##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|           |  | For the Fiscal Year Ended December 31, 2004                                                 
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|           |  | For the transition period
    from           to                                             

Commission File Number 0-50397


AMIS Holdings, Inc.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 51-0309588                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|2300 Buckskin Road Pocatello, ID                                   |  | 83201                                   
|(Address of principal executive offices)                           |  | (Zip Code)                              

Registrants telephone number, including area code


(208) 233-4690


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12 (g) of
the Act:


Common stock, $0.01 par value


þ o


o


þ o






DOCUMENTS INCORPORATED BY REFERENCE












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Table of Contents







|              |  |                                                                                                                      |    |      |    | 
|------------- |  | -------------------------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|              |  |                                                                                                                      |    | Page |   
|              |  |                                                                                                                      |    |      |   
|PART I:       |  |                                                                                                                      | 1  |     
|Item 1.       |  | BUSINESS                                                                                                             |    |      | 1  | 
|Item 2.       |  | PROPERTIES                                                                                                           |    |      | 11 | 
|Item 3.       |  | LEGAL PROCEEDINGS                                                                                                    |    |      | 11 | 
|Item 4.       |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS                                                              |    |      | 12 | 
|             
|PART II:      |  |                                                                                                                      | 12 |     
|Item 5.       |  | MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES |    |      | 12 | 
|Item 6.       |  | SELECTED FINANCIAL DATA                                                                                              |    |      | 13 | 
|Item 7.       |  | MANAGEMENTS DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                            |    |      | 14 | 
|Item 7A.      |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES
    ABOUT MARKET RISK                                                       |    |      | 38 | 
|Item 8.       |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY
    DATA                                                                      |    |      | 39 | 
|Item 9.       |  | CHANGES IN AND DISAGREEMENTS WITH
    ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                             |    |      | 85 | 
|Item 9A.      |  | CONTROLS AND PROCEDURES                                                                                              |    |      | 85 | 
|Item 9B.      |  | OTHER INFORMATION                                                                                                    |    |      | 85 | 
|             
|PART III:     |  |                                                                                                                      | 85 |     
|Item 10.      |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE
    REGISTRANT                                                               |    |      | 85 | 
|Item 11.      |  | EXECUTIVE COMPENSATION                                                                                               |    |      | 86 | 
|Item 12.      |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
    OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                   |    |      | 86 | 
|Item 13.      |  | CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS                                                                   |    |      | 86 | 
|Item 14.      |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                               |    |      | 86 | 
|             
|PART IV:      |  |                                                                                                                      | 86 |     
|Item 15.      |  | EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES                                                                       |    |      | 86 | 
|              |  | SIGNATURES                                                                                                           |    |      | 87 | 
|EXHIBIT 10.19
|EXHIBIT 10.26
|EXHIBIT 10.28
|EXHIBIT 10.29
|EXHIBIT 10.30
|EXHIBIT 10.31
|EXHIBIT 10.32
|EXHIBIT 10.33
|EXHIBIT 10.34
|EXHIBIT 23.1 
|EXHIBIT 31.1 
|EXHIBIT 31.2 
|EXHIBIT 32.1 
|EXHIBIT 32.2 





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##### Table of Contents






PART I







|        |         
|------- | --------
|ITEM 1. | BUSINESS

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS


This annual report on Form 10-K contains forward-looking
statements. In some cases, you can identify forward-looking
statements by terminology such as may,
will, should, expects,
plans, target, anticipates,
believes, estimates,
predicts, potential,
continues or the negative of these terms or other
comparable terminology. These statements are only predictions
and speak only as of the date of this report. These
forward-looking statements are based largely on our current
expectations and are subject to a number of risks and
uncertainties. Actual results could differ materially from these
forward-looking statements. Factors that could cause or
contribute to such differences include general economic and
political uncertainty, conditions in the semiconductor industry,
changes in the conditions affecting our target markets,
manufacturing underutilization, fluctuations in customer demand,
raw material costs, exchange rates, timing and success of new
products, competitive conditions in the semiconductor industry
risks associated with international operations, the other
factors identified under Factors that May Affect Our
Business and Future Results in Managements
Discussion and Analysis of Financial Condition and Results of
Operations and other risks and uncertainties indicated
from time to time in our filings with the U.S. Securities
and Exchange Commission (SEC). In light of these risks and
uncertainties, there can be no assurance that the matters
referred to in the forward-looking statements contained in this
annual report will in fact occur. We do not intend to publicly
release any revisions to these forward-looking statements to
reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.


Overview






1



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Products and Services






| |                                                             
| | ------------------------------------------------------------
| | Integrated Mixed Signal Products (56.2% of 2004
    revenue)



Sensor Interfaces.


2



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Controls.


Communication Products.




| |                                                    
| | ---------------------------------------------------
| | Structured Digital Products (23.1% of 2004 revenue)





tm tm tm tm


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| |                                                          
| | ---------------------------------------------------------
| | Mixed Signal Foundry Services (20.7% of 2004
    revenue)



3



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Customers, Markets and Applications




|                               |  |                                                      |  |                                                            |  |                                                                  |  |                                                               |  |                                                    |  |                                          
|------------------------------ |  | ---------------------------------------------------- |  | ---------------------------------------------------------- |  | ---------------------------------------------------------------- |  | ------------------------------------------------------------- |  | -------------------------------------------------- |  | -----------------------------------------
|                               |  |                                                      |  |                                                            |  |                                                                  |  |                                                               |  |                                                    |  | Computing,                               
|                               |  |                                                      |  |                                                            |  |                                                                  |  |                                                               |  |                                                    |  | Consumer                                 
|End Markets                    |  | Automotive                                           |  | Industrial                                                 |  | Communications                                                   |  | Medical                                                       |  | Military                                           |  | and Other                                
|                               |  |                                                      |  |                                                            |  |                                                                  |  |                                                               |  |                                                    |  |                                          
|Percentage of revenue for 2004 |  | 25.9%                                                |  | 21.8%                                                      |  | 19.6%                                                            |  | 12.5%                                                         |  | 7.1%                                               |  | 13.1%                                    
|Applications                   |  | Digital compass Engine management Headlight controls |  | Industrial networking Circuit protection Wireless security |  | Broadband analog Wireless base stations
    Switches
    Routers |  | Medical imaging Pacemakers Blood glucose Monitor Hearing aids |  | Cockpit displays Missile guidance Infrared imaging |  | Printers Power management Storage systems



Sales, Marketing and Distribution








4



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Research and Development






Intellectual Property








5



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| |   |                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------
| |  | discontinue using certain process technologies which could cause
    us to stop manufacturing certain semiconductors;           
|
| |  | pay substantial monetary damages;                                                                                               
|
| |  | seek to develop non-infringing technologies, which may not be
    feasible; or                                                  
|
| |  | seek to acquire licenses to the infringed technology which may
    not be available on commercially reasonable terms, if at all.



Manufacturing






tm tm tm tm


6



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|           |  |                                                             |  |           |         |     |          |  |    |    
|---------- |  | ----------------------------------------------------------- |  | --------- | ------- | --- | -------- |  | -- | ---
|           |  |                                                             |  | Installed |         |     |         
|           |  |                                                             |  | Annual    |         |     |         
|           |  |                                                             |  | Equipment |         |     | Wafer    | 
|Location   |  | Products/ Functions                                         |  | Capacity  |         |     | Diameter | 
|           |  |                                                             |  |           |         |     |          | 
|Pocatello  |  | CMOS Wafers, 1 micron and above, 2 to 3 metal levels        |  |           | 170,000 |     |          |  | 5 |    
|           |  | CMOS Wafers, 0.6 micron to 1 micron, 2 to 3 metal levels    |  |           | 110,000 |     |          |  | 5 |    
|Pocatello  |  | CMOS Wafers, 0.35 micron to 0.8 micron, 2 to 5 metal levels |  |           | 60,000  | (1) |          |  | 8 |    
|Oudenaarde |  | BiCMOS Wafers, 1 micron, 2 metal levels                     |  |           | 153,000 |     |          |  | 4 |    
|Oudenaarde |  | BiCMOS Wafers, 0.35 micron to 1 micron, 2 to 5 metal levels |  |           | 112,000 | (2) |          |  | 6 | (3)






|    |                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------
|(1) | By adding additional equipment, production capacity at our
    8-inch fab could be increased to 225,000 wafers per year.
|   
|(2) | By adding additional equipment, production capacity at our
    6-inch fab could be increased to 175,000 wafers per year.
|   
|(3) | The equipment at our 6-inch fab can be scaled to 8-inch wafers.                                                         





Backlog




7



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Seasonality




Competition










8



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Employees




Environmental Matters








9



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Executive Officers




|                   |  |     |    |  |       |                                                   
|------------------ |  | --- | -- |  | ----- | --------------------------------------------------
|Name               |  | Age |    |  | Title
|                   |  |     |    |  |      
|Executive Officers |  |     |    |  |       |                                                   
|Christine King     |  |     | 55 |  |       | President and Chief Executive Officer             
|Walter Mattheus    |  |     | 57 |  |       | Senior Vice President and Chief Operating Officer 
|David A. Henry     |  |     | 43 |  |       | Senior Vice President and Chief Financial Officer 
|Jon Stoner         |  |     | 48 |  |       | Senior Vice President and Chief Technology Officer
|Charlie Lesko      |  |     | 46 |  |       | Senior Vice President, Sales & Marketing          

Christine King, President, Chief Executive Officer and
Director.


Walter Mattheus, Senior Vice President and Chief Operating
Officer.


David A. Henry, Senior Vice President and Chief Financial
Officer.


Jon Stoner, Senior Vice President and Chief Technology
Officer.


Charlie Lesko, Senior Vice President, Sales and
Marketing.


10



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Available Information


www.sec.gov


www.amis.com/investor  relations/









|        |           
|------- | ----------
|ITEM 2. | PROPERTIES
















|        |                  
|------- | -----------------
|ITEM 3. | LEGAL PROCEEDINGS



11



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|        |                                                    
|------- | ---------------------------------------------------
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS






PART II







|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES



|                                                                  |  |      |       |  |     |   |       | 
|----------------------------------------------------------------- |  | ---- | ----- |  | --- | - | ----- | 
|                                                                  |  | High |       |  | Low |  
|                                                                  |  |      |       |  |     |  
|2005                                                              |  |      |       |  |     |   |       | 
|First Quarter (from January 1, 2005 to February 28,
    2005)     |  | $    | 16.45 |  |     | $ | 10.39 | 
|2004                                                              |  |      |       |  |     |   |       | 
|Fourth Quarter (from September 26, 2004 to
    December 31, 2004) |  | $    | 17.26 |  |     | $ | 12.90 | 
|Third Quarter (from June 27, 2004 to September 25,
    2004)      |  | $    | 17.40 |  |     | $ | 11.01 | 
|Second Quarter (from March 28, 2004 to June 26, 2004)             |  | $    | 18.52 |  |     | $ | 14.25 | 
|First Quarter (from January 1, 2004 to March 27, 2004)            |  | $    | 20.20 |  |     | $ | 15.22 | 
|2003                                                              |  |      |       |  |     |   |       | 
|Fourth Quarter (from September 28, 2003 to
    December 31, 2003) |  | $    | 21.80 |  |     | $ | 16.42 | 
|Third Quarter (from September 24, 2003 to
    September 27, 2003) |  | $    | 21.85 |  |     | $ | 19.37 | 





Dividend Policy




12



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|        |                        
|------- | -----------------------
|ITEM 6. | SELECTED FINANCIAL DATA



|                                                                  |  |                                                         |       |  |      |   |       |      |  |   |        |   |  |      |        |   |  |   |        |  
|----------------------------------------------------------------- |  | ------------------------------------------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ------ | - |  | ---- | ------ | - |  | - | ------ | -
|                                                                  |  | Years Ended December 31,                                |      
|                                                                  |  |                                                         |      
|                                                                  |  | 2004                                                    |       |  | 2003 |   |       | 2002 |  |   | 2001   |   |  | 2000 |       
|                                                                  |  |                                                         |       |  |      |   |       |      |  |   |        |   |  |      |       
|                                                                  |  | (In millions, except per share and percent information) |      
|Consolidated Statement of Operations Data:                        |  |                                                         |       |  |      |   |       |      |  |   |        |   |  |      |        |   |  |   |        |  
|Revenue                                                           |  | $                                                       | 517.3 |  |      | $ | 454.2 |      |  | $ | 345.3  |   |  | $    | 326.5  |   |  | $ | 382.2  |  
|Gross profit                                                      |  |                                                         | 246.3 |  |      |   | 198.8 |      |  |   | 130.3  |   |  |      | 140.1  |   |  |   | 179.5  |  
|Net income (loss)                                                 |  |                                                         | 52.4  |  |      |   | (0.4  | )    |  |   | 5.1    |   |  |      | 12.7   |   |  |   | 33.6   |  
|Net income (loss) attributable to common stockholders             |  | $                                                       | 52.4  |  |      | $ | (46.7 | )    |  | $ | (57.4  | ) |  | $    | (34.9  | ) |  | $ | 32.4   |  
|Basic net income (loss) per common share(1)                       |  | $                                                       | 0.63  |  |      | $ | (0.84 | )    |  | $ | (1.24  | ) |  | $    | (0.76  | ) |  |   |       |  
|                                                                  |  |                                                         |       |  |      |   |       |      |  |   |        |   |  |      |       
|Fully diluted net income (loss) per common share(1)               |  | $                                                       | 0.60  |  |      | $ | (0.84 | )    |  | $ | (1.24  | ) |  | $    | (0.76  | ) |  |   |       |  
|                                                                  |  |                                                         |       |  |      |   |       |      |  |   |        |   |  |      |       
|Consolidated Balance Sheet Data (end of the period):              |  |                                                         |       |  |      |   |       |      |  |   |        |   |  |      |        |   |  |   |        |  
|Cash                                                              |  | $                                                       | 161.7 |  |      | $ | 119.1 |      |  | $ | 62.2   |   |  | $    | 28.7   |   |  | $ | 20.1   |  
|Accounts receivable, net                                          |  |                                                         | 78.6  |  |      |   | 73.6  |      |  |   | 66.0   |   |  |      | 36.2   |   |  |   | 50.9   |  
|Inventories                                                       |  |                                                         | 52.2  |  |      |   | 45.6  |      |  |   | 39.4   |   |  |      | 26.0   |   |  |   | 41.7   |  
|Total assets                                                      |  |                                                         | 643.2 |  |      |   | 550.1 |      |  |   | 502.5  |   |  |      | 384.3  |   |  |   | 427.6  |  
|Long-term liabilities                                             |  |                                                         | 2.4   |  |      |   | 0.4   |      |  |   | 3.1    |   |  |      | 3.4    |   |  |   | 3.5    |  
|Long-term debt, including current portion(2)                      |  |                                                         | 253.5 |  |      |   | 254.7 |      |  |   | 160.1  |   |  |      | 173.3  |   |  |   | 175.0  |  
|Series A Senior Redeemable Preferred Stock                        |  |                                                         |      |  |      |   |      |      |  |   | 233.7  |   |  |      | 204.2  |   |  |   | 178.7  |  
|Series B Junior Redeemable Convertible Preferred Stock            |  |                                                         |      |  |      |   |      |      |  |   | 190.5  |   |  |      | 164.9  |   |  |   | 143.0  |  
|Series C Senior Redeemable Preferred Stock                        |  |                                                         |      |  |      |   |      |      |  |   | 79.3   |   |  |      |       |   |  |   |       |  
|Total stockholders equity (deficit) and divisional
    equity(3) |  |                                                         | 286.1 |  |      |   | 205.0 |      |  |   | (240.4 | ) |  |      | (189.2 | ) |  |   | (153.5 | )

13



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|                              |  |                                                         |      |   |      |   |      |      |  |   |      |   |  |      |      |   |  |   |      |  
|----------------------------- |  | ------------------------------------------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | - |  | ---- | ---- | - |  | - | ---- | -
|                              |  | Years Ended December 31,                                |     
|                              |  |                                                         |     
|                              |  | 2004                                                    |      |   | 2003 |   |      | 2002 |  |   | 2001 |   |  | 2000 |     
|                              |  |                                                         |      |   |      |   |      |      |  |   |      |   |  |      |     
|                              |  | (In millions, except per share and percent information) |     
|Other Financial Data:         |  |                                                         |      |   |      |   |      |      |  |   |      |   |  |      |      |   |  |   |      |  
|Gross profit margin           |  |                                                         | 47.6 | % |      |   | 43.8 | %    |  |   | 37.7 | % |  |      | 42.9 | % |  |   | 47.0 | %
|Research and development      |  | $                                                       | 77.2 |   |      | $ | 70.2 |      |  | $ | 52.1 |   |  | $    | 42.1 |   |  | $ | 35.4 |  
|Depreciation and amortization |  | $                                                       | 43.8 |   |      | $ | 44.8 |      |  | $ | 47.0 |   |  | $    | 44.1 |   |  | $ | 35.5 |  
|Capital expenditures          |  | $                                                       | 32.4 |   |      | $ | 26.6 |      |  | $ | 22.0 |   |  | $    | 20.7 |   |  | $ | 52.0 |  
|Operating cash flow           |  | $                                                       | 96.2 |   |      | $ | 70.7 |      |  | $ | 81.1 |   |  | $    | 42.6 |   |  | $ | 64.3 |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Loss per common share is not a meaningful measure for any
    periods presented other than the years ended December 31,
    2004, 2003, 2002 and 2001 due to our capital structure discussed
    in footnote 2 below and, as such, is not presented for any
    other period.                                                                                                                                                                                                                                                                                                                 
|   
|(2) | From January 1, 1998 through July 29, 2000, we
    operated as American Microsystems, Inc., a division of a
    subsidiary of Nippon Mining Holdings Inc. (Nippon Mining). As
    such, we did not have separate legal status or existence. No
    long-term debt was outstanding to third parties. From
    July 29, 2000 to December 21, 2000, we operated as a
    wholly-owned subsidiary of our former parent. Effective
    December 21, 2000, we issued notes payable to third parties
    for a total of $175.0 million with a term of six years, as
    part of our recapitalization.
|   
|(3) | For the period from January 1, 1998 through July 29,
    2000, as discussed in footnote 2 above, we operated as a
    division of our former parent. Therefore, during that period we
    had divisional equity rather than stockholders equity.                                                                                                                                                                                                                                                                                                                                             






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with,
and is qualified in its entirety by reference to, the attached
consolidated financial statements. Except for the historical
information contained herein, the discussions in this section
contain forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those
discussed below due to a number of factors, including the
factors identified under Factors that May Affect Our
Business and Future Results in Managements
Discussion and Analysis of Financial Condition and Results of
Operations or elsewhere in this report, and other risks
and uncertainties indicated from time to time in our filings
with the SEC.


Overview






14



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Critical Accounting Policies








| |                    
| | -------------------
| | Revenue Recognition







15



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| |            
| | -----------
| | Inventories







| |                                                    
| | ---------------------------------------------------
| | Property, Plant and Equipment and Intangible Assets



16



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| |         
| | --------
| | Goodwill







| |             
| | ------------
| | Income Taxes





| |              
| | -------------
| | Stock Options



17



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| |                      
| | ---------------------
| | Results of Operations



Statement of Operations Data:


|                                     |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |   |       |       |   |  |       |      |   
|------------------------------------ | ----------------------------------------------------- | ------------------------ | ----- | ----- | ---- |  | ----- | ---- | -- | - | ----- | ----- | - |  | ----- | ---- | -- | - | ----- | ----- | - |  | ----- | ---- | --
|                                     |                                                       | Years Ended December 31, |      
|                                     |                                                       |                          |      
|                                     |                                                       | 2004                     |       |       | 2003 |  |       | 2002 |   
|                                     |                                                       |                          |       |       |      |  |       |      |   
|                                     |                                                       | (Dollars in Millions)    |      
|Revenue                              |                                                       | $                        | 517.3 |       |      |  | 100.0 | %    |    | $ | 454.2 |       |   |  | 100.0 | %    |    | $ | 345.3 |       |   |  | 100.0 | %   
|Gross profit                         |                                                       |                          | 246.3 |       |      |  | 47.6  | %    |    |   | 198.8 |       |   |  | 43.8  | %    |    |   | 130.3 |       |   |  | 37.7  | %   
|Operating expenses:                  |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |   |       |       |   |  |       |     
|                                     | Research and development                              |                          |       | 77.2  |      |  |       | 14.9 | %  |   |       | 70.2  |   |  |       | 15.5 | %  |   |       | 52.1  |   |  |       | 15.1 | % 
|                                     | Marketing and selling                                 |                          |       | 43.0  |      |  |       | 8.3  | %  |   |       | 37.8  |   |  |       | 8.3  | %  |   |       | 35.0  |   |  |       | 10.1 | % 
|                                     | General and administrative                            |                          |       | 28.7  |      |  |       | 5.5  | %  |   |       | 22.7  |   |  |       | 5.0  | %  |   |       | 16.9  |   |  |       | 4.9  | % 
|                                     | Amortization of acquisition-related intangible assets |                          |       | 1.3   |      |  |       | 0.3  | %  |   |       | 4.8   |   |  |       | 1.1  | %  |   |       | 8.1   |   |  |       | 2.3  | % 
|                                     | In-process research and development                   |                          |       | 1.5   |      |  |       | 0.3  | %  |   |       |      |   |  |       | 0.0  | %  |   |       |      |   |  |       | 0.0  | % 
|                                     | Restructuring and impairment charges                  |                          |       | 7.9   |      |  |       | 1.5  | %  |   |       | 21.7  |   |  |       | 4.8  | %  |   |       | 0.6   |   |  |       | 0.2  | % 
|                                     | Nonrecurring charges                                  |                          |       |      |      |  |       | 0.0  | %  |   |       | 11.4  |   |  |       | 2.5  | %  |   |       |      |   |  |       | 0.0  | % 
|                                     |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |  
|                                     | Total operating expenses                              |                          |       | 159.6 |      |  |       | 30.9 | %  |   |       | 168.6 |   |  |       | 37.1 | %  |   |       | 112.7 |   |  |       | 32.6 | % 
|                                     |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |  
|Operating income                     |                                                       |                          | 86.7  |       |      |  | 16.8  | %    |    |   | 30.2  |       |   |  | 6.6   | %    |    |   | 17.6  |       |   |  | 5.1   | %   
|                                     |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |  
|Other income (expense):              |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |   |       |       |   |  |       |     
|                                     | Interest expense, net                                 |                          |       | (18.6 | )    |  |       | (3.6 | )% |   |       | (22.5 | ) |  |       | (5.0 | )% |   |       | (11.5 | ) |  |       | (3.3 | )%
|                                     | Other income (expense), net                           |                          |       | (0.7  | )    |  |       | (0.1 | )% |   |       | (16.2 | ) |  |       | (3.6 | )% |   |       | 0.2   |   |  |       | 0.1  | % 
|                                     |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |  
|Income (loss) before income taxes    |                                                       |                          | 67.4  |       |      |  | 13.0  | %    |    |   | (8.5  | )     |   |  | (1.9  | )%   |    |   | 6.3   |       |   |  | 1.8   | %   
|Provision (benefit) for income taxes |                                                       |                          | 15.0  |       |      |  | 2.9   | %    |    |   | (8.1  | )     |   |  | (1.8  | )%   |    |   | 1.2   |       |   |  | 0.3   | %   
|                                     |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |  
|Net income (loss)                    |                                                       | $                        | 52.4  |       |      |  | 10.1  | %    |    | $ | (0.4  | )     |   |  | (0.1  | )%   |    | $ | 5.1   |       |   |  | 1.5   | %   
|                                     |                                                       |                          |       |       |      |  |       |      |    |   |       |       |   |  |       |      |    |  

18



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Year Ended December 31, 2004 Compared With Year Ended
December 31, 2003




| |        
| | -------
| | Revenue







tm






|              |  |      |      |   |      |  |      |  
|------------- |  | ---- | ---- | - | ---- |  | ---- | -
|              |  | 2004 |      |   | 2003 | 
|              |  |      |      |   |      | 
|North America |  |      | 42.1 | % |      |  | 40.9 | %
|Europe        |  |      | 41.3 | % |      |  | 40.7 | %
|Asia          |  |      | 16.6 | % |      |  | 18.4 | %



| |             
| | ------------
| | Gross Profit



19



---



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| |                   
| | ------------------
| | Operating Expenses















20



---



##### Table of Contents











| |                 
| | ----------------
| | Operating Income











| |                     
| | --------------------
| | Net Interest Expense





| |              
| | -------------
| | Other Expense





| |             
| | ------------
| | Income Taxes



21



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Year Ended December 31, 2003 Compared With Year Ended
December 31, 2002




| |        
| | -------
| | Revenue









tm




|              |  |      |      |   |      |  |      |  
|------------- |  | ---- | ---- | - | ---- |  | ---- | -
|              |  | 2003 |      |   | 2002 | 
|              |  |      |      |   |      | 
|North America |  |      | 40.9 | % |      |  | 55.5 | %
|Europe        |  |      | 40.7 | % |      |  | 24.5 | %
|Asia          |  |      | 18.4 | % |      |  | 20.0 | %





| |             
| | ------------
| | Gross Profit

tm


22



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| |                   
| | ------------------
| | Operating Expenses



















| |                 
| | ----------------
| | Operating Income





23



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| |                     
| | --------------------
| | Net Interest Expense





| |                  
| | -----------------
| | Net Other Expense





| |             
| | ------------
| | Income Taxes



Liquidity and Capital Resources




3 4


24



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3 4










| |                     
| | --------------------
| | Capital Expenditures



Contractual Obligations and Contingent Liabilities and
Commitments




25



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Cash Payments Due by Period


|                                   |  |               |       |  |        |   |     |           |  |       |           |  |  |         |       |  |  |   |       | 
|---------------------------------- |  | ------------- | ----- |  | ------ | - | --- | --------- |  | ----- | --------- |  |  | ------- | ----- |  |  | - | ----- | 
|                                   |  |               |       |  |        |   |     |           |  | After |          
|                                   |  | Total         |       |  | 1 Year |   |     | 2-3 Years |  |       | 4-5 Years |  |  | 5 Years |      
|                                   |  |               |       |  |        |   |     |           |  |       |           |  |  |         |      
|                                   |  | (In millions) |       |  |       
|Senior term loan                   |  | $             | 123.4 |  |        | $ | 1.3 |           |  | $     | 2.5       |  |  | $       | 119.6 |  |  | $ |      | 
|Senior subordinated notes          |  |               | 130.0 |  |        |   |    |           |  |       |          |  |  |         |      |  |  |   | 130.0 | 
|                                   |  |               |       |  |        |   |     |           |  |       |           |  |  |         |      
|Total long-term debt               |  |               | 253.4 |  |        |   | 1.3 |           |  |       | 2.5       |  |  |         | 119.6 |  |  |   | 130.0 | 
|Operating leases                   |  |               | 16.4  |  |        |   | 5.0 |           |  |       | 5.8       |  |  |         | 3.5   |  |  |   | 2.1   | 
|Other long-term obligations, net   |  |               | 19.4  |  |        |   | 2.9 |           |  |       | 6.9       |  |  |         | 6.2   |  |  |   | 3.4   | 
|                                   |  |               |       |  |        |   |     |           |  |       |           |  |  |         |      
|Total contractual cash obligations |  | $             | 289.2 |  |        | $ | 9.2 |           |  | $     | 15.2      |  |  | $       | 129.3 |  |  | $ | 135.5 | 
|                                   |  |               |       |  |        |   |     |           |  |       |           |  |  |         |      



Recent Accounting Pronouncements






26



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Accounting for Nonmonetary Transactions,




Outlook






27



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Factors that May Affect our Business and Future Results




Risks Relating to Our Company and the Semiconductor
Industry




| |                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The cyclical nature of the semiconductor industry may
    limit our ability to maintain or increase revenue and profit
    levels, which could have a material adverse effect on our
    results of operations and financial condition.







| |                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | Due to our relatively fixed cost structure, our margins
    will be adversely affected if we experience a significant
    decline in customer orders.



28



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| |                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A significant portion of our revenue comes from a
    relatively limited number of customers and devices, the loss of
    which could adversely affect our results of operations and
    financial condition.





| |                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our customers may cancel their orders, change production
    quantities or delay production, which could have a material
    adverse effect on our results of operations and financial
    condition.





| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not be able to sell the inventories of products on
    hand, which could have a material adverse effect on our results
    of operations and financial condition.





| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | We depend on our key personnel, and the loss of these
    personnel could have a material effect on our business.



29



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| |                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | We depend on successful technological advances for growth,
    and a lack of such advances could have a material adverse effect
    on our business.





| |                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We depend on growth in the end markets that use our
    products, and a lack of growth in these markets could have a
    material adverse effect on our results of operations and
    financial condition.





| |   |                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | recessionary periods or periods of reduced growth in our
    customers markets;                                                                              
|
| |  | the inability of our customers to adapt to rapidly changing
    technology and evolving industry standards;                                                   
|
| |  | the potential that our customers products may become
    obsolete or the failure of our customers products to gain
    widespread commercial acceptance; and
|
| |  | the possibility of reduced consumer demand for our
    customers products.                                                                                   



| |                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our industry is highly competitive, and a failure to
    successfully compete could have a material adverse effect on our
    results of operations and financial condition.





| |   |                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------
| |  | our ability to offer cost-effective products on a timely basis
    using our technologies;                                           
|
| |  | our ability to accurately identify emerging technological trends
    and demand for product features and performance characteristics;
|
| |  | product introductions by our competitors;                                                                                            
|
| |  | our ability to adopt or adapt to emerging industry standards;                                                                        
|
| |  | the number and nature of our competitors in a given
    market; and                                                                  
|
| |  | general market and economic conditions.                                                                                              



30



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| |                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may incur costs to engage in future acquisitions of
    companies or technologies and the anticipated benefits of those
    acquisitions may never be realized, which could have a material
    adverse effect on our results of operations and financial
    condition.





| |   |                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | potential inability to maximize our financial or strategic
    position, which could result in impairment charges if the
    acquired company or assets are later worth less than the amount
    paid for them in the acquisition;
|
| |  | difficulties in assimilating the operations and products of an
    acquired business or in realizing projected efficiencies, cost
    savings and revenue synergies;                                                              
|
| |  | entry into markets or countries in which we may have limited or
    no experience;                                                                                                                                                
|
| |  | potential increases in our indebtedness and contingent
    liabilities and potential unknown liabilities associated with
    any such acquisition;                                                                                
|
| |  | diversion of managements attention due to transition or
    integration issues;                                                                                                                                                  
|
| |  | difficulties in managing multiple geographic locations;                                                                                                                                                                           
|
| |  | cultural impediments that could prevent establishment of good
    employee relations, difficulties in retaining key personnel of
    the acquired business and potential litigation from terminated
    employees; and            
|
| |  | difficulties in maintaining uniform standards, controls and
    procedures and information systems.                                                                                                                               





Risks Relating to Manufacturing




| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our success depends on efficient utilization of our
    manufacturing capacity, and a failure could have a material
    adverse effect on our results of operations and financial
    condition.



31



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| |                                                                                     
| | ------------------------------------------------------------------------------------
| | We could be adversely affected by manufacturing
    interruptions or reduced yields.





| |                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may face product warranty or product liability claims
    that are disproportionately higher than the value of the
    products involved, which could have a material adverse effect on
    our results of operations and financial condition.





| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are dependent on successful outsourcing relationships,
    which dependence could have a material adverse effect on our
    results of operations and financial condition.





| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on test subcontractors, which reliance could have
    a material adverse effect on our results of operations and
    financial condition.



32



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| |                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on packaging subcontractors, which reliance could
    have a material adverse effect on our results of operations and
    financial condition.





| |                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We depend on successful parts and materials procurement
    for our manufacturing processes, which dependence could have a
    material adverse effect on our results of operations and
    financial condition.





| |                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may need to raise additional capital that may not be
    available, which could have a material adverse effect on our
    results of operations and financial condition.





| |                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our ability to compete successfully and achieve future
    growth will depend, in part, on our ability to protect our
    proprietary technology, as well as our ability to operate
    without infringing the proprietary rights of others, and our
    inability could have a material adverse effect on our
    business.



33



---



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| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |  | discontinue using certain process technologies which could cause
    us to stop manufacturing certain semiconductors;            
|
| |  | pay substantial monetary damages;                                                                                                
|
| |  | seek to develop non-infringing technologies, which may not be
    feasible; or                                                   
|
| |  | seek to acquire licenses to the infringed technology, which may
    not be available on commercially reasonable terms, if at all.







| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We could incur material costs to comply with environmental
    laws, which could have a material adverse effect on our results
    of operations and financial condition.



34



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Risks Relating to Our International Operations




| |                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our international sales and operations expose us to
    various political and economic risks, which could have a
    material adverse effect on our results of operations and
    financial condition.





| |   |                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------
| |  | greater difficulty in staffing and managing foreign operations;                                                                                 
|
| |  | greater risk of uncollectible accounts;                                                                                                         
|
| |  | longer collection cycles;                                                                                                                       
|
| |  | logistical and communications challenges;                                                                                                       
|
| |  | potential adverse changes in laws and regulatory practices,
    including export license requirements, trade barriers, tariffs
    and tax laws;
|
| |  | changes in labor conditions;                                                                                                                    
|
| |  | burdens and costs of compliance with a variety of foreign laws;                                                                                 
|
| |  | political and economic instability;                                                                                                             
|
| |  | increases in duties and taxation;                                                                                                               
|
| |  | greater difficulty in protecting intellectual property; and                                                                                     
|
| |  | general economic and political conditions in these foreign
    markets.                                                                         



| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are subject to risks associated with currency
    fluctuations, which could have a material adverse effect on our
    results of operations and financial condition.



35



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| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are exposed to foreign labor laws due to our
    operational presence in Europe, which could have a material
    adverse effect on our results of operations and financial
    condition.



Risks Relating to Our Substantial Debt




| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | Our substantial consolidated indebtedness could adversely
    affect our financial health.







| |   |                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | will require our operating subsidiaries to dedicate a
    substantial portion of cash flow from operations to payments in
    respect of indebtedness, thereby reducing the availability of
    cash flow to fund working capital, capital expenditures,
    research and development efforts and other general corporate
    purposes;
|
| |  | could increase the amount of our consolidated interest expense
    because some of our borrowings are at variable rates of
    interest, which, if interest rates increase, could result in
    higher interest expense;                                                                                                               
|
| |  | will increase our vulnerability to adverse general economic or
    industry conditions;                                                                                                                                                                                                                                                
|
| |  | could limit our flexibility in planning for, or reacting to,
    changes in our business or the industry in which we operate;                                                                                                                                                                                                          
|
| |  | could restrict us from making strategic acquisitions,
    introducing new technologies or exploiting business
    opportunities;                                                                                                                                                                                                       
|
| |  | could place us at a competitive disadvantage compared to our
    competitors that have less debt; and                                                                                                                                                                                                                                  
|
| |  | could limit, along with the financial and other restrictive
    covenants in our indebtedness, among other things, our ability
    to borrow additional funds or dispose of assets.                                                                                                                                                    





| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | To service our consolidated indebtedness, we will require
    a significant amount of cash.



36



---



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| |   |                                                                                             
| | - | --------------------------------------------------------------------------------------------
| |  | the cyclical nature of both the semiconductor industry and the
    markets for our products;
|
| |  | fluctuations in manufacturing yields;                                                       
|
| |  | the timing of introduction of new products;                                                 
|
| |  | the timing of customer orders;                                                              
|
| |  | changes in the mix of products sold and the end markets into
    which they are sold;       
|
| |  | the extent of utilization of manufacturing capacity;                                        
|
| |  | the length of the lifecycle of the semiconductors we are
    manufacturing;                 
|
| |  | availability of supplies and raw materials;                                                 
|
| |  | price competition and other competitive factors; and                                        
|
| |  | work stoppages, especially at our fabs in Belgium.                                          





| |                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------
| | Restrictions imposed by the senior credit facilities and
    the senior subordinated notes limit our ability to take certain
    actions.





37



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|         |                                                               
|-------- | --------------------------------------------------------------
|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK











3 4


38



---



##### Table of Contents








|        |                                            
|------- | -------------------------------------------
|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS


|                                                                                           |  |      |    | 
|------------------------------------------------------------------------------------------ |  | ---- | -- | 
|                                                                                           |  | Page |   
|                                                                                           |  |      |   
|Managements Report on Internal
    Controls over Financial Reporting                      |  |      | 40 | 
|Report of Independent Registered Public
    Accounting Firm                                |  |      | 41 | 
|Consolidated Balance Sheets                                                                |  |      | 43 | 
|Consolidated Statements of
    Operations                                                  |  |      | 44 | 
|Consolidated Statements of
    Stockholders Equity (Deficit) and Comprehensive
    Income |  |      | 45 | 
|Consolidated Statements of Cash
    Flows                                                  |  |      | 46 | 
|Notes to Consolidated Financial
    Statements                                             |  |      | 47 | 

39



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##### Table of Contents






MANAGEMENTS REPORT ON INTERNAL CONTROLS OVER FINANCIAL
REPORTING








40



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The Board of Directors and Stockholders


AMIS Holdings, Inc.
















| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





41



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##### Table of Contents






REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















| |                          
| | -------------------------
| | /s/ ERNST & YOUNG
    LLP





42



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |   |          |         | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | --------------------------- | -------- | ------- | ---- | - | -------- | ------- | 
|                                                                                                                                                                                              |                                                                                                           | December 31,                |         
|                                                                                                                                                                                              |                                                                                                           |                             |         
|                                                                                                                                                                                              |                                                                                                           | 2004                        |          |         | 2003 |  
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  
|                                                                                                                                                                                              |                                                                                                           | (In thousands, except share |         
|                                                                                                                                                                                              |                                                                                                           | data)                       |         
|ASSETS                                                                                                                                                                                       
|Current assets:                                                                                                                                                                               |                                                                                                           |                             |          |         |      |   |          |        
|                                                                                                                                                                                              | Cash and cash equivalents                                                                                 |                             | $        | 161,661 |      |   | $        | 119,063 | 
|                                                                                                                                                                                              | Accounts receivable, less allowances of $3,075 and $2,930 at
    December 31, 2004 and 2003, respectively |                             |          | 78,624  |      |   |          | 73,585  | 
|                                                                                                                                                                                              | Inventories                                                                                               |                             |          | 52,231  |      |   |          | 45,599  | 
|                                                                                                                                                                                              | Deferred tax assets                                                                                       |                             |          | 6,518   |      |   |          | 6,653   | 
|                                                                                                                                                                                              | Prepaid expenses                                                                                          |                             |          | 17,201  |      |   |          | 11,724  | 
|                                                                                                                                                                                              | Other current assets                                                                                      |                             |          | 12,901  |      |   |          | 9,053   | 
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  
|Total current assets                                                                                                                                                                          |                                                                                                           |                             | 329,136  |         |      |   | 265,677  |        
|Property, plant and equipment, net                                                                                                                                                            |                                                                                                           |                             | 199,243  |         |      |   | 205,909  |        
|Goodwill, net                                                                                                                                                                                 |                                                                                                           |                             | 16,849   |         |      |   | 1,211    |        
|Intangible assets, net                                                                                                                                                                        |                                                                                                           |                             | 35,146   |         |      |   | 9,718    |        
|Deferred tax assets                                                                                                                                                                           |                                                                                                           |                             | 39,614   |         |      |   | 40,961   |        
|Other assets                                                                                                                                                                                  |                                                                                                           |                             | 23,257   |         |      |   | 26,612   |        
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  
|Total assets                                                                                                                                                                                  |                                                                                                           | $                           | 643,245  |         |      | $ | 550,088  |        
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                         
|Current liabilities:                                                                                                                                                                          |                                                                                                           |                             |          |         |      |   |          |        
|                                                                                                                                                                                              | Current portion of long-term debt                                                                         |                             | $        | 1,250   |      |   | $        | 1,250   | 
|                                                                                                                                                                                              | Accounts payable                                                                                          |                             |          | 37,618  |      |   |          | 34,753  | 
|                                                                                                                                                                                              | Accrued expenses and other current liabilities                                                            |                             |          | 62,461  |      |   |          | 54,185  | 
|                                                                                                                                                                                              | Income taxes payable                                                                                      |                             |          | 1,270   |      |   |          | 1,088   | 
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  
|Total current liabilities                                                                                                                                                                     |                                                                                                           |                             | 102,599  |         |      |   | 91,276   |        
|Long-term debt, less current portion                                                                                                                                                          |                                                                                                           |                             | 252,188  |         |      |   | 253,437  |        
|Other long-term liabilities                                                                                                                                                                   |                                                                                                           |                             | 2,402    |         |      |   | 360      |        
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  
|Total liabilities                                                                                                                                                                             |                                                                                                           |                             | 357,189  |         |      |   | 345,073  |        
|Commitments and Contingencies                                                                                                                                                                 |                                                                                                           |                             |          |         |      |   |          |        
|Stockholders Equity                                                                                                                                                                          |                                                                                                           |                             |          |         |      |   |          |        
|Common stock, $0.01 par value, 150,000,000 shares
    authorized, 84,832,862 and 81,956,422 shares issued and
    outstanding as of December 31, 2004 and December 31,
    2003, respectively |                                                                                                           |                             | 848      |         |      |   | 820      |        
|Additional paid-in capital                                                                                                                                                                    |                                                                                                           |                             | 530,580  |         |      |   | 510,691  |        
|Accumulated deficit                                                                                                                                                                           |                                                                                                           |                             | (270,652 | )       |      |   | (323,021 | )      
|Deferred compensation                                                                                                                                                                         |                                                                                                           |                             | (345     | )       |      |   | (475     | )      
|Accumulated other comprehensive income                                                                                                                                                        |                                                                                                           |                             | 25,625   |         |      |   | 17,000   |        
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  
|Total stockholders equity                                                                                                                                                                    |                                                                                                           |                             | 286,056  |         |      |   | 205,015  |        
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  
|Total liabilities and stockholders equity                                                                                                                                                    |                                                                                                           | $                           | 643,245  |         |      | $ | 550,088  |        
|                                                                                                                                                                                              |                                                                                                           |                             |          |         |      |  



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |   |   |         |         |  
|---------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------------------------------------- | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|                                                                                                     |                                                       | Year Ended December 31,               |        
|                                                                                                     |                                                       |                                       |        
|                                                                                                     |                                                       | 2004                                  |         |         | 2003 |   |         | 2002    |  
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|                                                                                                     |                                                       | (In thousands, except per share data) |        
|Revenue                                                                                              |                                                       | $                                     | 517,283 |         |      | $ | 454,152 |         |   | $ | 345,322 |        
|Cost of revenue                                                                                      |                                                       |                                       | 270,963 |         |      |   | 255,327 |         |   |   | 214,964 |        
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|                                                                                                     |                                                       |                                       | 246,320 |         |      |   | 198,825 |         |   |   | 130,358 |        
|Operating expenses:                                                                                  |                                                       |                                       |         |         |      |   |         |         |   |   |         |        
|                                                                                                     | Research and development                              |                                       |         | 77,238  |      |   |         | 70,187  |   |   |         | 52,140  |  
|                                                                                                     | Marketing and selling                                 |                                       |         | 42,984  |      |   |         | 37,801  |   |   |         | 35,002  |  
|                                                                                                     | General and administrative                            |                                       |         | 28,674  |      |   |         | 22,729  |   |   |         | 16,861  |  
|                                                                                                     | Amortization of acquisition-related intangible assets |                                       |         | 1,312   |      |   |         | 4,751   |   |   |         | 8,100   |  
|                                                                                                     | In-process research and development                   |                                       |         | 1,530   |      |   |         |        |   |   |         |        |  
|                                                                                                     | Restructuring and impairment charges                  |                                       |         | 7,851   |      |   |         | 21,741  |   |   |         | 648     |  
|                                                                                                     | Nonrecurring charges                                  |                                       |         |        |      |   |         | 11,401  |   |   |         |        |  
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|                                                                                                     |                                                       |                                       | 159,589 |         |      |   | 168,610 |         |   |   | 112,751 |        
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|Operating income                                                                                     |                                                       |                                       | 86,731  |         |      |   | 30,215  |         |   |   | 17,607  |        
|Other income (expense):                                                                              |                                                       |                                       |         |         |      |   |         |         |   |   |         |        
|                                                                                                     | Interest expense                                      |                                       |         | (20,735 | )    |   |         | (23,930 | ) |   |         | (12,541 | )
|                                                                                                     | Interest income                                       |                                       |         | 2,145   |      |   |         | 1,452   |   |   |         | 1,062   |  
|                                                                                                     | Other income (expense), net                           |                                       |         | (769    | )    |   |         | (16,196 | ) |   |         | 147     |  
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|                                                                                                     |                                                       |                                       | (19,359 | )       |      |   | (38,674 | )       |   |   | (11,332 | )      
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|Income (loss) before income taxes                                                                    |                                                       |                                       | 67,372  |         |      |   | (8,459  | )       |   |   | 6,275   |        
|Provision (benefit) for income taxes                                                                 |                                                       |                                       | 15,003  |         |      |   | (8,043  | )       |   |   | 1,165   |        
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|Net income (loss)                                                                                    |                                                       |                                       | 52,369  |         |      |   | (416    | )       |   |   | 5,110   |        
|Preferred stock dividend                                                                             |                                                       |                                       |        |         |      |   | (46,327 | )       |   |   | (62,502 | )      
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|Net income (loss) attributable to common stockholders                                                |                                                       | $                                     | 52,369  |         |      | $ | (46,743 | )       |   | $ | (57,392 | )      
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|Basic net income (loss) per common share                                                             |                                                       | $                                     | 0.63    |         |      | $ | (0.84   | )       |   | $ | (1.24   | )      
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|Diluted net income (loss) per common share                                                           |                                                       | $                                     | 0.60    |         |      | $ | (0.84   | )       |   | $ | (1.24   | )      
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|Weighted average number of shares used in calculating basic net
    income (loss) per common share   |                                                       |                                       | 82,884  |         |      |   | 55,427  |         |   |   | 46,407  |        
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  
|Weighted average number of shares used in calculating diluted
    net income (loss) per common share |                                                       |                                       | 86,609  |         |      |   | 55,427  |         |   |   | 46,407  |        
|                                                                                                     |                                                       |                                       |         |         |      |   |         |         |  



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(DEFICIT) AND


COMPREHENSIVE INCOME


|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |   |  |   |        |        |  |   |          |        |  
|--------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | -------------- | ------ | - | ---------- | - | --- | ----------- |  | - | ----------- | ----- |  | ----------- | ------------- | - | ------------ | - | -------- | ------ | - | - | ----- | - |  | - | ------ | ------ |  | - | -------- | ------ | -
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  | Accumulated |               |   |             
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             | Other |  |             |              
|                                                                                                                                                    |                                         | Common Stock   |        |   | Additional |   |     | Stockholder |  |   |             |       |  |             | Comprehensive |   |              |  
|                                                                                                                                                    |                                         |                |        |   | Paid-In    |   |     | Notes       |  |   | Accumulated |       |  | Deferred    |               |   | Income       |   |          |       
|                                                                                                                                                    |                                         | Shares         |        |   | Amount     |   |     | Capital     |  |   | Receivable  |       |  | Deficit     |               |   | Compensation |   |          | (Loss) |   |   | Total |  
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |  
|                                                                                                                                                    |                                         | (In thousands) |       
|Balance at January 1, 2002                                                                                                                          |                                         |                | 46,165 |   |            | $ | 462 |             |  | $ | 35,385      |       |  | $           | (5,318        | ) |              | $ | (218,886 | )      |   | $ |      |   |  | $ | (888   | )      |  | $ | (189,245 | )     
|Comprehensive income:                                                                                                                               |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |   |  |   |        |        |  |   |          |       
|Net income                                                                                                                                          |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   | 5,110    |        |   |   |      |   |  |   |       |        |  |   | 5,110    |       
|Unrealized derivative gain                                                                                                                          |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   | 98     |        |  |   | 98       |       
|Foreign currency translation adjustment                                                                                                             |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   | 2,893  |        |  |   | 2,893    |       
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |  
|Total comprehensive income                                                                                                                          |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   | 5,110    |        |   |   |      |   |  |   | 2,991  |        |  |   | 8,101    |       
|Warrants issued in conjunction with the Series C Senior
    Redeemable Preferred Stock                                                              |                                         |                |       |   |            |   |    |             |  |   | 3,165       |       |  |             |              |   |              |   | (3,165   | )      |   |   |      |   |  |   |       |        |  |   |         |       
|Interest on stockholder notes receivable                                                                                                            |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             | (252          | ) |              |   |         |        |   |   |      |   |  |   |       |        |  |   | (252     | )     
|Exercise of stock options                                                                                                                           |                                         |                | 487    |   |            |   | 5   |             |  |   | 351         |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 356      |       
|Accretion of dividends on Series A Senior Redeemable,
    Series B Junior Redeemable Convertible and Series C
    Senior Redeemable Preferred Stock |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   | (59,337  | )      |   |   |      |   |  |   |       |        |  |   | (59,337  | )     
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |  
|Balance at December 31, 2002                                                                                                                        |                                         |                | 46,652 |   |            |   | 467 |             |  |   | 38,901      |       |  |             | (5,570        | ) |              |   | (276,278 | )      |   |   |      |   |  |   | 2,103  |        |  |   | (240,377 | )     
|Comprehensive income:                                                                                                                               |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |   |  |   |        |        |  |   |          |       
|                                                                                                                                                    | Net loss                                |                |        |  |            |   |     |            |  |   |             |      |  |             |               |  |              |   |          | (416   | ) |   |       |  |  |   |        |       |  |   |          | (416   | )
|                                                                                                                                                    | Unrealized derivative gain              |                |        |  |            |   |     |            |  |   |             |      |  |             |               |  |              |   |          |       |   |   |       |  |  |   |        | 628    |  |   |          | 628    |  
|                                                                                                                                                    | Foreign currency translation adjustment |                |        |  |            |   |     |            |  |   |             |      |  |             |               |  |              |   |          |       |   |   |       |  |  |   |        | 14,269 |  |   |          | 14,269 |  
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |  
|Total comprehensive income                                                                                                                          |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   | (416     | )      |   |   |      |   |  |   | 14,897 |        |  |   | 14,481   |       
|Exercise of stock options                                                                                                                           |                                         |                | 1,060  |   |            |   | 11  |             |  |   | 684         |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 695      |       
|Accretion of dividends on Series A Senior Redeemable,
    Series B Junior Redeemable Convertible and Series C
    Senior Redeemable Preferred Stock |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   | (46,327  | )      |   |   |      |   |  |   |       |        |  |   | (46,327  | )     
|Net exercise of warrants                                                                                                                            |                                         |                | 9,099  |   |            |   | 91  |             |  |   | (91         | )     |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   |         |       
|Issuance of shares from initial public offering                                                                                                     |                                         |                | 25,145 |   |            |   | 251 |             |  |   | 470,025     |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 470,276  |       
|Stock compensation on acceleration of stock option vesting                                                                                          |                                         |                |       |   |            |   |    |             |  |   | 653         |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 653      |       
|Interest on stockholder notes receivable                                                                                                            |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             | (250          | ) |              |   |         |        |   |   |      |   |  |   |       |        |  |   | (250     | )     
|Deferred compensation                                                                                                                               |                                         |                |       |   |            |   |    |             |  |   | 519         |       |  |             |              |   |              |   |         |        |   |   | (519  | ) |  |   |       |        |  |   |         |       
|Amortization of deferred compensation                                                                                                               |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   |         |        |   |   | 44    |   |  |   |       |        |  |   | 44       |       
|Proceeds from stockholder notes receivable                                                                                                          |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             | 5,820         |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 5,820    |       
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |  
|Balance at December 31, 2003                                                                                                                        |                                         |                | 81,956 |   |            |   | 820 |             |  |   | 510,691     |       |  |             |              |   |              |   | (323,021 | )      |   |   | (475  | ) |  |   | 17,000 |        |  |   | 205,015  |       
|Comprehensive income:                                                                                                                               |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |   |  |   |        |        |  |   |          |       
|Net income                                                                                                                                          |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   | 52,369   |        |   |   |      |   |  |   |       |        |  |   | 52,369   |       
|Foreign currency translation adjustment                                                                                                             |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   | 8,625  |        |  |   | 8,625    |       
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |  
|Total comprehensive income                                                                                                                          |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   | 52,369   |        |   |   |      |   |  |   | 8,625  |        |  |   | 60,994   |       
|Exercise of stock options                                                                                                                           |                                         |                | 1,418  |   |            |   | 14  |             |  |   | 1,070       |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 1,084    |       
|Issuance of common stock related to acquisition                                                                                                     |                                         |                | 1,314  |   |            |   | 13  |             |  |   | 16,556      |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 16,569   |       
|Employee stock purchase plan                                                                                                                        |                                         |                | 145    |   |            |   | 1   |             |  |   | 1,501       |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 1,502    |       
|Stock compensation on acceleration of stock option vesting and
    options issued to nonemployees                                                   |                                         |                |       |   |            |   |    |             |  |   | 762         |       |  |             |              |   |              |   |         |        |   |   |      |   |  |   |       |        |  |   | 762      |       
|Amortization of deferred compensation                                                                                                               |                                         |                |       |   |            |   |    |             |  |   |            |       |  |             |              |   |              |   |         |        |   |   | 130   |   |  |   |       |        |  |   | 130      |       
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |  
|Balance at December 31, 2004                                                                                                                        |                                         |                | 84,833 |   |            | $ | 848 |             |  | $ | 530,580     |       |  | $           |              |   |              | $ | (270,652 | )      |   | $ | (345  | ) |  | $ | 25,625 |        |  | $ | 286,056  |       
|                                                                                                                                                    |                                         |                |        |   |            |   |     |             |  |   |             |       |  |             |               |   |              |   |          |        |   |   |       |  



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                                            |                                                                                  |                                        |         |        |        |   |          |         |        |   |          |        |        |  
|----------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | -------------------------------------- | ------- | ------ | ------ | - | -------- | ------- | ------ | - | -------- | ------ | ------ | -
|                                                                                                            |                                                                                  | Year Ended December 31,                |        
|                                                                                                            |                                                                                  |                                        |        
|                                                                                                            |                                                                                  | 2004                                   |         |        | 2003   |   |          | 2002    |       
|                                                                                                            |                                                                                  |                                        |         |        |        |   |          |         |       
|                                                                                                            |                                                                                  | (In thousands)                         |        
|Cash flows from operating activities                                                                        |                                                                                  |                                        |         |        |        |   |          |         |        |   |          |       
|Net income (loss)                                                                                           |                                                                                  | $                                      | 52,369  |        |        | $ | (416     | )       |        | $ | 5,110    |       
|Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:                |                                                                                  |                                        |         |        |        |   |          |         |        |   |          |       
|                                                                                                            | Depreciation and amortization                                                    |                                        |         | 43,770 |        |   |          | 44,753  |        |   |          | 46,953 |       
|                                                                                                            | In-process research and development                                              |                                        |         | 1,530  |        |   |          |        |        |   |          |       |       
|                                                                                                            | Amortization of deferred financing costs                                         |                                        |         | 1,265  |        |   |          | 1,282   |        |   |          | 1,315  |       
|                                                                                                            | Stock-based compensation expense                                                 |                                        |         | 892    |        |   |          | 3,880   |        |   |          | 532    |       
|                                                                                                            | Restructuring charges, net of cash expended                                      |                                        |         | 5,083  |        |   |          | 692     |        |   |          | 387    |       
|                                                                                                            | Impairment of long-term asset                                                    |                                        |         |       |        |   |          | 20,028  |        |   |          |       |       
|                                                                                                            | Provision for (benefit from) deferred income taxes                               |                                        |         | 2,220  |        |   |          | (19,061 | )      |   |          | 823    |       
|                                                                                                            | Write-off of deferred financing charges and loss on settlement
    of derivative |                                        |         |       |        |   |          | 8,704   |        |   |          |       |       
|                                                                                                            | Loss on retirement of property, plant and equipment                              |                                        |         | 46     |        |   |          | 536     |        |   |          | 288    |       
|                                                                                                            | Income statement impact of change in value of derivatives                        |                                        |         |       |        |   |          | (24     | )      |   |          | (248   | )     
|                                                                                                            | Interest on stockholder notes receivable                                         |                                        |         |       |        |   |          | (250    | )      |   |          | (252   | )     
|                                                                                                            | Changes in operating assets and liabilities:                                     |                                        |         |        |        |   |          |         |        |   |          |        |       
|                                                                                                            |                                                                                  | Accounts receivable                    |         |        | (402   | ) |          |         | (1,654 | ) |          |        | (9,648 | )
|                                                                                                            |                                                                                  | Inventories                            |         |        | (3,971 | ) |          |         | (2,339 | ) |          |        | 7,493  |  
|                                                                                                            |                                                                                  | Prepaid expenses and other assets      |         |        | (5,228 | ) |          |         | 6,483  |   |          |        | 1,060  |  
|                                                                                                            |                                                                                  | Receivable from/payable to affiliates  |         |        |       |   |          |         |       |   |          |        | 4,307  |  
|                                                                                                            |                                                                                  | Accounts payable                       |         |        | 941    |   |          |         | 3,561  |   |          |        | 10,079 |  
|                                                                                                            |                                                                                  | Accrued expenses and other liabilities |         |        | (2,271 | ) |          |         | 4,497  |   |          |        | 12,876 |  
|                                                                                                            |                                                                                  |                                        |         |        |        |   |          |         |       
|Net cash provided by operating activities                                                                   |                                                                                  |                                        | 96,244  |        |        |   | 70,672   |         |        |   | 81,075   |       
|Cash flows from investing activities                                                                        |                                                                                  |                                        |         |        |        |   |          |         |        |   |          |       
|Purchases of property, plant and equipment                                                                  |                                                                                  |                                        | (32,410 | )      |        |   | (26,553  | )       |        |   | (21,987  | )     
|Proceeds from sale of property, plant and equipment                                                         |                                                                                  |                                        | 105     |        |        |   | 275      |         |        |   |         |       
|Purchase of business, net of cash acquired                                                                  |                                                                                  |                                        | (26,787 | )      |        |   |         |         |        |   | (85,438  | )     
|Release of restricted cash                                                                                  |                                                                                  |                                        | 2,391   |        |        |   |         |         |        |   |         |       
|Changes in other assets                                                                                     |                                                                                  |                                        | (3,328  | )      |        |   | (245     | )       |        |   |         |       
|                                                                                                            |                                                                                  |                                        |         |        |        |   |          |         |       
|Net cash used in investing activities                                                                       |                                                                                  |                                        | (60,029 | )      |        |   | (26,523  | )       |        |   | (107,425 | )     
|Cash flows from financing activities                                                                        |                                                                                  |                                        |         |        |        |   |          |         |        |   |          |       
|Payments on long-term debt                                                                                  |                                                                                  |                                        | (1,250  | )      |        |   | (230,413 | )       |        |   | (13,150  | )     
|Issuance of common and preferred stock, net of offering costs                                               |                                                                                  |                                        |        |        |        |   | 470,276  |         |        |   | 75,000   |       
|Proceeds from senior term loan                                                                              |                                                                                  |                                        |        |        |        |   | 125,000  |         |        |   |         |       
|Redemption of preferred stock                                                                               |                                                                                  |                                        |        |        |        |   | (550,244 | )       |        |   |         |       
|Payments on long-term payables                                                                              |                                                                                  |                                        |        |        |        |   | (1,401   | )       |        |   | (1,759   | )     
|Proceeds from senior subordinated notes                                                                     |                                                                                  |                                        |        |        |        |   | 200,000  |         |        |   |         |       
|Proceeds from exercise of stock options for common and preferred
    stock and employee stock purchase plan |                                                                                  |                                        | 2,586   |        |        |   | 939      |         |        |   | 454      |       
|Debt issuance costs                                                                                         |                                                                                  |                                        |        |        |        |   | (11,356  | )       |        |   | (2,170   | )     
|Payment to settle derivatives                                                                               |                                                                                  |                                        |        |        |        |   | (788     | )       |        |   |         |       
|                                                                                                            |                                                                                  |                                        |         |        |        |   |          |         |       
|Net cash provided by financing activities                                                                   |                                                                                  |                                        | 1,336   |        |        |   | 2,013    |         |        |   | 58,375   |       
|Effect of exchange rate changes on cash and cash
    equivalents                                            |                                                                                  |                                        | 5,047   |        |        |   | 10,717   |         |        |   | 1,509    |       
|                                                                                                            |                                                                                  |                                        |         |        |        |   |          |         |       
|Net increase in cash and cash equivalents                                                                   |                                                                                  |                                        | 42,598  |        |        |   | 56,879   |         |        |   | 33,534   |       
|Cash and cash equivalents at beginning of year                                                              |                                                                                  |                                        | 119,063 |        |        |   | 62,184   |         |        |   | 28,650   |       
|                                                                                                            |                                                                                  |                                        |         |        |        |   |          |         |       
|Cash and cash equivalents at end of year                                                                    |                                                                                  | $                                      | 161,661 |        |        | $ | 119,063  |         |        | $ | 62,184   |       
|                                                                                                            |                                                                                  |                                        |         |        |        |   |          |         |       
|Supplementary cash flow information                                                                         |                                                                                  |                                        |         |        |        |   |          |         |        |   |          |       
|Cash paid for interest                                                                                      |                                                                                  | $                                      | 19,351  |        |        | $ | 16,721   |         |        | $ | 11,314   |       
|Cash paid for income taxes                                                                                  |                                                                                  | $                                      | 12,637  |        |        | $ | 9,257    |         |        | $ | 2,455    |       
|Unrealized derivative gain (loss), net of income taxes                                                      |                                                                                  | $                                      |        |        |        | $ |         |         |        | $ | 98       |       
|Supplementary disclosure of non-cash investing and financing
    activities                                 |                                                                                  |                                        |         |        |        |   |          |         |        |   |          |       
|Common stock issued for purchase of business                                                                |                                                                                  | $                                      | 16,569  |        |        | $ |         |         |        | $ |         |       



46



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


December 31, 2004




|   |                                                       
|-- | ------------------------------------------------------
|1. | Background, Basis of Presentation and Recapitalization

Background and Basis of Presentation




Recapitalization












| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | AMIS Holdings was capitalized with three tranches of capital
    stock: 46,030,334 shares of common stock;
    17,870,100 shares of Series A Senior Redeemable
    Preferred Stock; and 14,296,084 shares of Series B
    Junior Redeemable Convertible Preferred Stock.                                                                                                                                                           
|
| |  | The Parents ownership in Spinco was converted into the
    following securities of AMIS Holdings:
    (i) 45,077,001 shares of common stock,
    (ii) 17,500,000 shares of Series A Senior
    Redeemable Preferred Stock, and
    (iii) 14,000,000 shares of Series B Junior
    Redeemable Convertible Preferred Stock. The Parent was also
    issued a warrant to purchase an additional 4,603,032 shares
    of common stock.
|
| |  | Current and former executives ownership in Spinco was
    converted into the following securities of AMIS Holdings:
    (i) 953,333 shares of common stock,
    (ii) 370,100 shares of Series A Senior Redeemable
    Preferred Stock, and (iii) 296,084 shares of
    Series B Junior Redeemable Convertible Preferred Stock.                                                                                                    
|
| |  | CVC and FP each acquired the following securities of AMIS
    Holdings directly from the Parent:
    (i) 17,837,613 shares of common stock,
    (ii) 6,925,000 shares of Series A Senior
    Redeemable Preferred Stock, and (iii) 5,540,000 shares
    of Series B Junior Redeemable Convertible Preferred                                                                                                                        

47



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | Stock in exchange for $138,500,000 in cash. Another third-party
    investment fund acquired the following securities of AMIS
    Holdings directly from the Parent: (i) 386,374 shares
    of common stock, (ii) 150,000 shares of Series A
    Senior Redeemable Preferred Stock, and
    (iii) 120,000 shares of Series B Junior
    Redeemable Convertible Preferred Stock in exchange for
    $3,000,000 in cash. The aggregate consideration paid by these
    third parties to the Parent was $280,000,000 in cash.                                                                                                                                                            
|
| |  | AMIS Holdings obtained $175,000,000 in bank debt and used the
    proceeds for the following: (i) redemption of outstanding
    Spinco Series B and C Preferred Stock and common stock
    warrants for total consideration of approximately $6,500,000;
    (ii) repayment of $72,200,000 of Spinco intercompany debt
    payable to the Parent; (iii) payment of $40,500,000 to the
    Parent for a non-compete agreement; (iv) payment of
    $29,200,000 to the Parent in satisfaction of the remaining
    liquidation preference on the Spinco Series A Preferred
    Stock; and (v) payment of Recapitalization related
    transaction expenses of approximately $24,856,000.
|
| |  | The Parent agreed to indemnify the Company for certain existing
    environmental contingencies and to pay certain existing
    liabilities of the Company. The estimated amount of these
    obligations at December 21, 2000 was approximately
    $11,232,000.                                                                                                                                                                                                                                                                                                                                                                                                                     







|   |                                
|-- | -------------------------------
|2. | Significant Accounting Policies

Principles of Consolidation




Use of Estimates




Revenue Recognition




48



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






Research and Development Expense




Capitalized Software Development Costs for Internal Use




Concentrations of Credit Risk




Cash and Cash Equivalents




Inventories




49



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






Property, Plant and Equipment






Restricted Cash




Intangible Assets






|                       |  |          |        |  |              |   |        |          |  |   |              |  |  |             |        |  |  |                
|---------------------- |  | -------- | ------ |  | ------------ | - | ------ | -------- |  | - | ------------ |  |  | ----------- | ------ |  |  | ---------------
|                       |  | 2004     |        |  | 2003         |   |        |         
|                       |  |          |        |  |              |   |        |         
|                       |  | Gross    |        |  |              |   | Gross  |          |  |   |              | 
|                       |  | Carrying |        |  | Accumulated  |   |        | Carrying |  |   | Accumulated  |  |  |            
|                       |  | Amount   |        |  | Amortization |   |        | Amount   |  |   | Amortization |  |  | Useful Life
|                       |  |          |        |  |              |   |        |          |  |   |              |  |  |            
|Licenses               |  | $        | 70,810 |  |              | $ | 61,840 |          |  | $ | 68,635       |  |  | $           | 59,161 |  |  | 0.5 to 15 years
|Non-compete agreements |  |          | 395    |  |              |   | 26     |          |  |   |             |  |  |             |       |  |  | 2 years        
|Customer relationships |  |          | 10,095 |  |              |   | 195    |          |  |   |             |  |  |             |       |  |  | 4 to 10 years  
|Developed technology   |  |          | 12,679 |  |              |   | 342    |          |  |   |             |  |  |             |       |  |  | 5 years        
|Patents                |  |          | 4,207  |  |              |   | 816    |          |  |   | 770          |  |  |             | 770    |  |  | 5 to 10 years  
|Contracts              |  |          | 325    |  |              |   | 146    |          |  |   | 325          |  |  |             | 81     |  |  | 5 years        
|                       |  |          |        |  |              |   |        |          |  |   |              |  |  |            
|Total                  |  | $        | 98,511 |  |              | $ | 63,365 |          |  | $ | 69,730       |  |  | $           | 60,012 |  |  |                
|                       |  |          |        |  |              |   |        |          |  |   |              |  |  |            



50



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |  |   |       | 
|---- |  | - | ----- | 
|2005 |  | $ | 6,183 | 
|2006 |  | $ | 6,075 | 
|2007 |  | $ | 5,554 | 
|2008 |  | $ | 5,116 | 
|2009 |  | $ | 4,144 | 

Impairment of Long-Lived Assets






Debt Issuance Costs




Goodwill




51



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












Foreign Currency






Income Taxes




52



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Stock Options








|                                                                                                        |                                                                   |      |        |    |      |   |         |      |  |   |         |   | 
|------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ---- | ------ | -- | ---- | - | ------- | ---- |  | - | ------- | - | 
|                                                                                                        |                                                                   | 2004 |        |    | 2003 |   |         | 2002 | 
|                                                                                                        |                                                                   |      |        |    |      |   |         |      | 
|Net income (loss) as reported                                                                           |                                                                   | $    | 52,369 |    |      | $ | (416    | )    |  | $ | 5,110   |  
|Less: Stock compensation expense determined under the fair value
    method, net of related tax effects |                                                                   |      | (3,852 | )  |      |   | (301    | )    |  |   | (383    | )
|Add: Compensation expense associated with accelerated stock
    options, net of related tax effects     |                                                                   |      | 418    |    |      |   | 385     |      |  |   |        |  
|                                                                                                        | Amortization of deferred compensation, net of related tax effects |      |        | 77 |      |   |         | 26   |  |   |         |  | 
|                                                                                                        |                                                                   |      |        |    |      |   |         |      | 
|Pro forma net income (loss)                                                                             |                                                                   |      | 49,012 |    |      |   | (306    | )    |  |   | 4,727   |  
|Preferred stock dividend as reported                                                                    |                                                                   |      |       |    |      |   | (46,327 | )    |  |   | (62,502 | )
|                                                                                                        |                                                                   |      |        |    |      |   |         |      | 
|Pro forma net income (loss) attributable to common stockholders                                         |                                                                   | $    | 49,012 |    |      | $ | (46,633 | )    |  | $ | (57,775 | )
|                                                                                                        |                                                                   |      |        |    |      |   |         |      | 
|Net income (loss) per common share:                                                                     |                                                                   |      |        |    |      |   |         |      |  |   |         |  
|Basic as reported                                                                                       |                                                                   | $    | 0.63   |    |      | $ | (0.84   | )    |  | $ | (1.24   | )
|Diluted as reported                                                                                     |                                                                   | $    | 0.60   |    |      | $ | (0.84   | )    |  | $ | (1.24   | )
|Pro forma basic                                                                                         |                                                                   | $    | 0.59   |    |      | $ | (0.84   | )    |  | $ | (1.24   | )
|Pro forma diluted                                                                                       |                                                                   | $    | 0.57   |    |      | $ | (0.84   | )    |  | $ | (1.24   | )



53



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                      |  |      |      |   |      |   |      |      |  |   |      |  
|----------------------------------------------------- |  | ---- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                                      |  | 2004 |      |   | 2003 |   |      | 2002 | 
|                                                      |  |      |      |   |      |   |      |      | 
|Dividend yield                                        |  |      | 0    | % |      |   | 0    | %    |  |   | 0    | %
|Volatility                                            |  |      | 75   | % |      |   | 8    | %    |  |   | 0    | %
|Risk-free interest rate                               |  |      | 3.14 | % |      |   | 2.07 | %    |  |   | 2.88 | %
|Expected life in years                                |  |      | 3.7  |   |      |   | 2.5  |      |  |   | 2.5  |  
|Weighted average fair value of options at grant date* |  | $    | 8.05 |   |      | $ | 2.16 |      |  | $ | 0.09 |  






|  |                                                                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | The fair value of these options was estimated at the date of
    grant using the Black Scholes Value option pricing model
    subsequent to the IPO in 2003 and the Minimum Value option
    pricing model prior to the IPO.



Advertising




Earnings Per Share










|                                                                                          |  |      |        |  |      |  |        |      |  |  |        | 
|----------------------------------------------------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                                                          |  | 2004 |        |  | 2003 |  |        | 2002 | 
|                                                                                          |  |      |        |  |      |  |        |      | 
|Weighted-average basic shares outstanding                                                 |  |      | 82,884 |  |      |  | 55,427 |      |  |  | 46,407 | 
|Effect of dilutive securities  shares issuable upon
    exercise of options and warrants |  |      | 3,725  |  |      |  |       |      |  |  |       | 
|                                                                                          |  |      |        |  |      |  |        |      | 
|Weighted-average fully diluted shares outstanding                                         |  |      | 86,609 |  |      |  | 55,427 |      |  |  | 46,407 | 
|                                                                                          |  |      |        |  |      |  |        |      | 

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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Derivatives




Recent Accounting Pronouncements








Accounting for


55



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Nonmonetary Transactions,


Inventory Pricing,


Reclassifications






|   |                            
|-- | ---------------------------
|3. | Financial Statement Details



|                |  |      |        |  |      |   |        | 
|--------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                |  | 2004 |        |  | 2003 |  
|                |  |      |        |  |      |  
|Raw materials   |  | $    | 5,533  |  |      | $ | 5,307  | 
|Work-in-process |  |      | 27,651 |  |      |   | 27,213 | 
|Finished goods  |  |      | 19,047 |  |      |   | 13,079 | 
|                |  |      |        |  |      |  
|                |  | $    | 52,231 |  |      | $ | 45,599 | 
|                |  |      |        |  |      |  



|                                          |  |      |        |  |      |   |       | 
|----------------------------------------- |  | ---- | ------ |  | ---- | - | ----- | 
|                                          |  | 2004 |        |  | 2003 |  
|                                          |  |      |        |  |      |  
|Receivable from affiliate                 |  | $    | 484    |  |      | $ | 1,909 | 
|Research and development grant receivable |  |      | 8,096  |  |      |   | 6,734 | 
|Other                                     |  |      | 4,321  |  |      |   | 410   | 
|                                          |  |      |        |  |      |  
|                                          |  | $    | 12,901 |  |      | $ | 9,053 | 
|                                          |  |      |        |  |      |  

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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                      |  |      |        |  |      |   |        | 
|--------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                      |  | 2004 |        |  | 2003 |  
|                      |  |      |        |  |      |  
|Restricted cash       |  | $    | 1,809  |  |      | $ | 4,200  | 
|Prepaid pension asset |  |      | 12,598 |  |      |   | 13,103 | 
|Debt issuance costs   |  |      | 7,059  |  |      |   | 8,324  | 
|Other                 |  |      | 1,791  |  |      |   | 985    | 
|                      |  |      |        |  |      |  
|                      |  | $    | 23,257 |  |      | $ | 26,612 | 
|                      |  |      |        |  |      |  



|                              |  |      |          |   |      |   |          |  
|----------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                              |  | 2004 |          |   | 2003 |  
|                              |  |      |          |   |      |  
|Land and buildings            |  | $    | 65,722   |   |      | $ | 63,094   |  
|Machinery and equipment       |  |      | 407,165  |   |      |   | 386,004  |  
|Construction-in-progress      |  |      | 9,992    |   |      |   | 12,326   |  
|                              |  |      |          |   |      |  
|                              |  |      | 482,879  |   |      |   | 461,424  |  
|Less accumulated depreciation |  |      | (283,636 | ) |      |   | (255,515 | )
|                              |  |      |          |   |      |  
|                              |  | $    | 199,243  |   |      | $ | 205,909  |  
|                              |  |      |          |   |      |  



|                                               |  |      |        |  |      |   |        | 
|---------------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                                               |  | 2004 |        |  | 2003 |  
|                                               |  |      |        |  |      |  
|Accrued employee compensation                  |  | $    | 31,361 |  |      | $ | 29,212 | 
|Reserve for restructuring charges              |  |      | 5,268  |  |      |   | 856    | 
|Reserve for product development project losses |  |      | 7,004  |  |      |   | 6,281  | 
|Investment grant payable                       |  |      | 3,916  |  |      |   | 3,596  | 
|Interest payable                               |  |      | 5,979  |  |      |   | 6,045  | 
|Other                                          |  |      | 8,933  |  |      |   | 8,195  | 
|                                               |  |      |        |  |      |  
|                                               |  | $    | 62,461 |  |      | $ | 54,185 | 
|                                               |  |      |        |  |      |  



|   |                            
|-- | ---------------------------
|4. | Lease and Other Commitments





|     |  |   |       | 
|---- |  | - | ----- | 
|2005 |  | $ | 5,032 | 
|2006 |  | $ | 3,228 | 
|2007 |  | $ | 2,539 | 
|2008 |  | $ | 1,960 | 
|2009 |  | $ | 1,503 | 



57



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|   |                                  
|-- | ---------------------------------
|5. | Transactions with Related Parties









58



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |               
|-- | --------------
|6. | Long-Term Debt



|                          |  |      |         |  |      |   |         | 
|------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                          |  | 2004 |         |  | 2003 |  
|                          |  |      |         |  |      |  
|Term loan                 |  | $    | 123,438 |  |      | $ | 124,687 | 
|Senior subordinated notes |  |      | 130,000 |  |      |   | 130,000 | 
|                          |  |      |         |  |      |  
|                          |  |      | 253,438 |  |      |   | 254,687 | 
|Less current portion      |  |      | 1,250   |  |      |   | 1,250   | 
|                          |  |      |         |  |      |  
|Total long-term debt      |  | $    | 252,188 |  |      | $ | 253,437 | 
|                          |  |      |         |  |      |  

Refinancing of Senior Credit Facilities




Amendments to Senior Credit Facilities










59



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Senior Subordinated Notes


3 4










pari passu




60



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Aggregate Maturities of Long-Term Debt




|                          |  |      |       |  |      |   |       |      |  |   |       |  |  |      |         |            |  |   |   |  |  |   |         | 
|------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ----- |  |  | ---- | ------- | ---------- |  | - | - |  |  | - | ------- | 
|                          |  | 2005 |       |  | 2006 |   |       | 2007 |  |   | 2008  |  |  | 2009 |         | Thereafter | 
|                          |  |      |       |  |      |   |       |      |  |   |       |  |  |      |         |            | 
|Term Loan                 |  | $    | 1,250 |  |      | $ | 1,250 |      |  | $ | 1,250 |  |  | $    | 119,688 |            |  | $ |  |  |  | $ |        | 
|Senior Subordinated Notes |  |      |      |  |      |   |      |      |  |   |      |  |  |      |        |            |  |   |  |  |  |   | 130,000 | 
|                          |  |      |       |  |      |   |       |      |  |   |       |  |  |      |         |            |  |  
|Total                     |  | $    | 1,250 |  |      | $ | 1,250 |      |  | $ | 1,250 |  |  | $    | 119,688 |            |  | $ |  |  |  | $ | 130,000 | 
|                          |  |      |       |  |      |   |       |      |  |   |       |  |  |      |         |            |  |  



|   |                                               
|-- | ----------------------------------------------
|7. | Customer-Funded Product Development Activities





|   |             
|-- | ------------
|8. | Income Taxes



|         |          |      |        |        |      |   |         |         |   |   |       |       |  
|-------- | -------- | ---- | ------ | ------ | ---- | - | ------- | ------- | - | - | ----- | ----- | -
|         |          | 2004 |        |        | 2003 |   |         | 2002    |  
|         |          |      |        |        |      |   |         |         |  
|Federal: |          |      |        |        |      |   |         |         |   |   |       |      
|         | Current  |      | $      | 149    |      |   | $       | 11      |   |   | $     | 10    |  
|         | Deferred |      |        | 5,466  |      |   |         | (12,522 | ) |   |       | (202  | )
|         |          |      |        |        |      |   |         |         |  
|         |          |      | 5,615  |        |      |   | (12,511 | )       |   |   | (192  | )    
|State:   |          |      |        |        |      |   |         |         |   |   |       |      
|         | Current  |      |        | 26     |      |   |         | 2       |   |   |       | 1     |  
|         | Deferred |      |        | 936    |      |   |         | (2,147  | ) |   |       | (34   | )
|         |          |      |        |        |      |   |         |         |  
|         |          |      | 962    |        |      |   | (2,145  | )       |   |   | (33   | )    
|Foreign: |          |      |        |        |      |   |         |         |   |   |       |      
|         | Current  |      |        | 12,353 |      |   |         | 11,372  |   |   |       | 331   |  
|         | Deferred |      |        | (3,927 | )    |   |         | (4,759  | ) |   |       | 1,059 |  
|         |          |      |        |        |      |   |         |         |  
|         |          |      | 8,426  |        |      |   | 6,613   |         |   |   | 1,390 |      
|         |          |      |        |        |      |   |         |         |  
|Total    |          | $    | 15,003 |        |      | $ | (8,043  | )       |   | $ | 1,165 |      
|         |          |      |        |        |      |   |         |         |  

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                         |  |      |        |   |      |   |        |      |  |   |        |  
|---------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                         |  | 2004 |        |   | 2003 |   |        | 2002 | 
|                                         |  |      |        |   |      |   |        |      | 
|Federal tax at statutory rate            |  | $    | 23,580 |   |      | $ | (2,960 | )    |  | $ | 2,196  |  
|State taxes (net of federal benefit)     |  |      | 4,042  |   |      |   | (508   | )    |  |   | 376    |  
|Foreign taxes                            |  |      | (5,632 | ) |      |   | (6,259 | )    |  |   | (1,564 | )
|Foreign research and development credits |  |      | (897   | ) |      |   |       |      |  |   |       |  
|Change in valuation allowance            |  |      | (6,375 | ) |      |   | 1,869  |      |  |   |       |  
|Other, net                               |  |      | 285    |   |      |   | 185    |      |  |   | 157    |  
|                                         |  |      |        |   |      |   |        |      | 
|Total                                    |  | $    | 15,003 |   |      | $ | (8,043 | )    |  | $ | 1,165  |  
|                                         |  |      |        |   |      |   |        |      | 
|Effective tax rate                       |  |      | 22.3   | % |      |   | (95.1  | )%   |  |   | 18.6   | %
|                                         |  |      |        |   |      |   |        |      | 



|                               |                                                       |      |         |         |      |   |         |         |  
|------------------------------ | ----------------------------------------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- | -
|                               |                                                       | 2004 |         |         | 2003 |  
|                               |                                                       |      |         |         |      |  
|Deferred tax assets:           |                                                       |      |         |         |      |   |         |        
|                               | Foreign research and development investment deduction |      | $       | 19,747  |      |   | $       | 10,827  |  
|                               | Reserves not currently deductible                     |      |         | 8,203   |      |   |         | 7,945   |  
|                               | Intangible asset basis difference                     |      |         | 71,865  |      |   |         | 78,078  |  
|                               | Net operating loss carryforwards                      |      |         | 37,518  |      |   |         | 37,578  |  
|                               | Tax credit carryforwards                              |      |         | 2,662   |      |   |         | 2,409   |  
|                               | Inventory valuation                                   |      |         | 876     |      |   |         | 968     |  
|                               | Other                                                 |      |         | 309     |      |   |         | 401     |  
|                               |                                                       |      |         |         |      |  
|Total deferred tax assets      |                                                       |      | 141,180 |         |      |   | 138,206 |        
|Deferred tax liabilities:      |                                                       |      |         |         |      |   |         |        
|                               | Tax in excess of book depreciation                    |      |         | (34,602 | )    |   |         | (33,420 | )
|                               | Prepaid pension asset                                 |      |         | (4,282  | )    |   |         | (4,430  | )
|                               | Other                                                 |      |         | (5,830  | )    |   |         | (2,496  | )
|                               |                                                       |      |         |         |      |  
|Total deferred tax liabilities |                                                       |      | (44,714 | )       |      |   | (40,346 | )      
|                               |                                                       |      |         |         |      |  
|                               |                                                       |      | 96,466  |         |      |   | 97,860  |        
|Valuation allowance            |                                                       |      | (50,334 | )       |      |   | (50,246 | )      
|                               |                                                       |      |         |         |      |  
|Net deferred tax assets        |                                                       | $    | 46,132  |         |      | $ | 47,614  |        
|                               |                                                       |      |         |         |      |  





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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|   |                       
|-- | ----------------------
|9. | Employee Benefit Plans

Defined Contribution Plans






Defined Benefit Plan




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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                    |  |      |        |   |      |   |        |  
|--------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                                    |  | 2004 |        |   | 2003 |  
|                                                    |  |      |        |   |      |  
|Change in benefit obligation:                       |  |      |        |   |      |   |        |  
|Benefit obligation at beginning of period           |  | $    | 21,916 |   |      | $ | 15,950 |  
|Service cost                                        |  |      | 2,070  |   |      |   | 1,889  |  
|Interest cost                                       |  |      | 1,133  |   |      |   | 1,035  |  
|Benefits, administrative expenses and premiums paid |  |      | (288   | ) |      |   | (403   | )
|Actuarial (gain) loss                               |  |      | 4,177  |   |      |   | (140   | )
|Foreign currency translation loss                   |  |      | 2,442  |   |      |   | 3,585  |  
|                                                    |  |      |        |   |      |  
|Benefit obligation at end of period                 |  |      | 31,450 |   |      |   | 21,916 |  
|Change in plan assets:                              |  |      |        |   |      |   |        |  
|Fair value of plan assets at beginning of period    |  | $    | 34,995 |   |      | $ | 28,479 |  
|Actual return on plan assets                        |  |      | 1,254  |   |      |   | 949    |  
|Benefits, administrative expenses and premiums paid |  |      | (288   | ) |      |   | (403   | )
|Foreign currency translation gain                   |  |      | 2,843  |   |      |   | 5,970  |  
|                                                    |  |      |        |   |      |  
|Fair value of plan assets at end of period          |  |      | 38,804 |   |      |   | 34,995 |  
|                                                    |  |      |        |   |      |  
|Excess of plan assets over benefit obligation       |  |      | 7,354  |   |      |   | 13,079 |  
|Unrecognized net actuarial gain                     |  |      | 4,759  |   |      |   | 21     |  
|Foreign currency translation gain                   |  |      | 485    |   |      |   | 3      |  
|                                                    |  |      |        |   |      |  
|Prepaid pension asset                               |  | $    | 12,598 |   |      | $ | 13,103 |  
|                                                    |  |      |        |   |      |  
|Components of net periodic benefit cost:            |  |      |        |   |      |   |        |  
|Service cost                                        |  | $    | 2,070  |   |      | $ | 1,889  |  
|Interest cost                                       |  |      | 1,133  |   |      |   | 1,035  |  
|Expected return on plan assets                      |  |      | (1,812 | ) |      |   | (1,847 | )
|                                                    |  |      |        |   |      |  
|Net periodic pension cost                           |  | $    | 1,391  |   |      | $ | 1,077  |  
|                                                    |  |      |        |   |      |  
|Weighted average assumptions:                       |  |      |        |   |      |   |        |  
|Discount rate                                       |  |      | 5.3    | % |      |   | 6.0    | %
|Expected return on plan assets                      |  |      | 5.3    | % |      |   | 6.0    | %
|Compensation rate increase                          |  |      | 4.0    | % |      |   | 5.0    | %



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|            |  |                   |       | 
|----------- |  | ----------------- | ----- | 
|            |  | Expected Benefits |      
|            |  | to be Paid        |      
|            |  |                   |      
|2005        |  | $                 |      | 
|2006        |  | $                 |      | 
|2007        |  | $                 | 140   | 
|2008        |  | $                 | 2,713 | 
|2009        |  | $                 | 92    | 
|2010 - 2014 |  | $                 | 3,778 | 



Retirement Plan  Philippines






| |                                 
| | --------------------------------
| | Collective Bargaining Agreements





|    |              
|--- | -------------
|10. | Contingencies







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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                               
|--- | ------------------------------
|11. | Stockholders Equity (Deficit)

Common and Preferred Stock






Warrants






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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                         
|--- | ------------------------
|12. | Stock Based Compensation









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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                             |  |           |            |           |           |  |           |                                 |  |  |          |   |        |           |       |        |           |   |                  |                  |  |   |      |  |  |  |            | 
|---------------------------- |  | --------- | ---------- | --------- | --------- |  | --------- | ------------------------------- |  |  | -------- | - | ------ | --------- | ----- | ------ | --------- | - | ---------------- | ---------------- |  | - | ---- |  |  |  | ---------- | 
|                             |  |           |            |           |           |  |           | Weighted Average Exercise Price |  |  |         
|                             |  |           |            | Number of |           |  | Number of |                                 |  |  |          |   |       
|                             |  | Number of |            |           | Senior    |  |           | Junior                          |  |  |          |   | Senior |           |       | Junior |           |   | Weighted-Average |                 
|                             |  | Common    |            |           | Preferred |  |           | Preferred                       |  |  | Common   |   |        | Preferred |       |        | Preferred |   |                  | Remaining        | 
|                             |  | Shares    |            |           | Shares    |  |           | Shares                          |  |  | Shares   |   |        | Shares    |       |        | Shares    |   |                  | Contractual Life | 
|                             |  |           |            |           |           |  |           |                                 |  |  |          |   |        |           |       |        |           |   |                  |                  | 
|Balance at January 1, 2002   |  |           | 5,126,102  |           |           |  | 576,497   |                                 |  |  | 462,797  |   |        |           | 0.72  |        |           |   | 7.70             |                  |  |   | 7.78 |  |  |  | 8.60 years | 
|Options granted              |  |           | 1,218,300  |           |           |  |          |                                 |  |  |         |   |        |           | 0.78  |        |           |   |                 |                  |  |   |     |  |  |  |            | 
|Options exercised            |  |           | (486,922   | )         |           |  | (7,775    | )                               |  |  | (4,250   | ) |        |           | 0.72  |        |           |   | 8.01             |                  |  |   | 8.18 |  |  |  |            | 
|Options canceled             |  |           | (367,493   | )         |           |  | (44,194   | )                               |  |  | (35,412  | ) |        |           | 0.75  |        |           |   | 8.13             |                  |  |   | 8.24 |  |  |  |            | 
|                             |  |           |            |           |           |  |           |                                 |  |  |          |   |        |           |       |        |           |   |                  |                  | 
|Balance at December 31, 2002 |  |           | 5,489,987  |           |           |  | 524,528   |                                 |  |  | 423,135  |   |        |           | 0.72  |        |           |   | 8.80             |                  |  |   | 8.97 |  |  |  | 8.27 years | 
|Options granted              |  |           | 682,065    |           |           |  |          |                                 |  |  |         |   |        |           | 10.58 |        |           |   |                 |                  |  |   |     |  |  |  |            | 
|Options exercised            |  |           | (1,060,231 | )         |           |  | (15,662   | )                               |  |  | (10,146  | ) |        |           | 0.66  |        |           |   | 9.35             |                  |  |   | 9.59 |  |  |  |            | 
|Options canceled             |  |           | (246,702   | )         |           |  | (18,068   | )                               |  |  | (14,859  | ) |        |           | 0.82  |        |           |   | 9.20             |                  |  |   | 9.41 |  |  |  |            | 
|Options redeemed             |  |           |           |           |           |  | (490,798  | )                               |  |  | (398,130 | ) |        |           |      |        |           |   | 9.72             |                  |  |   | 9.98 |  |  |  |            | 
|                             |  |           |            |           |           |  |           |                                 |  |  |          |   |        |           |       |        |           |   |                  |                  | 
|Balance at December 31, 2003 |  |           | 4,865,119  |           |           |  |          |                                 |  |  |         |   |        | $         | 2.11  |        |           | $ |                 |                  |  | $ |     |  |  |  | 7.75 years | 
|Options granted              |  |           | 2,920,133  |           |           |  |          |                                 |  |  |         |   |        |           | 15.05 |        |           |   |                 |                  |  |   |     |  |  |  |            | 
|Options exercised            |  |           | (1,417,249 | )         |           |  |          |                                 |  |  |         |   |        |           | 0.76  |        |           |   |                 |                  |  |   |     |  |  |  |            | 
|Options canceled             |  |           | (293,578   | )         |           |  |          |                                 |  |  |         |   |        |           | 13.87 |        |           |   |                 |                  |  |   |     |  |  |  |            | 
|                             |  |           |            |           |           |  |           |                                 |  |  |          |   |        |           |       |        |           |   |                  |                  | 
|Balance at December 31, 2004 |  |           | 6,074,425  |           |           |  |          |                                 |  |  |         |   |        | $         | 8.08  |        |           | $ |                 |                  |  | $ |     |  |  |  | 8.12 years | 
|                             |  |           |            |           |           |  |           |                                 |  |  |          |   |        |           |       |        |           |   |                  |                  | 

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                       |  |             |           | 
|---------------------- |  | ----------- | --------- | 
|                       |  | Exercisable |          
|                       |  | Shares      |          
|                       |  |             |          
|December 31, 2004:     |  |             |           | 
|Common Stock           |  |             | 2,349,195 | 
|December 31, 2003:     |  |             |           | 
|Common Stock           |  |             | 2,549,871 | 
|December 31, 2002:     |  |             |           | 
|Common Stock           |  |             | 2,150,113 | 
|Senior Preferred Stock |  |             | 376,334   | 
|Junior Preferred Stock |  |             | 304,627   | 



|                         |  |                     |           |                  |                     |  |      |                  |  |   |             |  |  |                  |           |  |  |   |       | 
|------------------------ |  | ------------------- | --------- | ---------------- | ------------------- |  | ---- | ---------------- |  | - | ----------- |  |  | ---------------- | --------- |  |  | - | ----- | 
|                         |  | Options Outstanding |           |                  | Options Exercisable | 
|                         |  |                     |           |                  |                     | 
|                         |  |                     |           | Weighted Average |                     |  |      |                  | 
|                         |  | Number              |           |                  | Remaining           |  |      | Weighted-Average |  |   | Number      |  |  | Weighted-Average |          
|Range of Exercise Prices |  | Outstanding         |           |                  | Contractual Life    |  |      | Exercise Price   |  |   | Exercisable |  |  | Exercise Price   |          
|                         |  |                     |           |                  |                     |  |      |                  |  |   |             |  |  |                  |          
|$ 0.53 - $ 3.96          |  |                     | 3,101,459 |                  |                     |  | 6.78 |                  |  | $ | 0.97        |  |  |                  | 2,238,036 |  |  | $ | 0.83  | 
|$13.19 - $15.46          |  |                     | 1,795,933 |                  |                     |  | 9.63 |                  |  | $ | 14.21       |  |  |                  |          |  |  | $ |      | 
|$16.08 - $20.00          |  |                     | 1,177,033 |                  |                     |  | 9.32 |                  |  | $ | 17.44       |  |  |                  | 111,159   |  |  | $ | 19.83 | 
|                         |  |                     |           |                  |                     |  |      |                  |  |   |             |  |  |                  |          
|$ 0.53 - $20.00          |  |                     | 6,074,425 |                  |                     |  | 8.12 |                  |  | $ | 8.08        |  |  |                  | 2,349,195 |  |  | $ | 1.73  | 
|                         |  |                     |           |                  |                     |  |      |                  |  |   |             |  |  |                  |          









|    |                        
|--- | -----------------------
|13. | Derivatives and Hedging



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|    |                                     
|--- | ------------------------------------
|14. | Restructuring and Impairment Charges





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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                             |  |           |        |       |             |   |            |           |  |   |       |   |  |   |        |  
|---------------------------- |  | --------- | ------ | ----- | ----------- | - | ---------- | --------- |  | - | ----- | - |  | - | ------ | -
|                             |  |           |        | Lease |             |   | Legal Fees |           |  |  
|                             |  | Severance |        |       | Termination |   |            | and Other |  |   |      
|                             |  | Costs     |        |       | Costs       |   |            | Costs     |  |   | Total |  
|                             |  |           |        |       |             |   |            |           |  |   |       |  
|Balance at January 1, 2002   |  |           | 953    |       |             |   | 381        |           |  |   | 349   |   |  |   | 1,683  |  
|2002 Expense                 |  |           | 935    |       |             |   |           |           |  |   |      |   |  |   | 935    |  
|2002 Paid                    |  |           | (968   | )     |             |   | (161       | )         |  |   | (19   | ) |  |   | (1,148 | )
|2002 Reserve Reversal        |  |           | (32    | )     |             |   | 75         |           |  |   | (330  | ) |  |   | (287   | )
|                             |  |           |        |       |             |   |            |           |  |   |       |  
|Balance at December 31, 2002 |  |           | 888    |       |             |   | 295        |           |  |   |      |   |  |   | 1,183  |  
|2003 Expense                 |  |           | 1,713  |       |             |   |           |           |  |   |      |   |  |   | 1,713  |  
|2003 Paid                    |  |           | (1,909 | )*    |             |   | (131       | )         |  |   |      |   |  |   | (2,040 | )
|                             |  |           |        |       |             |   |            |           |  |   |       |  
|Balance at December 31, 2003 |  |           | 692    |       |             |   | 164        |           |  |   |      |   |  |   | 856    |  
|2004 Expense                 |  |           | 7,687  |       |             |   | 187        |           |  |   | 17    |   |  |   | 7,892  |  
|2004 Paid                    |  |           | (3,314 | )     |             |   | (108       | )         |  |   | (17   | ) |  |   | (3,439 | )
|2004 Reserve Reversal        |  |           | (41    | )     |             |   |           |           |  |   |      |   |  |   | (41    | )
|                             |  |           |        |       |             |   |            |           |  |   |       |  
|Balance at December 31, 2004 |  | $         | 5,024  |       |             | $ | 243        |           |  | $ |      |   |  | $ | 5,268  |  
|                             |  |           |        |       |             |   |            |           |  |   |       |  






|  |              
|- | -------------
|* | $653 non-cash



|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|15. | Purchase of the Mixed Signal Business of Alcatel
    Microelectronics from STMicroelectronics





|                                                                                                                                                                                            |  |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | 
|Cash paid to STMicroelectronics                                                                                                                                                             |  | $ | 68,300  | 
|Acquisition related expenses                                                                                                                                                                |  |   | 11,200  | 
|Restructuring accrual                                                                                                                                                                       |  |   | 4,600   | 
|Operating liabilities assumed (including accounts payable of
    approximately $8,300, accrued compensation of approximately
    $7,100 and other accrued expenses of approximately $3,700) |  |   | 19,100  | 
|                                                                                                                                                                                            |  |   |        
|Total purchase price                                                                                                                                                                        |  | $ | 103,200 | 
|                                                                                                                                                                                            |  |   |        



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                               |  |   |         | 
|------------------------------ |  | - | ------- | 
|Trade accounts receivable      |  | $ | 18,300  | 
|Inventory                      |  |   | 19,500  | 
|Prepaid and other assets       |  |   | 13,200  | 
|Deferred pension asset         |  |   | 11,600  | 
|Property, plant and equipment  |  |   | 32,300  | 
|Intangible assets              |  |   | 8,300   | 
|                               |  |   |        
|Total purchase price allocated |  | $ | 103,200 | 
|                               |  |   |        





|    |                   
|--- | ------------------
|16. | Other Acquisitions



|                         |  |   |        |  
|------------------------ |  | - | ------ | -
|Net tangible liabilities |  | $ | (534   | )
|Intangible assets        |  |   | 28,474 |  
|Goodwill                 |  |   | 15,638 |  
|                         |  |   |       
|Total                    |  | $ | 43,578 |  
|                         |  |   |       





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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                                              
|--- | ---------------------------------------------
|17. | Operating Segments and Geographic Information







| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Integrated Mixed Signal Products: designs, manufactures
    and markets system-level integrated mixed signal products using
    the Companys proprietary wafer fabrication process
    technologies and the expertise of the Companys analog and
    mixed signal engineers. The Company applies its mixed signal
    expertise primarily for sensors, controls, high voltage outputs
    and wireless or radio frequency communication.             
|
| | Structured Digital Products: designs, manufactures and
    markets structured digital products, which involve the
    conversion of higher cost field programmable gate arrays, or
    FPGAs, into lower cost digital semiconductors, and medium
    complexity prime digital semiconductors, which are customized
    solutions developed directly from customer specifications rather
    than from a pre-existing semi-standard integrated circuits.
|
| | Mixed Signal Foundry Services: provides semiconductor
    manufacturing services primarily to original equipment
    manufacturers, or OEMs, and fabless semiconductor companies. The
    mixed signal foundry services segment focuses on manufacturing
    customized mixed signal semiconductors with long lifecycles and
    established process technologies that are also characterized by
    small to medium volume production runs.           





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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                              |                                     |              |   |         |            |  |   |                  |   |  |       |         |  |  |   |         | 
|----------------------------- | ----------------------------------- | ------------ | - | ------- | ---------- |  | - | ---------------- | - |  | ----- | ------- |  |  | - | ------- | 
|                              |                                     | Integrated   |   |         | Structured |  |   |                  |   | 
|                              |                                     | Mixed Signal |   |         | Digital    |  |   | Mixed Signal     |   |  |      
|                              |                                     | Products     |   |         | Products   |  |   | Foundry Services |   |  | Total |        
|                              |                                     |              |   |         |            |  |   |                  |   |  |       |        
|Year ended December 31, 2004: |                                     |              |   |         |            |  |   |                  |   |  |       |         |  |  |   |        
|                              | Net revenue from external customers |              | $ | 290,566 |            |  | $ | 119,581          |   |  | $     | 107,136 |  |  | $ | 517,283 | 
|                              | Segment operating income            |              |   | 50,315  |            |  |   | 22,872           |   |  |       | 21,395  |  |  |   | 94,582  | 
|Year ended December 31, 2003: |                                     |              |   |         |            |  |   |                  |   |  |       |         |  |  |   |        
|                              | Net revenue from external customers |              | $ | 241,359 |            |  | $ | 96,689           |   |  | $     | 116,104 |  |  | $ | 454,152 | 
|                              | Segment operating income            |              |   | 28,312  |            |  |   | 15,533           |   |  |       | 19,512  |  |  |   | 63,357  | 
|Year ended December 31, 2002: |                                     |              |   |         |            |  |   |                  |   |  |       |         |  |  |   |        
|                              | Net revenue from external customers |              | $ | 167,196 |            |  | $ | 85,031           |   |  | $     | 93,095  |  |  | $ | 345,322 | 
|                              | Segment operating income (loss)     |              |   | 11,942  |            |  |   | (589             | ) |  |       | 6,902   |  |  |   | 18,255  | 



|                                               |                                      |      |        |        |      |   |        |         |   |   |        |      |  
|---------------------------------------------- | ------------------------------------ | ---- | ------ | ------ | ---- | - | ------ | ------- | - | - | ------ | ---- | -
|                                               |                                      | 2004 |        |        | 2003 |   |        | 2002    |  
|                                               |                                      |      |        |        |      |   |        |         |  
|Total operating income for reportable segments |                                      | $    | 94,582 |        |      | $ | 63,357 |         |   | $ | 18,255 |     
|                                               | Restructuring and impairment charges |      |        | (7,851 | )    |   |        | (21,741 | ) |   |        | (648 | )
|                                               | Nonrecurring charges                 |      |        |       |      |   |        | (11,401 | ) |   |        |     |  
|                                               |                                      |      |        |        |      |   |        |         |  
|Operating income                               |                                      | $    | 86,731 |        |      | $ | 30,215 |         |   | $ | 17,607 |     
|                                               |                                      |      |        |        |      |   |        |         |  







|                        |             |                     |         |   |         |   |         |      |         |   |         |   |         | 
|----------------------- | ----------- | ------------------- | ------- | - | ------- | - | ------- | ---- | ------- | - | ------- | - | ------- | 
|                        |             | 2004                |         |   | 2003    |   |         | 2002 |        
|                        |             |                     |         |   |         |   |         |      |        
|Geographic information: |             |                     |         |   |         |   |         |      |         |   |         |  
|                        | Revenue(1): |                     |         |   |         |   |         |      |         |   |         |   |        
|                        |             | United States       |         | $ | 186,109 |   |         | $    | 174,314 |   |         | $ | 166,577 | 
|                        |             | Other North America |         |   | 31,777  |   |         |      | 11,616  |   |         |   | 25,263  | 
|                        |             | Europe              |         |   | 213,874 |   |         |      | 184,567 |   |         |   | 84,532  | 
|                        |             | Asia-Pacific        |         |   | 85,523  |   |         |      | 83,655  |   |         |   | 68,950  | 
|                        |             |                     |         |   |         |   |         |      |        
|Total                   |             | $                   | 517,283 |   |         | $ | 454,152 |      |         | $ | 345,322 |  
|                        |             |                     |         |   |         |   |         |      |        

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AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                    |               |      |         |         |      |   |         |         | 
|----------------------------------- | ------------- | ---- | ------- | ------- | ---- | - | ------- | ------- | 
|                                    |               | 2004 |         |         | 2003 |  
|                                    |               |      |         |         |      |  
|Property, plant and equipment, net: |               |      |         |         |      |   |         |        
|                                    | United States |      | $       | 152,599 |      |   | $       | 160,099 | 
|                                    | Europe        |      |         | 26,039  |      |   |         | 29,843  | 
|                                    | All other     |      |         | 20,605  |      |   |         | 15,967  | 
|                                    |               |      |         |         |      |  
|Total                               |               | $    | 199,243 |         |      | $ | 205,909 |        
|                                    |               |      |         |         |      |  






|    |                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------
|(1) | Revenue is attributed to geographic regions based on the
    shipments to customers located in those regions.







|    |                                             
|--- | --------------------------------------------
|18. | Condensed Consolidating Financial Statements



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AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Balance Sheet


December 31, 2004


|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |   |         |   |  |   |         |        | 
|---------------------------------------------------- | ---------------------------------------------- | -------------- | -------- | ------ | ------------ | --------- | -------- | ------- | -------------- | - | -------- | --------- |  | ------------ | --------- | ------- | ------------ | - | ------- | - |  | - | ------- | ------ | 
|                                                     |                                                |                |          |        |              | AMIS      |          |         | AMI            |   |          | Other     |  |              | Non-      |        
|                                                     |                                                |                |          |        |              | Holdings, |          |         | Semiconductor, |   |          | Guarantor |  |              | Guarantor |        
|                                                     |                                                | Consolidated   |          |        | Eliminations |           |          | Inc.    |                |   | Inc.     |           |  | Subsidiaries |           |         | Subsidiaries |  
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|                                                     |                                                | (In thousands) |         
|ASSETS                                              
|Current assets:                                      |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |   |         |   |  |   |         |       
|Cash and cash equivalents                            |                                                | $              | 161,661  |        |              | $         |         |         |                | $ | 10,159   |           |  | $            | 79,287    |         |              | $ |        |   |  | $ | 72,215  |       
|Accounts receivable, net                             |                                                |                | 78,624   |        |              |           |         |         |                |   |         |           |  |              | 39,895    |         |              |   |        |   |  |   | 38,729  |       
|Intercompany accounts receivable                     |                                                |                |         |        |              |           | (14,862  | )       |                |   | 1,594    |           |  |              | 12,794    |         |              |   | 134     |   |  |   | 340     |       
|Inventories                                          |                                                |                | 52,231   |        |              |           |         |         |                |   |         |           |  |              | 28,970    |         |              |   |        |   |  |   | 23,261  |       
|Deferred tax assets                                  |                                                |                | 6,518    |        |              |           |         |         |                |   |         |           |  |              | 1,727     |         |              |   |        |   |  |   | 4,791   |       
|Prepaid expenses and other current assets            |                                                |                | 30,102   |        |              |           | (225     | )       |                |   |         |           |  |              | 11,995    |         |              |   |        |   |  |   | 18,332  |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total current assets                                 |                                                |                | 329,136  |        |              |           | (15,087  | )       |                |   | 11,753   |           |  |              | 174,668   |         |              |   | 134     |   |  |   | 157,668 |       
|Property, plant and equipment, net                   |                                                |                | 199,243  |        |              |           |         |         |                |   |         |           |  |              | 164,813   |         |              |   |        |   |  |   | 34,430  |       
|Investment in subsidiaries                           |                                                |                |         |        |              |           | (696,847 | )       |                |   | 361,865  |           |  |              | 181,137   |         |              |   | 153,845 |   |  |   |        |       
|Goodwill and other intangibles, net                  |                                                |                | 51,995   |        |              |           |         |         |                |   |         |           |  |              | 18,801    |         |              |   |        |   |  |   | 33,194  |       
|Deferred tax assets                                  |                                                |                | 39,614   |        |              |           |         |         |                |   | 5,656    |           |  |              | 29,538    |         |              |   |        |   |  |   | 4,420   |       
|Other assets                                         |                                                |                | 23,257   |        |              |           |         |         |                |   | 1,809    |           |  |              | 8,759     |         |              |   |        |   |  |   | 12,689  |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total assets                                         |                                                | $              | 643,245  |        |              | $         | (711,934 | )       |                | $ | 381,083  |           |  | $            | 577,716   |         |              | $ | 153,979 |   |  | $ | 242,401 |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)      
|Current liabilities:                                 |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |   |         |   |  |   |         |       
|                                                     | Current portion of long-term debt              |                | $        | 1,250  |              |           | $        |        |                |   | $        |          |  |              | $         | 1,250   |              |   | $       |  |  |   | $       |       | 
|                                                     | Accounts payable                               |                |          | 37,618 |              |           |          |        |                |   |          |          |  |              |           | 17,913  |              |   |         |  |  |   |         | 19,705 | 
|                                                     | Intercompany accounts payable                  |                |          |       |              |           |          | (15,083 | )              |   |          | 95,254    |  |              |           | (80,172 | )            |   |         | 1 |  |   |         |       | 
|                                                     | Accrued expenses and other current liabilities |                |          | 62,461 |              |           |          | (243    | )              |   |          |          |  |              |           | 24,380  |              |   |         |  |  |   |         | 38,324 | 
|                                                     | Income taxes payable                           |                |          | 1,270  |              |           |          |        |                |   |          | 12        |  |              |           |        |              |   |         | 9 |  |   |         | 1,249  | 
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total current liabilities                            |                                                |                | 102,599  |        |              |           | (15,326  | )       |                |   | 95,266   |           |  |              | (36,629   | )       |              |   | 10      |   |  |   | 59,278  |       
|Long-term debt, less current portion                 |                                                |                | 252,188  |        |              |           |         |         |                |   |         |           |  |              | 252,188   |         |              |   |        |   |  |   |        |       
|Other long-term liabilities                          |                                                |                | 2,402    |        |              |           |         |         |                |   |         |           |  |              | 292       |         |              |   |        |   |  |   | 2,110   |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total liabilities                                    |                                                |                | 357,189  |        |              |           | (15,326  | )       |                |   | 95,266   |           |  |              | 215,851   |         |              |   | 10      |   |  |   | 61,388  |       
|Stockholders Equity (Deficit)                       |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |   |         |   |  |   |         |       
|Common stock                                         |                                                |                | 848      |        |              |           | (3,717   | )       |                |   | 848      |           |  |              |          |         |              |   |        |   |  |   | 3,717   |       
|Additional paid-in capital                           |                                                |                | 530,580  |        |              |           | (411,020 | )       |                |   | 530,580  |           |  |              | 251,653   |         |              |   | 75,908  |   |  |   | 83,459  |       
|Retained earnings (accumulated deficit)              |                                                |                | (270,652 | )      |              |           | (208,411 | )       |                |   | (270,891 | )         |  |              | 84,587    |         |              |   | 55,756  |   |  |   | 68,307  |       
|Deferred compensation                                |                                                |                | (345     | )      |              |           |         |         |                |   | (345     | )         |  |              |          |         |              |   |        |   |  |   |        |       
|Accumulated other comprehensive income               |                                                |                | 25,625   |        |              |           | (73,460  | )       |                |   | 25,625   |           |  |              | 25,625    |         |              |   | 22,305  |   |  |   | 25,530  |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total stockholders equity (deficit)                 |                                                |                | 286,056  |        |              |           | (696,608 | )       |                |   | 285,817  |           |  |              | 361,865   |         |              |   | 153,969 |   |  |   | 181,013 |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total liabilities and stockholders equity (deficit) |                                                | $              | 643,245  |        |              | $         | (711,934 | )       |                | $ | 381,083  |           |  | $            | 577,716   |         |              | $ | 153,979 |   |  | $ | 242,401 |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  

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AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Operations


Year Ended December 31, 2004


|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |   |        |        |  |   |         |        |  
|------------------------------------ | ----------------------------------------------------- | -------------- | ------- | ------- | ------------ | --------- | -------- | -------- | -------------- | - | ------ | --------- |  | ------------ | --------- | ------- | ------------ | - | ------ | ------ |  | - | ------- | ------ | -
|                                     |                                                       |                |         |         |              | AMIS      |          |          | AMI            |   |        | Other     |  |              | Non-      |        
|                                     |                                                       |                |         |         |              | Holdings, |          |          | Semiconductor, |   |        | Guarantor |  |              | Guarantor |        
|                                     |                                                       | Consolidated   |         |         | Eliminations |           |          | Inc.     |                |   | Inc.   |           |  | Subsidiaries |           |         | Subsidiaries |  
|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |  
|                                     |                                                       | (In thousands) |        
|Revenue                              |                                                       | $              | 517,283 |         |              | $         | (69,624  | )        |                | $ |       |           |  | $            | 319,303   |         |              | $ |       |        |  | $ | 267,604 |       
|Cost of revenue                      |                                                       |                | 270,963 |         |              |           | (61,098  | )        |                |   |       |           |  |              | 161,815   |         |              |   |       |        |  |   | 170,246 |       
|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |  
|                                     |                                                       |                | 246,320 |         |              |           | (8,526   | )        |                |   |       |           |  |              | 157,488   |         |              |   |       |        |  |   | 97,358  |       
|Operating expenses:                  |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |   |        |        |  |   |         |       
|                                     | Research and development                              |                |         | 77,238  |              |           |          | (3,257   | )              |   |        |          |  |              |           | 52,683  |              |   |        |       |  |   |         | 27,812 |  
|                                     | Marketing and selling                                 |                |         | 42,984  |              |           |          | (3,583   | )              |   |        |          |  |              |           | 29,087  |              |   |        |       |  |   |         | 17,480 |  
|                                     | General and administrative                            |                |         | 28,674  |              |           |          | (1,710   | )              |   |        | 471       |  |              |           | 20,765  |              |   |        | 1      |  |   |         | 9,147  |  
|                                     | Amortization of acquisition-related intangible assets |                |         | 1,312   |              |           |          |         |                |   |        |          |  |              |           | 246     |              |   |        |       |  |   |         | 1,066  |  
|                                     | In-process research and development                   |                |         | 1,530   |              |           |          |         |                |   |        |          |  |              |           | 658     |              |   |        |       |  |   |         | 872    |  
|                                     | Restructuring charges                                 |                |         | 7,851   |              |           |          |         |                |   |        |          |  |              |           | 1,974   |              |   |        |       |  |   |         | 5,877  |  
|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |  
|                                     |                                                       |                | 159,589 |         |              |           | (8,550   | )        |                |   | 471    |           |  |              | 105,413   |         |              |   | 1      |        |  |   | 62,254  |       
|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |  
|Operating income (loss)              |                                                       |                | 86,731  |         |              |           | 24       |          |                |   | (471   | )         |  |              | 52,075    |         |              |   | (1     | )      |  |   | 35,104  |       
|Other income (expense):              |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |   |        |        |  |   |         |       
|                                     | Interest income (expense), net                        |                |         | (18,590 | )            |           |          | (5       | )              |   |        | 201       |  |              |           | (20,018 | )            |   |        | 15     |  |   |         | 1,217  |  
|                                     | Other income (expense), net                           |                |         | (769    | )            |           |          | (18      | )              |   |        |          |  |              |           | (654    | )            |   |        | 1      |  |   |         | (98    | )
|                                     | Equity earnings in subsidiaries                       |                |         |        |              |           |          | (106,680 | )              |   |        | 52,529    |  |              |           | 27,805  |              |   |        | 26,346 |  |   |         |       |  
|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |  
|                                     |                                                       |                | (19,359 | )       |              |           | (106,703 | )        |                |   | 52,730 |           |  |              | 7,133     |         |              |   | 26,362 |        |  |   | 1,119   |       
|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |  
|Income (loss) before income taxes    |                                                       |                | 67,372  |         |              |           | (106,679 | )        |                |   | 52,259 |           |  |              | 59,208    |         |              |   | 26,361 |        |  |   | 36,223  |       
|Provision (benefit) for income taxes |                                                       |                | 15,003  |         |              |           |         |          |                |   | (110   | )         |  |              | 6,679     |         |              |   | 9      |        |  |   | 8,425   |       
|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |  
|Net income (loss)                    |                                                       | $              | 52,369  |         |              | $         | (106,679 | )        |                | $ | 52,369 |           |  | $            | 52,529    |         |              | $ | 26,352 |        |  | $ | 27,798  |       
|                                     |                                                       |                |         |         |              |           |          |          |                |   |        |           |  |              |           |         |              |  

78



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Cash Flows


Year Ended in December 31, 2004


|                                                             |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |   |      |      |   |   |         |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------- | -------------- | ------- | ------- | ------------ | --------- | ------ | ----- | -------------- | - | ------- | --------- |  | ------------ | --------- | ------- | ------------ | - | ---- | ---- | - | - | ------- | ------- | -
|                                                             |                                                                            |                |         |         |              | AMIS      |        |       | AMI            |   |         | Other     |  |              | Non-      |        
|                                                             |                                                                            |                |         |         |              | Holdings, |        |       | Semiconductor, |   |         | Guarantor |  |              | Guarantor |        
|                                                             |                                                                            | Consolidated   |         |         | Eliminations |           |        | Inc.  |                |   | Inc.    |           |  | Subsidiaries |           |         | Subsidiaries |  
|                                                             |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |  
|                                                             |                                                                            | (In thousands) |        
|Net cash provided by operating activities                    |                                                                            | $              | 96,244  |         |              | $         | (2,156 | )     |                | $ | (21,794 | )         |  | $            | 75,383    |         |              | $ | 487  |      |   | $ | 44,324  |        
|Cash flows from investing activities:                        |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |   |      |      |   |   |         |        
|                                                             | Purchases of property, plant, and equipment                                |                |         | (32,410 | )            |           |        |      |                |   |         |          |  |              |           | (24,584 | )            |   |      |     |   |   |         | (7,826  | )
|                                                             | Purchase of business, net of cash acquired                                 |                |         | (26,787 | )            |           |        |      |                |   |         | 16,569    |  |              |           | (16,277 | )            |   |      |     |   |   |         | (27,079 | )
|                                                             | Investment in subsidiary                                                   |                |         |        |              |           |        | 2,156 |                |   |         |          |  |              |           |        |              |   |      | (487 | ) |   |         | (1,669  | )
|                                                             | Other                                                                      |                |         | (832    | )            |           |        |      |                |   |         | 2,391     |  |              |           | (3,432  | )            |   |      |     |   |   |         | 209     |  
|                                                             |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |  
|Net cash provided by (used in) investing activities          |                                                                            |                | (60,029 | )       |              |           | 2,156  |       |                |   | 18,960  |           |  |              | (44,293   | )       |              |   | (487 | )    |   |   | (36,365 | )      
|Cash flows from financing activities:                        |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |   |      |      |   |   |         |        
|                                                             | Payments on long-term debt                                                 |                |         | (1,250  | )            |           |        |      |                |   |         |          |  |              |           | (1,250  | )            |   |      |     |   |   |         |        |  
|                                                             | Proceeds from exercise of stock options for common and preferred
    stock |                |         | 2,586   |              |           |        |      |                |   |         | 2,586     |  |              |           |        |              |   |      |     |   |   |         |        |  
|                                                             |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |  
|Net cash provided by (used in) financing activities          |                                                                            |                | 1,336   |         |              |           |       |       |                |   | 2,586   |           |  |              | (1,250    | )       |              |   |     |      |   |   |        |        
|Effect of exchange rate changes on cash and cash equivalents |                                                                            |                | 5,047   |         |              |           |       |       |                |   |        |           |  |              |          |         |              |   |     |      |   |   | 5,047   |        
|                                                             |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |  
|Net increase (decrease) in cash and cash equivalents         |                                                                            |                | 42,598  |         |              |           |       |       |                |   | (248    | )         |  |              | 29,840    |         |              |   |     |      |   |   | 13,006  |        
|Cash and cash equivalents at beginning of year               |                                                                            |                | 119,063 |         |              |           |       |       |                |   | 10,407  |           |  |              | 49,446    |         |              |   |     |      |   |   | 59,210  |        
|                                                             |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |  
|Cash and cash equivalents at end of year                     |                                                                            | $              | 161,661 |         |              | $         |       |       |                | $ | 10,159  |           |  | $            | 79,286    |         |              | $ |     |      |   | $ | 72,216  |        
|                                                             |                                                                            |                |         |         |              |           |        |       |                |   |         |           |  |              |           |         |              |  

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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Balance Sheet


December 31, 2003


|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |   |         |   |  |   |         |        | 
|---------------------------------------------------- | ---------------------------------------------- | -------------- | -------- | ------ | ------------ | --------- | -------- | ------- | -------------- | - | -------- | --------- |  | ------------ | --------- | ------- | ------------ | - | ------- | - |  | - | ------- | ------ | 
|                                                     |                                                |                |          |        |              | AMIS      |          |         | AMI            |   |          | Other     |  |              | Non-      |        
|                                                     |                                                |                |          |        |              | Holdings, |          |         | Semiconductor, |   |          | Guarantor |  |              | Guarantor |        
|                                                     |                                                | Consolidated   |          |        | Eliminations |           |          | Inc.    |                |   | Inc.     |           |  | Subsidiaries |           |         | Subsidiaries |  
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|                                                     |                                                | (In thousands) |         
|ASSETS                                              
|Current assets:                                      |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |   |         |   |  |   |         |       
|Cash and cash equivalents                            |                                                | $              | 119,063  |        |              | $         |         |         |                | $ | 10,407   |           |  | $            | 49,446    |         |              | $ |        |   |  | $ | 59,210  |       
|Accounts receivable, net                             |                                                |                | 73,585   |        |              |           |         |         |                |   |         |           |  |              | 33,474    |         |              |   |        |   |  |   | 40,111  |       
|Intercompany accounts receivable                     |                                                |                |         |        |              |           | (16,150  | )       |                |   | 696      |           |  |              | 13,420    |         |              |   | 118     |   |  |   | 1,916   |       
|Inventories                                          |                                                |                | 45,599   |        |              |           |         |         |                |   |         |           |  |              | 23,860    |         |              |   |        |   |  |   | 21,739  |       
|Deferred tax assets                                  |                                                |                | 6,653    |        |              |           |         |         |                |   |         |           |  |              | 1,829     |         |              |   |        |   |  |   | 4,824   |       
|Prepaid expenses and other current assets            |                                                |                | 20,777   |        |              |           | (51      | )       |                |   |         |           |  |              | 9,687     |         |              |   |        |   |  |   | 11,141  |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total current assets                                 |                                                |                | 265,677  |        |              |           | (16,201  | )       |                |   | 11,103   |           |  |              | 131,716   |         |              |   | 118     |   |  |   | 138,941 |       
|Property, plant and equipment, net                   |                                                |                | 205,909  |        |              |           |         |         |                |   |         |           |  |              | 168,322   |         |              |   |        |   |  |   | 37,587  |       
|Investment in subsidiaries                           |                                                |                |         |        |              |           | (542,701 | )       |                |   | 278,619  |           |  |              | 144,505   |         |              |   | 119,577 |   |  |   |        |       
|Goodwill and other intangibles, net                  |                                                |                | 10,929   |        |              |           |         |         |                |   |         |           |  |              | 3,628     |         |              |   |        |   |  |   | 7,301   |       
|Deferred tax assets                                  |                                                |                | 40,961   |        |              |           |         |         |                |   | 5,534    |           |  |              | 36,071    |         |              |   |        |   |  |   | (644    | )     
|Other assets                                         |                                                |                | 26,612   |        |              |           |         |         |                |   | 4,200    |           |  |              | 9,009     |         |              |   |        |   |  |   | 13,403  |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total assets                                         |                                                | $              | 550,088  |        |              | $         | (558,902 | )       |                | $ | 299,456  |           |  | $            | 493,251   |         |              | $ | 119,695 |   |  | $ | 196,588 |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)      
|Current liabilities:                                 |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |   |         |   |  |   |         |       
|                                                     | Current portion of long-term debt              |                | $        | 1,250  |              |           | $        |        |                |   | $        |          |  |              | $         | 1,250   |              |   | $       |  |  |   | $       |       | 
|                                                     | Accounts payable                               |                |          | 34,753 |              |           |          |        |                |   |          |          |  |              |           | 14,752  |              |   |         |  |  |   |         | 20,001 | 
|                                                     | Intercompany accounts payable                  |                |          |       |              |           |          | (16,171 | )              |   |          | 94,680    |  |              |           | (78,509 | )            |   |         |  |  |   |         |       | 
|                                                     | Accrued expenses and other current liabilities |                |          | 54,185 |              |           |          | (270    | )              |   |          |          |  |              |           | 23,336  |              |   |         |  |  |   |         | 31,119 | 
|                                                     | Income taxes payable                           |                |          | 1,088  |              |           |          |        |                |   |          |          |  |              |           | 6       |              |   |         |  |  |   |         | 1,082  | 
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total current liabilities                            |                                                |                | 91,276   |        |              |           | (16,441  | )       |                |   | 94,680   |           |  |              | (39,165   | )       |              |   |        |   |  |   | 52,202  |       
|Long-term debt, less current portion                 |                                                |                | 253,437  |        |              |           |         |         |                |   |         |           |  |              | 253,437   |         |              |   |        |   |  |   |        |       
|Other long-term liabilities                          |                                                |                | 360      |        |              |           |         |         |                |   |         |           |  |              | 360       |         |              |   |        |   |  |   |        |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total liabilities                                    |                                                |                | 345,073  |        |              |           | (16,441  | )       |                |   | 94,680   |           |  |              | 214,632   |         |              |   |        |   |  |   | 52,202  |       
|Stockholders Equity (Deficit)                       |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |   |         |   |  |   |         |       
|Common stock                                         |                                                |                | 820      |        |              |           | (3,717   | )       |                |   | 820      |           |  |              |          |         |              |   |        |   |  |   | 3,717   |       
|Additional paid-in capital                           |                                                |                | 510,691  |        |              |           | (387,952 | )       |                |   | 510,691  |           |  |              | 229,561   |         |              |   | 75,419  |   |  |   | 82,972  |       
|Retained earnings (accumulated deficit)              |                                                |                | (323,021 | )      |              |           | (101,732 | )       |                |   | (323,260 | )         |  |              | 32,058    |         |              |   | 29,404  |   |  |   | 40,509  |       
|Deferred compensation                                |                                                |                | (475     | )      |              |           |         |         |                |   | (475     | )         |  |              |          |         |              |   |        |   |  |   |        |       
|Accumulated other comprehensive income               |                                                |                | 17,000   |        |              |           | (49,060  | )       |                |   | 17,000   |           |  |              | 17,000    |         |              |   | 14,872  |   |  |   | 17,188  |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total stockholders equity (deficit)                 |                                                |                | 205,015  |        |              |           | (542,461 | )       |                |   | 204,776  |           |  |              | 278,619   |         |              |   | 119,695 |   |  |   | 144,386 |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  
|Total liabilities and stockholders equity (deficit) |                                                | $              | 550,088  |        |              | $         | (558,902 | )       |                | $ | 299,456  |           |  | $            | 493,251   |         |              | $ | 119,695 |   |  | $ | 196,588 |       
|                                                     |                                                |                |          |        |              |           |          |         |                |   |          |           |  |              |           |         |              |  

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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Operations


Year Ended December 31, 2003


|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |   |        |        |   |   |         |        |  
|------------------------------------ | ----------------------------------------------------- | -------------- | ------- | ------- | ------------ | --------- | ------- | ------- | -------------- | - | ------- | --------- |  | ------------ | --------- | ------- | ------------ | - | ------ | ------ | - | - | ------- | ------ | -
|                                     |                                                       |                |         |         |              | AMIS      |         |         | AMI            |   |         | Other     |  |              | Non-      |        
|                                     |                                                       |                |         |         |              | Holdings, |         |         | Semiconductor, |   |         | Guarantor |  |              | Guarantor |        
|                                     |                                                       | Consolidated   |         |         | Eliminations |           |         | Inc.    |                |   | Inc.    |           |  | Subsidiaries |           |         | Subsidiaries |  
|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |  
|                                     |                                                       | (In thousands) |        
|Revenue                              |                                                       | $              | 454,152 |         |              | $         | (30,671 | )       |                | $ |        |           |  | $            | 273,990   |         |              | $ |       |        |   | $ | 210,833 |       
|Cost of revenue                      |                                                       |                | 255,327 |         |              |           | (24,701 | )       |                |   |        |           |  |              | 144,983   |         |              |   |       |        |   |   | 135,045 |       
|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |  
|                                     |                                                       |                | 198,825 |         |              |           | (5,970  | )       |                |   |        |           |  |              | 129,007   |         |              |   |       |        |   |   | 75,788  |       
|Operating expenses:                  |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |   |        |        |   |   |         |       
|                                     | Research and development                              |                |         | 70,187  |              |           |         | (2,070  | )              |   |         |          |  |              |           | 48,071  |              |   |        |       |   |   |         | 24,186 |  
|                                     | Marketing and selling                                 |                |         | 37,801  |              |           |         | (4,014  | )              |   |         |          |  |              |           | 26,865  |              |   |        |       |   |   |         | 14,950 |  
|                                     | General and administrative                            |                |         | 22,729  |              |           |         | (47     | )              |   |         | 1,838     |  |              |           | 15,002  |              |   |        |       |   |   |         | 5,936  |  
|                                     | Amortization of acquisition-related intangible assets |                |         | 4,751   |              |           |         |        |                |   |         |          |  |              |           | 4,119   |              |   |        |       |   |   |         | 632    |  
|                                     | Restructuring and impairment charges                  |                |         | 21,741  |              |           |         |        |                |   |         |          |  |              |           | 21,749  |              |   |        |       |   |   |         | (8     | )
|Nonrecurring charges                 |                                                       |                | 11,401  |         |              |           |        |         |                |   | 8,500   |           |  |              | 2,901     |         |              |   |       |        |   |   |        |       
|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |  
|                                     |                                                       |                | 168,610 |         |              |           | (6,131  | )       |                |   | 10,338  |           |  |              | 118,707   |         |              |   |       |        |   |   | 45,696  |       
|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |  
|Operating income (loss)              |                                                       |                | 30,215  |         |              |           | 161     |         |                |   | (10,338 | )         |  |              | 10,300    |         |              |   |       |        |   |   | 30,092  |       
|Other income (expense):              |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |   |        |        |   |   |         |       
|                                     | Interest income (expense), net                        |                |         | (22,478 | )            |           |         | (15     | )              |   |         | 261       |  |              |           | (23,453 | )            |   |        | 14     |   |   |         | 715    |  
|                                     | Other income (expense), net                           |                |         | (16,196 | )            |           |         | (146    | )              |   |         | 4         |  |              |           | (16,641 | )            |   |        | (3     | ) |   |         | 590    |  
|                                     | Equity earnings in subsidiaries                       |                |         |        |              |           |         | (53,846 | )              |   |         | 5,525     |  |              |           | 24,795  |              |   |        | 23,526 |   |   |         |       |  
|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |  
|                                     |                                                       |                | (38,674 | )       |              |           | (54,007 | )       |                |   | 5,790   |           |  |              | (15,299   | )       |              |   | 23,537 |        |   |   | 1,305   |       
|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |  
|Income (loss) before income taxes    |                                                       |                | (8,459  | )       |              |           | (53,846 | )       |                |   | (4,548  | )         |  |              | (4,999    | )       |              |   | 23,537 |        |   |   | 31,397  |       
|Provision (benefit) for income taxes |                                                       |                | (8,043  | )       |              |           |        |         |                |   | (4,132  | )         |  |              | (10,524   | )       |              |   |       |        |   |   | 6,613   |       
|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |  
|Net income (loss)                    |                                                       | $              | (416    | )       |              | $         | (53,846 | )       |                | $ | (416    | )         |  | $            | 5,525     |         |              | $ | 23,537 |        |   | $ | 24,784  |       
|                                     |                                                       |                |         |         |              |           |         |         |                |   |         |           |  |              |           |         |              |  

81



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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Cash Flows


Year Ended in December 31, 2003


|                                                             |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |          |   |   |   |   |  |   |         |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------- | -------------- | ------- | -------- | ------------ | --------- | ---- | - | -------------- | ---- | ------- | --------- | ------------ | --------- | ------------ | -------- | - | - | - | - |  | - | ------- | ------- | -
|                                                             |                                                                            |                |         |          |              | AMIS      |      |   | AMI            |      |         | Other     |              | Non-      |             
|                                                             |                                                                            |                |         |          |              | Holdings, |      |   | Semiconductor, |      |         | Guarantor |              | Guarantor |             
|                                                             |                                                                            | Consolidated   |         |          | Eliminations |           | Inc. |   |                | Inc. |         |           | Subsidiaries |           | Subsidiaries |         
|                                                             |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |         
|                                                             |                                                                            | (In thousands) |        
|Net Cash provided by operating activities                    |                                                                            | $              | 70,672  |          |              | $         |     |   |                | $    | 6,762   |           |              | $         | 28,074       |          |   | $ |  |   |  | $ | 35,836  |        
|Cash flows from investing activities:                        |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |          |   |   |   |   |  |   |         |        
|                                                             | Purchases of property, plant, and equipment                                |                |         | (26,553  | )            |           |      |  |                |      |         |          |              |           |              | (14,210  | ) |   |   |  |  |   |         | (12,343 | )
|                                                             | Other                                                                      |                |         | 30       |              |           |      |  |                |      |         |          |              |           |              | 30       |   |   |   |  |  |   |         |        |  
|                                                             | Investment in subsidiaries                                                 |                |         |         |              |           |      |  |                |      |         | 80,764    |              |           |              | (80,764  | ) |   |   |  |  |   |         |        |  
|                                                             |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |          |   |  
|Net cash provided by (used in) investing activities          |                                                                            |                | (26,523 | )        |              |           |     |   |                |      | 80,764  |           |              |           | (94,944      | )        |   |   |  |   |  |   | (12,343 | )      
|Cash flows from financing activities:                        |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |          |   |   |   |   |  |   |         |        
|                                                             | Payments on long-term debt                                                 |                |         | (230,413 | )            |           |      |  |                |      |         |          |              |           |              | (230,413 | ) |   |   |  |  |   |         |        |  
|                                                             | Issuance of common and preferred stock, net of offering costs              |                |         | 470,276  |              |           |      |  |                |      |         | 470,276   |              |           |              |         |   |   |   |  |  |   |         |        |  
|                                                             | Proceeds from senior term loan                                             |                |         | 125,000  |              |           |      |  |                |      |         |          |              |           |              | 125,000  |   |   |   |  |  |   |         |        |  
|                                                             | Redemption of preferred stock                                              |                |         | (550,244 | )            |           |      |  |                |      |         | (550,244  | )            |           |              |         |   |   |   |  |  |   |         |        |  
|                                                             | Payments on long-term payables                                             |                |         | (1,401   | )            |           |      |  |                |      |         |          |              |           |              | (1,401   | ) |   |   |  |  |   |         |        |  
|                                                             | Proceeds from senior subordinated notes                                    |                |         | 200,000  |              |           |      |  |                |      |         |          |              |           |              | 200,000  |   |   |   |  |  |   |         |        |  
|                                                             | Proceeds from exercise of stock options for common and preferred
    stock |                |         | 939      |              |           |      |  |                |      |         | 939       |              |           |              |         |   |   |   |  |  |   |         |        |  
|                                                             | Debt issuance costs                                                        |                |         | (11,356  | )            |           |      |  |                |      |         |          |              |           |              | (11,356  | ) |   |   |  |  |   |         |        |  
|                                                             | Payment to settle derivatives                                              |                |         | (788     | )            |           |      |  |                |      |         |          |              |           |              | (788     | ) |   |   |  |  |   |         |        |  
|                                                             |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |          |   |  
|Net cash provided by (used in) financing activities          |                                                                            |                | 2,013   |          |              |           |     |   |                |      | (79,029 | )         |              |           | 81,042       |          |   |   |  |   |  |   |        |        
|Effect of exchange rate changes on cash and cash equivalents |                                                                            |                | 10,717  |          |              |           |     |   |                |      |        |           |              |           |             |          |   |   |  |   |  |   | 10,717  |        
|                                                             |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |          |   |  
|Net increase in cash and cash equivalents                    |                                                                            |                | 56,879  |          |              |           |     |   |                |      | 8,497   |           |              |           | 14,172       |          |   |   |  |   |  |   | 34,210  |        
|Cash and cash equivalents at beginning of year               |                                                                            |                | 62,184  |          |              |           |     |   |                |      | 1,910   |           |              |           | 35,274       |          |   |   |  |   |  |   | 25,000  |        
|                                                             |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |          |   |  
|Cash and cash equivalents at end of year                     |                                                                            | $              | 119,063 |          |              | $         |     |   |                | $    | 10,407  |           |              | $         | 49,446       |          |   | $ |  |   |  | $ | 59,210  |        
|                                                             |                                                                            |                |         |          |              |           |      |   |                |      |         |           |              |           |              |          |   |  

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##### Table of Contents



AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Operations


Year Ended December 31, 2002


|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |   |       |       |  |   |         |       |  
|------------------------------------ | ----------------------------------------------------- | -------------- | ------- | ------- | ------------ | --------- | ------- | ------- | -------------- | - | ------ | --------- |  | ------------ | --------- | ------- | ------------ | - | ----- | ----- |  | - | ------- | ----- | -
|                                     |                                                       |                |         |         |              | AMIS      |         |         | AMI            |   |        | Other     |  |              | Non-      |        
|                                     |                                                       |                |         |         |              | Holdings, |         |         | Semiconductor, |   |        | Guarantor |  |              | Guarantor |        
|                                     |                                                       | Consolidated   |         |         | Eliminations |           |         | Inc.    |                |   | Inc.   |           |  | Subsidiaries |           |         | Subsidiaries |  
|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |  
|                                     |                                                       | (In thousands) |        
|Revenue                              |                                                       | $              | 345,322 |         |              | $         | (9,790  | )       |                | $ |       |           |  | $            | 250,941   |         |              | $ |      |       |  | $ | 104,171 |      
|Cost of revenue                      |                                                       |                | 214,964 |         |              |           | (9,091  | )       |                |   |       |           |  |              | 145,867   |         |              |   |      |       |  |   | 78,188  |      
|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |  
|                                     |                                                       |                | 130,358 |         |              |           | (699    | )       |                |   |       |           |  |              | 105,074   |         |              |   |      |       |  |   | 25,983  |      
|Operating expenses:                  |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |   |       |       |  |   |         |      
|                                     | Research and development                              |                |         | 52,140  |              |           |         | (593    | )              |   |        |          |  |              |           | 44,667  |              |   |       |      |  |   |         | 8,066 |  
|                                     | Marketing and selling                                 |                |         | 35,002  |              |           |         |        |                |   |        |          |  |              |           | 27,463  |              |   |       |      |  |   |         | 7,539 |  
|                                     | General and administrative                            |                |         | 16,861  |              |           |         | (106    | )              |   |        | 2,284     |  |              |           | 11,574  |              |   |       |      |  |   |         | 3,109 |  
|                                     | Amortization of acquisition-related intangible assets |                |         | 8,100   |              |           |         |        |                |   |        |          |  |              |           | 8,100   |              |   |       |      |  |   |         |      |  
|                                     | Restructuring charges                                 |                |         | 648     |              |           |         |        |                |   |        |          |  |              |           | 302     |              |   |       |      |  |   |         | 346   |  
|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |  
|                                     |                                                       |                | 112,751 |         |              |           | (699    | )       |                |   | 2,284  |           |  |              | 92,106    |         |              |   |      |       |  |   | 19,060  |      
|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |  
|Operating income (loss)              |                                                       |                | 17,607  |         |              |           |        |         |                |   | (2,284 | )         |  |              | 12,968    |         |              |   |      |       |  |   | 6,923   |      
|Other income (expense):              |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |   |       |       |  |   |         |      
|                                     | Interest income (expense), net                        |                |         | (11,479 | )            |           |         | (56     | )              |   |        | 265       |  |              |           | (12,035 | )            |   |       | 6     |  |   |         | 341   |  
|                                     | Other income (expense), net                           |                |         | 147     |              |           |         | 57      |                |   |        | 62        |  |              |           | 94      |              |   |       |      |  |   |         | (66   | )
|                                     | Equity earnings in subsidiaries                       |                |         |        |              |           |         | (17,948 | )              |   |        | 6,268     |  |              |           | 5,818   |              |   |       | 5,862 |  |   |         |      |  
|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |  
|                                     |                                                       |                | (11,332 | )       |              |           | (17,947 | )       |                |   | 6,595  |           |  |              | (6,123    | )       |              |   | 5,868 |       |  |   | 275     |      
|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |  
|Income (loss) before income taxes    |                                                       |                | 6,275   |         |              |           | (17,947 | )       |                |   | 4,311  |           |  |              | 6,845     |         |              |   | 5,868 |       |  |   | 7,198   |      
|Provision (benefit) for income taxes |                                                       |                | 1,165   |         |              |           |        |         |                |   | (799   | )         |  |              | 577       |         |              |   |      |       |  |   | 1,387   |      
|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |  
|Net income (loss)                    |                                                       | $              | 5,110   |         |              | $         | (17,947 | )       |                | $ | 5,110  |           |  | $            | 6,268     |         |              | $ | 5,868 |       |  | $ | 5,811   |      
|                                     |                                                       |                |         |         |              |           |         |         |                |   |        |           |  |              |           |         |              |  

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AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Cash Flows


Year Ended in December 31, 2002


|                                                             |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |   |     |    |  |   |        |        |  
|------------------------------------------------------------ | -------------------------------------------------------------------------- | -------------- | -------- | ------- | ------------ | --------- | ---- | ---- | -------------- | - | ------- | --------- | - | ------------ | --------- | ------- | ------------ | - | --- | -- |  | - | ------ | ------ | -
|                                                             |                                                                            |                |          |         |              | AMIS      |      |      | AMI            |   |         | Other     |   |              | Non-      |        
|                                                             |                                                                            |                |          |         |              | Holdings, |      |      | Semiconductor, |   |         | Guarantor |   |              | Guarantor |        
|                                                             |                                                                            | Consolidated   |          |         | Eliminations |           |      | Inc. |                |   | Inc.    |           |   | Subsidiaries |           |         | Subsidiaries |  
|                                                             |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |  
|                                                             |                                                                            | (In thousands) |         
|Net cash provided by (used in) operating activities          |                                                                            | $              | 81,075   |         |              | $         | 103  |      |                | $ | (4,768  | )         |   | $            | 75,229    |         |              | $ | (98 | )  |  | $ | 10,609 |       
|Cash flows from investing activities:                        |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |   |     |    |  |   |        |       
|                                                             | Purchases of property, plant, and equipment                                |                |          | (21,987 | )            |           |      |     |                |   |         |          |   |              |           | (18,118 | )            |   |     |   |  |   |        | (3,869 | )
|                                                             | Purchase of business, net of cash acquired                                 |                |          | (85,438 | )            |           |      |     |                |   |         |          |   |              |           | (85,438 | )            |   |     |   |  |   |        |       |  
|                                                             | Investment in subsidiaries                                                 |                |          |        |              |           |      |     |                |   |         | (69,296   | ) |              |           | 59,044  |              |   |     | 98 |  |   |        | 10,154 |  
|                                                             |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |  
|Net cash provided by (used in) investing activities          |                                                                            |                | (107,425 | )       |              |           |     |      |                |   | (69,296 | )         |   |              | (44,512   | )       |              |   | 98  |    |  |   | 6,285  |       
|Cash flows from financing activities:                        |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |   |     |    |  |   |        |       
|                                                             | Payments on long-term debt                                                 |                |          | (13,150 | )            |           |      |     |                |   |         |          |   |              |           | (13,150 | )            |   |     |   |  |   |        |       |  
|                                                             | Issuance of common and preferred stock, net of offering costs              |                |          | 75,000  |              |           |      | (103 | )              |   |         | 75,000    |   |              |           |        |              |   |     |   |  |   |        | 103    |  
|                                                             | Payments on long-term payables                                             |                |          | (1,759  | )            |           |      |     |                |   |         |          |   |              |           | (1,759  | )            |   |     |   |  |   |        |       |  
|                                                             | Debt Issuance costs                                                        |                |          | (2,170  | )            |           |      |     |                |   |         |          |   |              |           | (2,170  | )            |   |     |   |  |   |        |       |  
|                                                             | Proceeds from exercise of stock options for common and preferred
    stock |                |          | 454     |              |           |      |     |                |   |         | 454       |   |              |           |        |              |   |     |   |  |   |        |       |  
|                                                             |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |  
|Net cash provided by (used in) financing activities          |                                                                            |                | 58,375   |         |              |           | (103 | )    |                |   | 75,454  |           |   |              | (17,079   | )       |              |   |    |    |  |   | 103    |       
|Effect of exchange rate changes on cash and cash equivalents |                                                                            |                | 1,509    |         |              |           |     |      |                |   |        |           |   |              |          |         |              |   |    |    |  |   | 1,509  |       
|                                                             |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |  
|Net increase in cash and cash equivalents                    |                                                                            |                | 33,534   |         |              |           |     |      |                |   | 1,390   |           |   |              | 13,638    |         |              |   |    |    |  |   | 18,506 |       
|Cash and cash equivalents at beginning of year               |                                                                            |                | 28,650   |         |              |           |     |      |                |   | 520     |           |   |              | 21,636    |         |              |   |    |    |  |   | 6,494  |       
|                                                             |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |  
|Cash and cash equivalents at end of year                     |                                                                            | $              | 62,184   |         |              | $         |     |      |                | $ | 1,910   |           |   | $            | 35,274    |         |              | $ |    |    |  | $ | 25,000 |       
|                                                             |                                                                            |                |          |         |              |           |      |      |                |   |         |           |   |              |           |         |              |  

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AMIS HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                     
|--- | ------------------------------------
|19. | Quarterly Financial Data (unaudited)

|                                                                                                        |  |                                      |       |  |         |   |       |    |  |   |       |  |  |    |       |  |       |   |       |       |  |   |       |   |  |   |       |   |  |   |       | 
|------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ----- |  | ------- | - | ----- | -- |  | - | ----- |  |  | -- | ----- |  | ----- | - | ----- | ----- |  | - | ----- | - |  | - | ----- | - |  | - | ----- | 
|                                                                                                        |  | Year                                 |      
|                                                                                                        |  |                                      |      
|                                                                                                        |  | 2004(1)                              |       |  | 2003(1) |  
|                                                                                                        |  |                                      |       |  |         |  
|                                                                                                        |  | Q1                                   |       |  | Q2      |   |       | Q3 |  |   | Q4(2) |  |  | Q1 |       |  | Q2(3) |   |       | Q3(4) |  |   | Q4(5) |  
|                                                                                                        |  |                                      |       |  |         |   |       |    |  |   |       |  |  |    |       |  |       |   |       |       |  |   |       |  
|                                                                                                        |  | (In millions, except loss per share) |      
|Revenue                                                                                                 |  | $                                    | 128.3 |  |         | $ | 134.5 |    |  | $ | 131.2 |  |  | $  | 123.3 |  |       | $ | 102.8 |       |  | $ | 108.4 |   |  | $ | 117.4 |   |  | $ | 125.6 | 
|Gross profit                                                                                            |  | $                                    | 59.0  |  |         | $ | 63.2  |    |  | $ | 63.6  |  |  | $  | 60.5  |  |       | $ | 42.4  |       |  | $ | 47.5  |   |  | $ | 51.9  |   |  | $ | 57.0  | 
|Net income (loss)                                                                                       |  | $                                    | 13.5  |  |         | $ | 15.4  |    |  | $ | 16.2  |  |  | $  | 7.3   |  |       | $ | 1.8   |       |  | $ | (7.3  | ) |  | $ | 1.7   |   |  | $ | 3.4   | 
|Preferred stock dividend                                                                                |  |                                      |      |  |         |   |      |    |  |   |      |  |  |    |      |  |       | $ | (15.8 | )     |  | $ | (15.4 | ) |  | $ | (15.1 | ) |  |   |      | 
|                                                                                                        |  |                                      |       |  |         |   |       |    |  |   |       |  |  |    |       |  |       |   |       |       |  |   |       |  
|Net income (loss) attributable to common stockholders                                                   |  | $                                    | 13.5  |  |         | $ | 15.4  |    |  | $ | 16.2  |  |  | $  | 7.3   |  |       | $ | (14.0 | )     |  | $ | (22.6 | ) |  | $ | (13.5 | ) |  | $ | 3.4   | 
|                                                                                                        |  |                                      |       |  |         |   |       |    |  |   |       |  |  |    |       |  |       |   |       |       |  |   |       |  
|Basic net income (loss) per common share                                                                |  | $                                    | 0.16  |  |         | $ | 0.19  |    |  | $ | 0.20  |  |  | $  | 0.09  |  |       | $ | (0.30 | )     |  | $ | (0.48 | ) |  | $ | (0.28 | ) |  | $ | 0.04  | 
|Diluted net income (loss) per common share                                                              |  | $                                    | 0.16  |  |         | $ | 0.18  |    |  | $ | 0.19  |  |  | $  | 0.08  |  |       | $ | (0.30 | )     |  | $ | (0.48 | ) |  | $ | (0.28 | ) |  | $ | 0.04  | 
|Weighted average number of common shares used to compute basic
    net income (loss) per common share   |  |                                      | 82.1  |  |         |   | 82.5  |    |  |   | 82.9  |  |  |    | 83.9  |  |       |   | 46.7  |       |  |   | 46.7  |   |  |   | 48.0  |   |  |   | 79.1  | 
|Weighted average number of common shares used to compute diluted
    net income (loss) per common share |  |                                      | 86.3  |  |         |   | 86.3  |    |  |   | 86.4  |  |  |    | 87.3  |  |       |   | 46.7  |       |  |   | 46.7  |   |  |   | 48.0  |   |  |   | 86.3  | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Prior periods have been reclassified to conform to current
    period presentation.                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(2) | In the fourth quarter of 2004, the Company recorded
    restructuring charges of $7.9 million related to the
    termination of certain employees. The results of the Dspfactory
    acquistion have been included in the Companys operations
    since the November 12, 2004 acquisition date. The Company
    also recorded $1.5 million related to the write-off of
    in-process research and development in association with the
    acquisition of Dspfactory, Ltd.
|   
|(3) | In the second quarter of 2003, the Company recorded an
    impairment charge of $20 million related to the write-off
    of the remaining balance of a non-compete agreement, which was
    deemed by the Company to have no remaining value.                                                                                                                                                                                                                              
|   
|(4) | During the third quarter of 2003, the Company recorded
    nonrecurring charges of $8.5 million related to amendments
    to investment banking and financial advisory services
    arrangements, and for compensation expense of $2.9 million
    related to the redemption of options on preferred stock.                                                                                                                                                                
|   
|(5) | During the fourth quarter of 2003, the Company recorded
    restructuring charges of $1.7 million related to the
    termination of certain management and other employees as well as
    certain sales representatives in the United States. The Company
    also recorded other expenses of $7.5 million during the
    fourth quarter of 2003 for a premium paid in connection with the
    early redemption of a portion of the senior subordinated notes.             



|    |                              
|--- | -----------------------------
|20. | Subsequent Events (unaudited)

3 4


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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE








|         |                        
|-------- | -----------------------
|ITEM 9A. | CONTROLS AND PROCEDURES

Controls and Procedures








Managements Report on Internal Controls over Financial
Reporting









|         |                  
|-------- | -----------------
|ITEM 9B. | OTHER INFORMATION






PART III







|         |                                                   
|-------- | --------------------------------------------------
|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT





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|         |                       
|-------- | ----------------------
|ITEM 11. | EXECUTIVE COMPENSATION








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT AND RELATED STOCKHOLDER MATTERS








|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS








|         |                                       
|-------- | --------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES






PART IV







|         |                                            
|-------- | -------------------------------------------
|ITEM 15. | EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES





| |                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) Financial Statements. See the Index to Financial
    Statements in Item 8.                                                                                                                                                                                                                                                                                                   
|
| | (2) Financial Statement Schedules. All financial statement
    schedules for which provision is made in the applicable
    accounting regulations of the Securities and Exchange Commission
    are not required under the related instructions, are
    inapplicable, or the required information has been provided in
    the consolidated financial statements or notes thereto.
|
| | (3) Exhibits. See Exhibit Index.                                                                                                                                                                                                                                                                                                                                                   

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SIGNATURES






| |                    
| | -------------------
| | AMIS HOLDINGS, INC.



| |     |                   
| | --- | ------------------
| | By: | /s/ David A. Henry

| |                        
| | -----------------------
| |                        
| | David A. Henry         
| | Chief Financial Officer





|                                               |  |                                                                              |  |                |  | 
|---------------------------------------------- |  | ---------------------------------------------------------------------------- |  | -------------- |  | 
|Signature                                      |  | Title                                                                        |  | Date          
|                                               |  |                                                                              |  |               
|                                              
|/s/ CHRISTINE KINGChristine
    King           |  | President and Chief Executive Officer
    (Principal Executive Officer)      |  | March 11, 2005
|                                              
|/s/ DAVID A. HENRYDavid
    A. Henry           |  | Chief Financial Officer
    (Principal Financial
    and Accounting Officer) |  | March 11, 2005
|                                              
|/s/ DIPANJAN DEBDipanjan
    Deb               |  | Director                                                                     |  | March 11, 2005
|                                              
|/s/ COLIN SLADEColin
    Slade                 |  | Director                                                                     |  | March 11, 2005
|                                              
|/s/ DAVID M. RICKEYDavid
    M. Rickey         |  | Director                                                                     |  | March 11, 2005
|                                              
|/s/ GREGORY L. WILLIAMSGregory
    L. Williams |  | Director                                                                     |  | March 11, 2005
|                                              
|/s/ PAUL C.
    SCHORR IVPaul
    C. Schorr IV |  | Director                                                                     |  | March 11, 2005
|                                              
|/s/ S. ATIQ RAZAS.
    Atiq Raza               |  | Director                                                                     |  | March 11, 2005
|                                              
|/s/ DAVID STANTONDavid
    Stanton             |  | Director                                                                     |  | March 11, 2005
|                                              
|/s/ JAMES A. URRYJames
    A. Urry             |  | Director                                                                     |  | March 11, 2005

88



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Exhibit Index


|        |        |          |  |                                                                                                                                                                                                                                                                                          
|------- | ------ | -------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |         
|No.     |        | Document
|        |        |         
|        | 3.1    |          |  | Restated Certificate of Incorporation of AMIS Holdings, Inc.(2)                                                                                                                                                                                                                          
|        | 3.2    |          |  | Amended and Restated By-Laws of AMIS Holdings, Inc.(4)                                                                                                                                                                                                                                   
|       
|        | 4.1    |          |  | Indenture dated as of January 29, 2003 among AMI
    Semiconductor, Inc., AMIS Holdings, Inc., AMI Acquisition LLC,
    AMI Acquisition II LLC and J.P. Morgan Trust Company,
    N.A.(1)                                                                                                
|        | 4.2    |          |  | Form of Certificate of Common Stock, par value $0.01 per
    share, of AMIS Holdings, Inc.(2)                                                                                                                                                                                            
|       
|        | 10.1   |          |  | Credit Agreement dated as of December 21, 2000 among the
    Company, AMIS Holdings, Inc. (formerly named AMI Holdings,
    Inc.), the lenders party thereto and Credit Suisse First Boston
    Corporation, as Collateral Agent and Administrative Agent (the
    Credit Agreement)(1)
|       
|        | 10.2   |          |  | Global Assignment and Acceptance and Amendment dated as of
    February 20, 2001 relating to the Credit Agreement(1)                                                                                                                                                                     
|       
|        | 10.3   |          |  | Amendment No. 2, Waiver and Agreement dated as of
    February 6, 2002, relating to the Credit Agreement(1)                                                                                                                                                                              
|       
|        | 10.4   |          |  | Amendment No. 3, Wavier and Agreement dated as of
    May 2, 2002, relating to the Credit Agreement(1)                                                                                                                                                                                   
|       
|        | 10.5   |          |  | Amendment No. 4, Waiver and Agreement dated as of
    September 6, 2002, relating to the Credit Agreement(1)                                                                                                                                                                             
|       
|        | 10.6   |          |  | Amended and Restated Credit Agreement among AMI Semiconductor,
    Inc., AMIS Holdings, Inc., the lenders party thereto and Credit
    Suisse First Boston, as Administrative Agent and Collateral
    Agent(4)                                                                          
|       
|        | *10.7  |          |  | Amended and Restated Employment Agreement dated as of
    August 15, 2001 by and between AMIS Holdings, Inc. and
    Christine King(2)                                                                                                                                                   
|       
|        | 10.8   |          |  | Amended and Restated Shareholders Agreement among AMIS
    Holdings, Inc. and the holders named therein(4)                                                                                                                                                                              
|       
|        | 10.9   |          |  | Supply Agreement between STMicroelectronics, NV and AMI
    Semiconductor Belgium BVBA dated June 26, 2002 (1)                                                                                                                                                                           
|       
|        | 10.10  |          |  | Form of warrant held by Merchant Capital, Inc. to purchase
    shares of common stock of AMIS Holdings, Inc.(1)                                                                                                                                                                          
|       
|        | 10.11  |          |  | Form of warrant held by Nippon Mining Holdings, Inc. (formerly
    Japan Energy Electronic Materials, Inc.) to purchase shares of
    common stock of AMIS Holdings, Inc.(1)                                                                                                             
|       
|        | 10.12  |          |  | Agreement dated May 8, 2002 between AMI Semiconductor
    Belgium BVBA, AMI Semiconductor, Inc. and STMicroelectronics NV
    for the acquisition of the business of the Mixed Signal Division
    of Alcatel Microelectronics(1)                                                        
|       
|        | 10.13  |          |  | Advisory Agreement dated December 21, 2000 by and between
    AMI Holdings, Inc., AMI Spinco Inc. and Francisco Partners GP,
    LLC(1)                                                                                                                                                  
|       
|        | 10.14  |          |  | Advisory Agreement dated December 21, 2000 by and between
    AMI Holdings, Inc., AMI Spinco, Inc. and TBW LLC(1)                                                                                                                                                                        
|       
|        | *10.15 |          |  | Amended and Restated AMIS Holdings, Inc. 2000 Equity Incentive
    Plan(3)                                                                                                                                                                                                               
|       
|        | 10.16  |          |  | Form of Indemnification Agreement for directors and executive
    officers of AMIS Holdings, Inc.(2)                                                                                                                                                                                     
|       
|        | *10.17 |          |  | Appendix to the Minutes of the General Shareholders
    Meeting regarding the Appointment of Mr. Walter Mattheus in
    the Office of Compensated Director of AMI Semiconductor Belgium
    BVBA dated June 26, 2002(8)                                                                 
|       
|        | 10.18  |          |  | Assignment and Assumption Agreement dated June 26, 2002
    between STMicroelectronics NV and AMI Semiconductor, Inc.;
    Assignment and Assumption Agreement dated June 26, 2002
    between Alcatel Microelectronics NV and AMI Semiconductor,
    Inc.(1)                            
|       
|        | *10.19 |          |  | AMIS Holdings, Inc. 2003 Employee Stock Purchase Plan, as amended                                                                                                                                                                                                                        
|       
|        | 10.20  |          |  | Form of Amendment No. 1 to the Advisory Agreement filed as
    Exhibit 10.13(2)                                                                                                                                                                                                          
|       
|        | 10.21  |          |  | Form of Amendment No. 1 to the Advisory Agreement filed as
    Exhibit 10.14(2)                                                                                                                                                                                                          

89



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##### Table of Contents



|        |        |  |          |                                                                                                                                                                                                                                                                                                                                    
|------- | ------ |  | -------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |         
|No.     |        |  | Document
|        |        |  |         
|       
|        | 10.22  |  |          | Asset Purchase Agreement dated September 9, 2004 among AMI
    Semiconductor, Inc., Emma Mixed Signal C.V., AMI Semiconductor
    Canada Company, AMIS Holdings, Inc., Dspfactory Ltd. and the
    other parties named therein(5)                                                                                                  
|       
|        | 10.23  |  |          | Share Purchase Agreement dated September 9, 2004 among AMI
    Semiconductor Netherlands B.V., AMIS Holdings, Inc., Dspfactory
    Ltd. and the other parties named therein(5)                                                                                                                                                     
|       
|        | 10.24  |  |          | Amendment No. 1, Consent and Waiver Agreement dated
    August 26, 2004, to the Amended and Restated Credit
    Agreement dated as of September 26, 2003, among AMI
    Semiconductor, Inc., AMIS Holdings, Inc., the lenders party
    thereto and Credit Suisse First Boston, as Administrative Agent
    and Collateral Agent(5)
|       
|        | *10.25 |  |          | Form of 2000 Equity Incentive Plan Stock Option Agreement(6)                                                                                                                                                                                                                                                                       
|       
|        | *10.26 |  |          | Key Manager Incentive Plan for 2004, as amended                                                                                                                                                                                                                                                                                    
|       
|        | *10.27 |  |          | Key Manager Incentive Plan for 2005(7)                                                                                                                                                                                                                                                                                             
|       
|        | 10.28  |  |          | Amendment No. 1 to the First Amended and Restated
    Shareholders Agreement                                                                                                                                                                                                                                                      
|       
|        | 10.29  |  |          | Contract of Lease, as amended                                                                                                                                                                                                                                                                                                      
|       
|        | 10.30  |  |          | Memorandum of Agreement, as amended                                                                                                                                                                                                                                                                                                
|       
|        | *10.31 |  |          | Terms of Compensation Arrangement with Jon Stoner                                                                                                                                                                                                                                                                                  
|       
|        | *10.32 |  |          | Summary of Key Terms of Additional Compensation Between AMIS
    Holdings, Inc. and Christine King                                                                                                                                                                                                                                 
|       
|        | *10.33 |  |          | Terms of Compensation Arrangement with Charlie Lesko                                                                                                                                                                                                                                                                               
|       
|        | *10.34 |  |          | Terms of Compensation Arrangement with David Henry                                                                                                                                                                                                                                                                                 
|       
|        | 21.1   |  |          | Direct and Indirect Subsidiaries of AMIS Holdings, Inc.(1)                                                                                                                                                                                                                                                                         
|       
|        | 23.1   |  |          | Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm                                                                                                                                                                                                                                                    
|       
|        | 31.1   |  |          | Rule 13a-14(a) Certification of Chief Executive Officer                                                                                                                                                                                                                                                                            
|       
|        | 31.2   |  |          | Rule 13a-14(a) Certification of Chief Financial Officer                                                                                                                                                                                                                                                                            
|        | 32.1   |  |          | Section 1350 Certification of Chief Executive Officer                                                                                                                                                                                                                                                                              
|        | 32.2   |  |          | Section 1350 Certification of Chief Financial Officer                                                                                                                                                                                                                                                                              






| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| | * | This Exhibit constitutes a management contract or compensatory
    plan or arrangement.



|    |                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to the exhibits to our registration
    statement on Form S-4 (No. 333-103070).                                                      
|   
|(2) | Incorporated by reference to the exhibits to our registration
    statement on Form S-1 (No. 333-108028).                                                      
|   
|(3) | Incorporated by reference to the exhibits to our registration
    statement on Form S-8 (No. 333-111856).                                                      
|   
|(4) | Incorporated by reference to the exhibits to our annual report
    on Form 10-K for the year ended December 31, 2003.                                          
|   
|(5) | Incorporated by reference to the exhibits to our quarterly
    report on Form 10-Q for the quarter ended
    September 25, 2004.                               
|   
|(6) | Incorporated by reference to the exhibits to our current report
    on Form 8-K dated October 1, 2004, filed with the SEC
    on February 7, 2005.             
|   
|(7) | Incorporated by reference to the exhibit to our current report
    on Form 8-K dated February 16, 2005 filed with the SEC
    on February 22, 2005.            
|   
|(8) | Incorporated by reference to the Exhibits to the Registration
    Statement on Form S-4 (No. 333-1703070) of AMI
    Semiconductor, Inc. filed on June 2, 2003.

90