.0 million under this term loan and used the proceeds to repay part of the term loan due December 2019. Principal is payable in semiannual installments of $0.5 million, with the remaining balance due at maturity. Interest is payable quarterly.

In April 2019, we entered into a term loan agreement with availability of $20.0 million due March 2022. We borrowed $20.0 million under this term loan and used the proceeds to repay part of the term loan due December 2019. Principal is payable in semiannual installments of $0.5 million, with the remaining balance due at maturity. Interest is payable quarterly.

(10)

In July 2018, the senior secured revolving credit facility of Amkor Technology, Inc. was terminated and replaced by a new facility due July 2023 entered into by our subsidiary, Amkor Technology Singapore Holding Pte, Ltd., and guaranteed by Amkor Technology, Inc. We recorded a $0.4 million charge for the write-off of the associated unamortized debt issuance costs relating to the terminated credit facility. The availability for the new revolving credit facility is based on the amount of eligible accounts receivable. As of December 31, 2019, $250.0 million was available to be drawn.

(11)

In November 2015, we entered into a $39.0 million revolving credit facility due November 2020. In December 2019, we entered into a $56.0 million revolving credit facility due December 2024 to replace the $39.0 million revolving credit facility. We immediately drew $20.0 million to repay the credit facility due November 2020. Principal is payable at maturity. As of December 31, 2019, $36.0 million was available to be drawn under the credit facility due December 2024.

Certain of our foreign debt is collateralized by the land, buildings, equipment and accounts receivable in the respective locations. The carrying value of all collateral exceeds the carrying amount of the collateralized debt.

Interest Rates

Interest is payable semiannually on our senior notes and quarterly or monthly on our other fixed- and variable-rate debt. Refer to the table above for the interest rates on our fixed-rate debt and to the table below for the interest rates on our variable-rate debt.

	December 31,
	2019			2018
Amkor Technology Korea, Inc.:
Term Loan, fund floating rate plus 1.60%, due June 2020	3.90	%		4.49	%
Term loan, LIBOR plus 2.56%, due December 2023	4.49	%		5.38	%
Amkor Technology Japan, Inc:
Short-term term loans, variable rate	0.22	%		0.24	%
Amkor Assembly & Test (Shanghai) Co., Ltd.:
Term loan, LIBOR plus 1.80%, due December 2019	—			4.22	%
Term loan, LIBOR plus 1.60%, due March 2022	3.53	%		—
Term loan, LIBOR Plus 1.40%, due March 2022	3.30	%		—
Amkor Technology Taiwan Ltd.:
Revolving credit facility, TAIFX plus the applicable bank rate, due November 2020	—	%		4.26
Revolving credit facility, TAIFX plus the applicable bank rate, due December 2024	3.35	%		—

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Compliance with Debt Covenants

The debt of Amkor Technology, Inc. is structurally subordinated in right of payment to all existing and future debt and other liabilities of our subsidiaries. From time to time, Amkor Technology, Inc. and Amkor Technology Singapore Holding Pte, Ltd. guarantee certain debt of our subsidiaries. The agreements governing our indebtedness contain affirmative, negative and financial covenants which restrict our ability to pay dividends and could restrict our operations. We have never paid a dividend to our stockholders and we do not have any present plans for doing so. We were in compliance with all debt covenants at December 31, 2019 and 2018.

Maturities

	Total Debt
	(In thousands)
Payments due for the year ending December 31,
2020	$	144,479
2021	113,408
2022	260,022
2023	297,818
2024	81,910
Thereafter	562,714
Total debt	$	1,460,351

Korean Severance Plan

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

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

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
Balance at January 1	$	142,298			$	153,920			$	136,396
Provision of severance benefits	1,306				1,939				11,714
Severance payments	(10,659		)		(7,611		)		(11,787		)
Foreign currency (gain) loss	(5,398		)		(5,950		)		17,597
Balance at December 31	127,547				142,298				153,920
Payments remaining with the National Pension Fund	(161		)		(172		)		(185		)
Total accrued severance plan obligations at December 31	127,386				142,126				153,735
Less current portion of accrued severance plan obligations (Note 11)	13,408				13,179				15,190
Non-current portion of accrued severance plan obligations	$	113,978			$	128,947			$	138,545

Foreign Defined Benefit Pension Plans

Our subsidiaries in Japan, Korea, Malaysia, the Philippines and Taiwan sponsor defined benefit plans (the “Plans”). Charges to expense are based upon actuarial analyses. The following table summarizes the changes to the Plans’ benefit obligations, fair value of the Plans’ assets and the funded status of the Plans at December 31, 2019 and 2018:

	For the Year Ended December 31,
	2019				2018
	(In thousands)
Change in projected benefit obligation:
Projected benefit obligation at January 1	$	175,712			$	158,466
Service cost	31,355				32,913
Interest cost	5,244				4,867
Benefits paid	(11,742		)		(6,137		)
Actuarial (gain) loss	12,540				(5,991		)
Settlement	(5,310		)		(5,055		)
Foreign exchange (gain) loss	(351		)		(3,351		)
Projected benefit obligation at December 31	207,448				175,712
Change in plan assets:
Fair value of plan assets at January 1	123,370				115,725
Actual gain (loss) on plan assets	12,221				(4,210		)
Employer contributions	27,134				26,899
Settlement	(5,310		)		(5,055		)
Benefits paid	(11,742		)		(6,137		)
Foreign exchange gain (loss)	(515		)		(3,852		)
Fair value of plan assets at December 31	145,158				123,370
Funded status of the Plans at December 31	$	(62,290	)		$	(52,342	)

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	December 31,
	2019				2018
	(In thousands)
Amounts recognized in the Consolidated Balance Sheets consist of:
Prepaid benefit cost (included in non-current assets)	$	498			$	2,740
Accrued benefit liability (included in pension and severance obligations)	(62,788		)		(55,082		)
Net amount recognized at year end	$	(62,290	)		$	(52,342	)

The accumulated benefit obligation as of December 31, 2019 and 2018 was $154.7 million and $132.9 million, respectively.

The following table summarizes, by component, the change in accumulated other comprehensive income (loss), net of tax related to our Plans:

	Prior Service Cost				Actuarial Net Gain (Loss)				Total
	(In thousands)
Balance at December 31, 2017	$	603			$	5,700			$	6,303
Amortization included in net periodic pension cost	(1		)		(1,735		)		(1,736		)
Net gain (loss) arising during period	—				(1,908		)		(1,908		)
Adjustments to unrealized components of defined benefit pension plan included in other comprehensive income (loss)	(1		)		(3,643		)		(3,644		)
Balance at December 31, 2018	602				2,057				2,659
Amortization and settlement gain included in net periodic pension cost	—				(589		)		(589		)
Net gain (loss) arising during period	—				(6,890		)		(6,890		)
Adjustments to unrealized components of defined benefit pension plan included in other comprehensive income (loss)	—				(7,479		)		(7,479		)
Balance at December 31, 2019	$	602			$	(5,422	)		$	(4,820	)
Estimated amortization of cost to be included in 2020 net periodic pension cost	$	—			$	59			$	59

Information for pension plans with benefit obligations in excess of plan assets is as follows:

	December 31,
	2019				2018
	(In thousands)
Plans with underfunded or non-funded projected benefit obligation:
Aggregate projected benefit obligation	$	197,377			$	135,967
Aggregate fair value of plan assets	134,589				80,885
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate accumulated benefit obligation	71,059				63,274
Aggregate fair value of plan assets	24,043				20,094

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The following table summarizes total pension expense:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
Components of net periodic pension cost and total pension expense:
Service cost	$	31,355			$	32,913			$	33,823
Interest cost	5,244				4,867				4,067
Expected return on plan assets	(6,412		)		(5,640		)		(4,537		)
Amortization of prior service cost	—				6				30
Recognized actuarial (gain) loss	(374		)		(147		)		84
Net periodic pension cost	29,813				31,999				33,467
Curtailment loss	—				—				574
Settlement (gain) loss	(210		)		(1,639		)		383
Total pension expense	$	29,603			$	30,360			$	34,424

The components of net periodic pension cost other than the service cost component are included in other (income) expense, net in our Consolidated Statements of Income.

The following table summarizes the weighted-average assumptions used in computing the net periodic pension cost and projected benefit obligations:

	For the Year Ended December 31,
	2019			2018			2017
Discount rate for determining net periodic pension cost	3.1	%		3.2	%		3.1	%
Discount rate for determining benefit obligations at December 31	2.5	%		3.1	%		3.2	%
Rate of compensation increase for determining net periodic pension cost	3.6	%		3.8	%		3.8	%
Rate of compensation increase for determining benefit obligations at December 31	3.7	%		3.6	%		3.8	%
Expected rate of return on plan assets for determining net periodic pension cost	5.1	%		4.9	%		4.9	%

The measurement date for determining the Plans’ assets and benefit obligations is December 31, each year. Discount rates are generally derived from yield curves constructed from high-quality corporate or foreign government bonds, for which the timing and amount of cash outflows approximate the estimated payouts.

The expected rate of return assumption is based on weighted-average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets and include input from our actuaries. We have no control over the direction of our investments in our defined benefit plans in Taiwan as the local Labor Standards Law Fund mandates such contributions into a cash account balance at the Bank of Taiwan. Our defined benefit pension plan in Malaysia is a non-funded plan, and as such, no asset exists related to this plan. Our investment strategies for our defined benefit plans in Japan, Korea and the Philippines, are based on long-term, sustained asset growth through low to medium risk investments. The current rate of return assumption targets are based on asset allocation strategies as follows:

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	Allocation
	Debt			Equity			Other
Japan defined benefit plan	65	%		33	%		2	%
Korea defined benefit plan	15	%		40	%		45	%
Philippine defined benefit plan	40	%		50	%		10	%

The fair value of our pension plan assets, by asset category utilizing the fair value hierarchy as discussed in Note 16, is as follows:

	December 31,
	2019				2018
	(In thousands)
Cash and cash equivalents (Level 1)	$	3,614			$	6,640
Equity securities
U.S. securities (Level 1)	19,276				15,069
U.S. securities (Level 2)	2				—
Foreign securities (Level 1)	11,854				10,162
Foreign securities (Level 2)	28				—
Foreign mutual funds (Level 1)	30,801				25,236
	61,961				50,467
Debt securities
U.S. government bonds (Level 2)	1,442				1,039
U.S. corporate bonds (Level 2)	31				29
Foreign government bonds (Level 1)	3,338				4,427
Foreign government bonds (Level 2)	9,821				9,545
Foreign corporate bonds (Level 1)	379				5,713
Foreign corporate bonds (Level 2)	5,249				1,951
Foreign treasury notes (Level 1)	3,516				2,587
Foreign mutual funds (Level 1)	11,404				11,188
	35,180				36,479
Foreign guaranteed investment contracts (Level 2)	33,931				18,120
Taiwan retirement fund (Level 1)	11,359				10,451
Other, net (Level 1)	99				680
Other, net (Level 2)	(986		)		533
Total fair value of pension plan assets	$	145,158			$	123,370

The Taiwan retirement fund category of our plan assets represents accounts that our subsidiaries in Taiwan have in a government labor retirement fund in the custody of the Bank of Taiwan. The accounts earn a minimum guaranteed rate of return and are invested in a mix of cash, domestic and foreign equity securities and domestic and foreign debt securities.

We expect to make contributions of approximately $23 million during 2020. We closely monitor the funded status of the Plans with respect to legislative requirements. We intend to make at least the minimum contribution required by law each year.

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The estimated future benefit payments related to our foreign defined benefit plans are as follows:

	Payments
	(In thousands)
2020	$	9,569
2021	11,780
2022	13,093
2023	15,573
2024	18,584
2025 to 2029	137,242

Defined Contribution Plans

We sponsor defined contribution plans in Korea, Malaysia, Taiwan and the U.S. Total defined contribution expense was $13.6 million, $12.2 million and $10.4 million for 2019, 2018 and 2017, respectively.

The following table reflects the changes in accumulated other comprehensive income (loss), net of tax:

	Defined Benefit Pension				Foreign Currency Translation				Total
	(In thousands)
Balance at December 31, 2017	$	6,303			$	16,216			$	22,519
Other comprehensive income (loss) before reclassifications	(1,908		)		4,937				3,029
Amounts reclassified from accumulated other comprehensive income (loss)	(1,736		)		—				(1,736		)
Other comprehensive income (loss)	(3,644		)		4,937				1,293
Balance at December 31, 2018	$	2,659			$	21,153			$	23,812
Other comprehensive income (loss) before reclassifications	(6,890		)		2,782				(4,108		)
Amounts reclassified from accumulated other comprehensive income (loss)	(589		)		—				(589		)
Other comprehensive income (loss)	(7,479		)		2,782				(4,697		)
Balance at December 31, 2019	$	(4,820	)		$	23,935			$	19,115

Amounts reclassified out of accumulated other comprehensive income (loss) are included as a component of net periodic pension cost (Note 13) or other (income) expense, net.

We use foreign currency forward contracts to mitigate foreign currency risk of certain assets and monetary liabilities denominated in foreign currencies. We do not enter into such contracts for trading or speculative purposes. These derivative instruments are not designated as hedging instruments.

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As of December 31, 2019 and 2018, our foreign exchange forward contracts consisted of the following:

	December 31, 2019										December 31, 2018
	Notional Value				Fair Value (Level 2)				Balance Sheet Location		Notional Value				Fair Value (Level 2)				Balance Sheet Location
	(In thousands)
Japanese Yen	$	391,643			$	2,225			Other current assets		$	163,419			$	1,565			Other current assets
Korean Won	74,076				86				Other current assets		—				—				N/A
Total forward contracts	$	465,719			$	2,311					$	163,419			$	1,565

The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers as follows: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data.

The fair values of cash, accounts receivable, trade accounts payable, capital expenditures payable, and certain other current assets and accrued expenses approximate carrying values because of their short-term nature. The carrying value of certain other non-current assets and liabilities approximates fair value. Our assets and liabilities recorded at fair value on a recurring basis include cash equivalent money market funds and restricted cash money market funds. We also review goodwill for impairment annually during the fourth quarter of each year. Cash equivalent money market funds and restricted cash money market funds are invested in U.S. money market funds and various U.S. and foreign bank operating and time deposit accounts, which are due on demand or carry a maturity date of less than three months when purchased. No restrictions have been imposed on us regarding withdrawal of balances with respect to our cash equivalents as a result of liquidity or other credit market issues affecting the money market funds we invest in or the counterparty financial institutions holding our deposits. Money market funds are valued using quoted market prices in active markets for identical assets.

Our derivative financial instruments (Note 15) are valued using quoted market prices for similar assets. Counterparties to these derivative contracts are highly rated financial institutions.

Recurring fair value measurements not otherwise disclosed elsewhere in our Consolidated Financial Statements consist of the following:

	December 31,
	2019				2018
	(In thousands)
Cash equivalent money market funds (Level 1)	$	97,762			$	74,407
Restricted cash money market funds (Level 1)	610				2,589

We also measure certain assets and liabilities, including property, plant and equipment, operating lease right of use assets and goodwill, at fair value on a nonrecurring basis.

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We measure the fair value of our debt for disclosure purposes. The following table presents the fair value of financial instruments that are not recorded at fair value on a recurring basis:

	December 31, 2019								December 31, 2018
	Fair Value				Carrying Value				Fair Value				Carrying Value
	(In thousands)
Senior notes (Level 1)	$	576,875			$	519,211			$	526,131			$	524,978
Revolving credit facilities and term loans (Level 2)	940,756				931,023				803,867				807,333
Total financial instruments	$	1,517,631			$	1,450,234			$	1,329,998			$	1,332,311

The estimated fair value of our senior notes is based primarily on quoted market prices reported on or near the respective balance sheet dates. The estimated fair value of our revolving credit facilities and term loans is calculated using a discounted cash flow analysis, which utilizes market based assumptions including forward interest rates adjusted for credit risk.

We generally warrant that our services will be performed in a professional and workmanlike manner and in compliance with our customers’ specifications. We accrue costs for known warranty issues. Historically, our warranty costs have been immaterial.

Legal Proceedings

We are involved in claims and legal proceedings and may become involved in other legal matters arising in the ordinary course of our business. We evaluate these claims and legal matters on a case-by-case basis to make a determination as to the impact, if any, on our business, liquidity, results of operations, financial condition or cash flows. Although the outcome of these matters is uncertain, we believe that the ultimate outcome of these claims and proceedings, individually and in the aggregate, will not have a material adverse impact to us. Our evaluation of the potential impact of these claims and legal proceedings on our business, liquidity, results of operations, financial condition or cash flows could change in the future.

Settlement of Patent License Litigation

Under the terms of a January 2015 patent license litigation settlement, Amkor agreed to pay a total of $155.0 million in 16 equal quarterly recurring payments commencing in the first quarter of 2015 and continuing through the fourth quarter of 2018.

At December 31, 2019 and 2018, we have no remaining liability under this settlement agreement.

Purchase Commitments

In order to provide packaging and test services, we purchase materials under various long-term supply contracts. Future minimum payments to be made under these contracts for the period 2020 through 2027 are $12.3 million.

We operate as a single operating segment as managed by our Chief Executive Officer, who is considered our chief operating decision maker (“CODM”). The CODM bears the ultimate responsibility for, and is actively engaged in, the allocation of resources and the evaluation of our operating and financial results. We have concluded that we have a single operating segment based on the following:

•	We are managed under a functionally-based organizational structure with the head of each function reporting directly to the CODM;

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•	We assess performance, including incentive compensation, based on consolidated operating performance and financial results;

•	Our CODM allocates resources and makes other operating decisions based on specific customer business opportunities and

•	We have an integrated process for the design, development and manufacturing services we provide to all of our customers. We also have centralized sales and administrative functions.

Net sales by product group consist of the following:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
Advanced Products	$	2,110,815			$	2,118,571			$	1,966,483
Mainstream Products	1,941,835				2,197,895				2,240,548
Total net sales	$	4,052,650			$	4,316,466			$	4,207,031

(1)	Advanced products include flip chip and wafer-level processing and related test services.

(2)	Mainstream products include wirebond packaging and related test services.

Net sales by end market consist of the following:

	For the Year Ended December 31,
	2019			2018			2017
Communications (handheld devices, smartphones, tablets)	38	%		44	%		43	%
Automotive, industrial and other (driver assist, infotainment, performance, safety)	27	%		26	%		26	%
Consumer (connected home, set-top boxes, televisions, visual imaging, wearables)	18	%		12	%		13	%
Computing (datacenter, infrastructure, PC/laptop, storage)	17	%		18	%		18	%
Total net sales	100	%		100	%		100	%

Net sales by region based on customer headquarters location consist of the following:

	For the Year Ended December 31,
	2019				2018				2017
	(In thousands)
Japan	$	1,061,265			$	1,156,797			$	1,210,296
Europe, Middle East and Africa	625,592				605,932				540,126
Asia Pacific (excluding Japan)	487,406				535,894				837,014
Total foreign countries	2,174,263				2,298,623				2,587,436
United States	1,878,387				2,017,843				1,619,595
Total net sales	$	4,052,650			$	4,316,466			$	4,207,031

In 2019, no single customer accounted for more than 10% of total net sales. One customer accounted for 10.2%, and 14.3% of net sales in 2018 and 2017, respectively.

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Property, plant and equipment, net, based on physical location, consist of the following:

	December 31,
	2019				2018
	(In thousands)
China	$	419,749			$	472,858
Japan	177,936				219,373
Korea	1,179,966				1,213,838
Malaysia	41,030				47,491
Philippines	215,941				270,562
Portugal	63,975				63,323
Taiwan	298,982				352,576
Other foreign countries	1,167				170
Total foreign countries	2,398,746				2,640,191
United States	6,104				10,257
Total property, plant and equipment, net	$	2,404,850			$	2,650,448

The following table sets forth our consolidated unaudited financial data for the last eight quarters ended December 31, 2019. We believe that we have included all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of our selected quarterly data. The calculation of basic and diluted per share amounts for each quarter is based on the weighted-average shares outstanding for that period; consequently, the sum of the quarters may not necessarily be equal to the full year basic and diluted net income per share.

	For the Quarter Ended
	Dec 31, 2019 (a)				Sep 30, 2019				Jun 30, 2019 (b)				Mar 31, 2019 (c)				Dec 31, 2018 (d)				Sep 30, 2018				Jun 30, 2018				Mar 31, 2018
	(In thousands, except per share data)
Net sales	$	1,178,464			$	1,083,917			$	895,305			$	894,964			$	1,081,271			$	1,144,192			$	1,065,684			$	1,025,319
Gross profit	222,984				182,240				123,454				120,761				182,370				200,707				169,717				157,771
Operating income	118,385				78,855				22,510				13,420				75,381				92,703				53,941				36,119
Income tax expense	764				9,141				5,897				21,380				28,812				14,326				10,631				2,481
Net income (loss)	99,816				54,486				(9,006		)		(22,668		)		28,894				57,292				33,184				10,195
Net income (loss) attributable to Amkor	99,147				54,070				(9,450		)		(22,879		)		28,295				56,662				32,591				9,544
Net income (loss) attributable to Amkor per common share:
Basic	$	0.41			$	0.23			$	(0.04	)		$	(0.10	)		$	0.12			$	0.24			$	0.14			$	0.04
Diluted	$	0.41			$	0.23			$	(0.04	)		$	(0.10	)		$	0.12			$	0.24			$	0.14			$	0.04

(a)	In the fourth quarter of 2019, we recorded a $3.8 million discrete income tax benefit, primarily related to changes in the valuation of certain deferred tax assets.

(b)	In the second quarter of 2019, we incurred an $8.4 million charge related to the early redemption of our 2022 Notes.

(c)	In the first quarter of 2019, we recorded a $14.9 million non-cash discrete income tax charge to reduce the value of certain deferred tax assets.

(d)	In the fourth quarter of 2018, we recorded a $22.3 million income tax expense to complete the accounting for the impact of the Tax Act, reducing our estimated net tax benefit of $41.6 million from 2017.

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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

	Balance at Beginning of Period				Additions (Credited) Charged to Expense			Write-offs			(a) Other			Balance at End of Period
	(In thousands)
Deferred tax asset valuation allowance:
Year ended at December 31, 2017	$	165,484			(117,121	)		(489	)		35,377			$	83,251
Year ended at December 31, 2018	$	83,251			54,421			(19,112	)		—			$	118,560
Year ended at December 31, 2019	$	118,560			21,496			(3,122	)		—			$	136,934

(a)	Column represents adjustments to the deferred tax asset valuation allowance established as part of the purchase accounting related to Amkor’s acquisition of Nanium in 2017 and adjustments directly through stockholders’ equity for changes in accumulated other comprehensive income (loss) related to our foreign defined benefit pension plans.

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Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.	Controls and Procedures

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Item 9B.	Other Information

Item 10.	Directors, Executive Officers and Corporate Governance

Item 11.	Executive Compensation

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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(1)	As of December 31, 2019, a total of 5.2 million shares were reserved for issuance under the 2007 Plan. Shares available for issuance under our 2007 Plan can be granted pursuant to stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares.

Item 13.	Certain Relationships and Related Transactions, and Director Independence

Item 14.	Principal Accountant Fees and Services

Item 15.	Exhibits and Financial Statement Schedules

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Item 16.	Form 10-K Summary

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