Q4 2025 Amkor Technology Inc Earnings Call

February 9, 2026

Speaker #2: Good day, ladies

Speaker #2: Ladies and gentlemen, welcome to the Amkor Technology fourth quarter and full year 2025 earnings conference call. My name is Diego, and I will be your conference facilitator today.

Speaker #2: At this time, all participants are in a listen-only mode. After the speaker's remarks, we will conduct a question-and-answer session. As a reminder, this conference is being recorded.

Speaker #2: I would now like to turn the call over to Jennifer Jue, Head of Investor Relations. Ms. Jue, please go ahead.

Speaker #3: Good afternoon, and welcome to Amkor's fourth quarter. Joining me today are CEO Kevin Engel and CFO Megan Faust. Our earnings press release was filed with the SEC this afternoon and is available on the investor relations page of our website.

Jennifer Jue: Good afternoon and welcome to Amkor's Q4 2025 earnings conference call. Joining me today are CEO Kevin Engel and CFO Megan Faust. Our earnings press release was filed with the SEC this afternoon and is available on the investor relations page of our website, along with the presentation slides that accompany today's call. During this presentation, we will use non-GAAP financial measures, and you can find the reconciliation to the comparable GAAP financial measures in the slides. We will make forward-looking statements today based on our current beliefs, assumptions, and expectations. Please refer to our press release for a disclaimer on forward-looking statements and our SEC filings for a discussion of the risk factors, and uncertainties that may affect our future results. I will now turn the call over to Kevin.

Speaker #3: Along with the presentation slides that accompany today's call. During this presentation, we will use non-GAAP financial measures, and you can find the reconciliation to the comparable GAAP financial measures in the slides.

Q4 2025 Amkor Technology Inc Earnings Call

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Q4 2025 Amkor Technology Inc Earnings Call

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Monday, February 9th, 2026 at 10:00 PM

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Speaker #3: We will make forward-looking statements today based on our current beliefs, assumptions, and expectations. Please refer to our press release for a disclaimer on forward-looking statements and our SEC filings for a discussion of the risk factors to our future results.

Speaker #3: I will now turn the call over to Kevin.

Speaker #4: Thank you, Jennifer. Good afternoon, everyone, and thank you for joining us today. Before I get to results, I want to begin by saying how honored I am to speak with you for the first time as CEO of AMKOR.

Kevin Engel: Thank you, Jennifer. Good afternoon, everyone, and thank you for joining us today. Before I get to results, I want to begin by saying how honored I am to speak with you for the first time as the CEO of Amkor. I'm grateful to the board for placing their confidence in me to lead the company into the next phase of our journey. I want to acknowledge Giel Rutten for his leadership and vision, which guided us to where we are today. Having spent more than two decades with Amkor, I've seen firsthand the strength of our people, the trust of our customers, and the ability to evolve with the industry, adapting with agility and executing through market transitions and periods of uncertainty. Amkor is an exceptional organization with a team dedicated to delivering customer value and advancing leading-edge technologies.

Speaker #4: I'm grateful to the board for placing their confidence in me to lead the company into the next phase of our journey. I want to acknowledge Guillaume Rutten for his leadership and vision, which guided us to where we are today.

Speaker #4: Having spent more than two decades with Amkor, I’ve seen firsthand the strength of our people, the trust of our customers, and the ability to evolve with the industry—adapting with agility and executing through market transitions and periods of uncertainty.

Speaker #4: AMKOR is an exceptional organization with a team dedicated to delivering customer value and advancing leading-edge technologies. My leadership approach is grounded in transparency, disciplined execution, and a strong customer focus.

Kevin Engel: My leadership approach is grounded in transparency, disciplined execution, and a strong customer focus. I'm energized to lead Amkor as we enter the next chapter of growth. I'll turn to our fourth quarter performance. Amkor delivered strong fourth quarter results. To close out a dynamic year, Q4 revenue was $1.89 billion, and EPS was $0.69, outperforming the high end of our guidance. All end markets exceeded expectations, with the largest upside coming from communications, driven primarily by strong iOS demand. For the full year, revenue grew 6% to $6.7 billion. Computing continued its multi-year acceleration. Automotive delivered strong, advanced content growth. Consumer demand improved, and communications stabilized with a key socket gain. Our team executed exceptionally well, navigating shifts in market conditions, a fluid geopolitical environment with agility and precision, which enabled us to deliver strong fourth quarter results.

Speaker #4: I'm energized to lead Amkor as we enter the next chapter of growth. I'll turn to our fourth quarter performance. Amkor delivered strong fourth quarter results to close out a dynamic year.

Speaker #4: Q4 revenue was $1.89 billion, and EPS was $0.69, outperforming the high end of our guidance. All end markets exceeded expectations, with the largest upside coming from communications.

Speaker #4: Driven primarily by strong iOS demand. For the full year, revenue grew 6% to $6.7 billion. Computing continued its multi-year acceleration. Automotive delivered strong advanced content growth.

Speaker #4: Consumer demand improved, and communications stabilized with a key socket gain. Our team executed exceptionally well, navigating shifts in market conditions and a fluid geopolitical environment with agility and precision, which enabled us to deliver strong fourth quarter results.

Speaker #4: As we look back on 2025, it was a year marked with meaningful progress across each pillar of our strategy. We delivered record advances in computing revenue.

Kevin Engel: As we look back on 2025, it was a year marked with meaningful progress across each pillar of our strategy. We delivered record advanced computing revenue, driven by deep customer engagements across AI and HPC. We successfully ramped our first High-Density Fan-Out programs into high-volume production, expanding across multiple customers, and positioning our platform for strong tailwinds in 2026. Operationally, we made solid progress in Vietnam, reaching break-even in Q4. We also broke ground on our Arizona campus, with construction of phase one now underway. Collectively, these accomplishments strengthened our strategic position, expanded our global footprint, and reinforced our alignment with the fastest-growing megatrends shaping the semiconductor industry. Now let me share an update on our strategic initiatives. Our strategy remains firmly grounded and well-aligned with current market dynamics.

Speaker #4: Driven by deep customer engagements across AI and HPC, we successfully ramped our first high-density fan-out programs into high-volume production, expanding across multiple customers and positioning our platform for strong tailwinds in 2026.

Speaker #4: Operationally, we made solid progress in Vietnam, reaching break-even in Q4. We also broke ground on our Arizona campus, with construction of phase one now underway.

Speaker #4: Collectively, these accomplishments strengthen our strategic position, expand our global footprint, and reinforce our alignment with the fastest-growing megatrends in the industry. Now, let me share an update on our strategic initiatives.

Speaker #4: Our strategy remains firmly grounded and well-aligned with current market dynamics. As we move into the next phase of growth, we see opportunities to further strengthen our execution while staying anchored in our three strategic pillars.

Kevin Engel: As we move into the next phase of growth, we see opportunities to further strengthen our execution while staying anchored in our three strategic pillars. First, elevate our technology leadership. Second, expand our geographic footprint. And third, enhance strategic partnerships in focused markets. These pillars have been central to our progress and will continue to shape our path forward as we support accelerated demand for advanced packaging and deliver greater resiliency, flexibility, and value to our customers. On technology leadership, we will continue to invest in advanced packaging platforms, including HDFO, Flip Chip, and Test, which are critical to next-generation AI and high-performance computing. In 2026, our focus is on launching new programs across these platforms. We have two additional programs in final qualification for HDFO supporting AI data centers, in addition to the two HDFO PC devices we've discussed previously.

Speaker #4: First, elevate our technology leadership. Second, expand our geographic footprint. And third, enhance strategic partnerships and focus markets. These pillars have been central to our progress and will continue to shape our path forward.

Speaker #4: As we support accelerated demand for advanced packaging, and deliver greater resiliency, flexibility, and value to our customers. On technology leadership, we will continue to invest in advanced packaging platforms, including HDFO, Flip Chip, and Test.

Speaker #4: Which are critical to next-generation AI and high-performance computing. In 2026, our focus is on launching new programs across these platforms. We have two additional programs in final qualification for HDFO supporting AI data centers.

Speaker #4: In addition to the two HDFO PC devices we've discussed previously, our Korea team is preparing to launch both programs into high volume in the second half of the year.

Kevin Engel: Our Korea team is preparing for launching both programs into high volume in the second half of the year. The majority of our 2026 equipment investment is focused on HDFO and Test. As AI and HPC demand continues, we are well-positioned to enable the next wave of advanced products. We are expanding our footprint to provide customers with diversified regional options for advanced packaging and test. Our presence across Asia, Europe, and soon the US gives customers meaningful supply chain flexibility. In 2026, our priorities include meeting construction milestones of our Arizona facility, expanding advanced packaging capacity in Korea and Taiwan, and continuing to scale in Vietnam. The ongoing ramp in Vietnam, including the migration of SiP products from Korea, is expected to free up manufacturing space in Korea for HDFO and Test growth. This provides needed flexibility until our Arizona facility comes online.

Speaker #4: The majority of our 2026 equipment investment is focused on HDFO and Test. As AI and HPC demand continues, we are well positioned to enable the next wave of advanced products.

Speaker #4: We are expanding our footprint to provide customers with diversified regional options for advanced packaging and test. Our presence across Asia, Europe, and soon the US gives customers meaningful supply chain flexibility.

Speaker #4: In 2026, our priorities include meeting construction milestones for our Arizona facility, expanding advanced packaging capacity in Korea and Taiwan, and continuing to scale in Vietnam.

Speaker #4: The ongoing ramp in Vietnam, including the migration of SIP products from Korea, is expected to free up manufacturing space in Korea for HDFO and test growth.

Speaker #4: This provides needed flexibility until our Arizona facility comes online. We're also working closely across the ecosystem with foundries, fabless companies, IDMs, and OEMs to align technology roadmaps and scale capacity.

Kevin Engel: We're also working closely across the ecosystem with foundries, fabless companies, IDMs, and OEMs to align technology roadmaps and scale capacity. In 2026, our focus is on enhancing these partnerships with clear milestones and investment commitments. For example, one of the HDFO CPU devices ramping this year includes customer commitments to support our capacity investment, demonstrating how tightly our three pillars come together to support AI market expansion. Across all three pillars, we remain focused on margin improvement driven by operational excellence, optimization in Japan, Vietnam ramp-up efficiencies, a more favorable pricing environment, and a sustained mixed shift towards high-value advanced packaging. We look forward to sharing more details at the investor day in May. For full year 2026, we expect revenue growth to be driven by continued acceleration in computing with expected to grow over 20%, and continued strong growth in advanced automotive.

Speaker #4: In 2026, our focus is on enhancing these partnerships with clear milestones and investment commitments. For example, one of the HDFO CPU devices ramping this year includes customer commitments to support our capacity investment.

Speaker #4: Demonstrating how tightly our three pillars come together to support AI market expansion. Across all three pillars, we remain focused on margin improvement driven by operational excellence, optimization in Japan, Vietnam ramp-up efficiencies, a more favorable pricing environment, and a sustained mixed shift towards high-value advanced packaging.

Speaker #4: We look forward to sharing more details at the investor day in May. For full year 2026, we expect revenue growth to be driven by continued acceleration in computing, with revenue expected to grow over 20%.

Speaker #4: And continued strong growth in advanced automotive. The remainder of our business is expected to grow in the single digits. We continue to monitor export control and trade policies as well as dynamics around substrates, advanced silicon, and memory supply.

Kevin Engel: The remainder of our business is expected to grow in the single digits. We continue to monitor export control and trade policies as well as dynamics around substrates, advanced silicon, and memory supply. We have considered these items in our guidance for Q1. With a strong technology roadmap, targeted capital investments, and deep customer partnerships, Amkor is well-positioned to enable the industry's next wave of innovation. I will now turn the call over to Megan to provide more details on our Q4 performance and near-term outlook.

Speaker #4: We have considered these items in our guidance for Q1. With a strong technology roadmap, targeted capital investments, and deep customer partnerships, Amkor is well-positioned to enable the industry's next wave of innovation.

Speaker #4: I will now turn the call over to Megan to provide more details on our fourth-quarter performance and near-term outlook.

Speaker #4: I will now turn the call over to Megan to provide more details on our fourth-quarter performance and near-term outlook. Thank you.

Megan Faust: Thank you, Kevin, and good afternoon, everyone. Fourth quarter revenue was $1.89 billion, down 5% sequentially and up 16% year-on-year. The sequential decline reflected typical seasonal trends in communications and consumer following strong Q3 builds partially offset by continued strength in advanced automotive. In communications, revenue grew 28% year-on-year in Q4 and 1% for the full year, reflecting a stronger footprint in the current generation of iOS phones and healthy demand across both iOS and Android ecosystems. Computing revenue increased 6% year-on-year in the fourth quarter and 16% for the full year, driven by strength in AI-related PC devices and networking infrastructure. Automotive and industrial revenue increased 25% year-on-year in Q4 and 8% for the full year, driven by strength in advanced automotive content for ADAS applications. Mainstream automotive continued a gradual recovery in Q4, marking the third consecutive quarter of sequential growth.

Speaker #5: Kevin. And good afternoon, everyone. Fourth-quarter revenue was $1.89 billion, down 5% sequentially and up 16% year-on-year. The sequential decline reflected typical seasonal trends in communications and consumer following strong Q3 builds, partially offset by continued strength in advanced automotive.

Speaker #5: In communications, revenue grew 28% year-on-year in Q4, and 1% for the full year, reflecting a stronger footprint in the current generation of iOS phones and healthy demand across both iOS and Android ecosystems.

Speaker #5: Computing revenue increased 6% year-on-year in the fourth quarter, and 16% for the full year, driven by strength in AI-related PC devices and networking infrastructure.

Speaker #5: Automotive and industrial were up year-on-year in Q4. Revenue increased 25% and 8% for the full year, driven by strength in advanced automotive content for ADAS applications.

Speaker #5: Mainstream automotive continued a gradual recovery in Q4, marking the third consecutive quarter of sequential growth. In consumer, revenue declined 10% year-on-year in the fourth quarter.

Megan Faust: In consumer, revenue declined 10% year-over-year in the fourth quarter, reflecting the product lifecycle of a high-volume wearable product introduced in the second half of 2024. For full year, consumer grew 9% with growth driven by both a full year of the wearable product and a broad improvement across traditional consumer applications. Gross profit for the quarter was $315 million, which included a benefit of approximately $30 million from asset sales as noted in guidance for the quarter. Gross margin was 16.7%. Operating expenses for the quarter were $130 million. Operating income was $185 million, and operating income margin was 9.8%. Our effective tax rate for the quarter was 4.8%, primarily due to discrete tax benefits related to the recognition of deferred tax assets. Net income was $172 million, resulting in EPS of $0.69. EBITDA was $369 million, and EBITDA margin was 19.5%.

Speaker #5: Reflecting the product life cycle of a high-volume wearable product introduced in the second half of 2024. For the full year, consumer grew 9%, with growth driven by both a full year of the wearable product and a broad improvement across traditional consumer applications.

Speaker #5: Gross profit for the quarter was $315 million, which included a benefit of approximately $30 million from asset sales, as noted in guidance for the quarter.

Speaker #5: Gross margin was 16.7%. Operating expenses for the quarter were $130 million. Operating income was $185 million. Operating income margin was 9.8%. Our effective tax rate for the quarter was 4.8%.

Speaker #5: Primarily due to discrete tax benefits related to the recognition of deferred tax assets. Net income was $172 million, resulting in EPS of $0.69. EBITDA was $369 million.

Speaker #5: And EBITDA margin was 19.5%. Now, let's turn to our full year performance. 2025 revenue increased 6% to $6.7 billion. All end markets grew, and we achieved record revenue in the computing end market.

Megan Faust: Now let's turn to our full year performance. 2025 revenue increased 6% to $6.7 billion. All end markets grew, and we achieved record revenue in the computing end market. Advanced packaging revenue also set a new record, growing 7% year-on-year, driven by growth in computing, automotive, and consumer. Full year gross profit was $939 million, and gross margin was 14%, which includes a 90 basis point headwind from the ramp-up of our Vietnam facility. Operating income was $467 million, and operating income margin was 7%. Our full year effective tax rate was 15.4%, lower than anticipated due to the discrete tax benefits recognized in the fourth quarter. Net income for the year was $374 million, resulting in EPS of $1.50. EBITDA was $1.16 billion, and EBITDA margin was 17.3%.

Speaker #5: Advanced packaging revenue also set a new record, growing 7% year-on-year. This was driven by growth in computing, automotive, and consumer. Full year gross profit was $939 million.

Speaker #5: And gross margin was 14%, which includes a 90 basis point headwind from the ramp-up of our Vietnam facility. Operating income was $467 million, and operating income margin was 7%.

Speaker #5: Our full-year effective tax rate was 15.4%, lower than anticipated, due to the discrete tax benefits recognized in the fourth quarter. Net income for the year was $374 million.

Speaker #5: Resulting in EPS of $1.50. EBITDA was $1.16 billion, and EBITDA margin was 17.3%. Capital expenditures for 2025 were $905 million, lower than our guidance.

Megan Faust: Capital expenditures for 2025 were $905 million, lower than our guidance due to the timing of cash payments for our Arizona facility. These investments remain in our plan and will shift into 2026. Full year free cash flow was $308 million. Throughout 2025, we proactively positioned our balance sheet with added strength and flexibility, meaningfully enhancing liquidity. At year-end, we held $2 billion in cash and short-term investments, and total liquidity was $3 billion, a 30% increase from the prior year. Total debt was $1.4 billion, and debt-to-EBITDA ratio was 1.2 times. Now turning to our outlook. Q1 2026 revenue is expected to be between $1.6 and 1.7 billion, representing a 25% year-on-year increase at the midpoint. We see strong growth year-on-year in communications, computing, and the automotive and industrial end markets. Gross margin is projected to be between 12.5% and 13.5%.

Speaker #5: Due to the timing of cash payments for our Arizona facility, these investments remain in our plan and will shift into 2026. Full-year free cash flow was $308 million.

Speaker #5: Throughout 2025, we proactively positioned our balance sheet for strength and flexibility, meaningfully enhancing liquidity. At year-end, we held $2 billion in cash and short-term investments.

Speaker #5: And total liquidity was $3 billion, a 30% increase from the prior year. Total debt was $1.4 billion, and the debt to EBITDA ratio was 1.2 times.

Speaker #5: Now, turning to our outlook. Q1 2026 revenue is expected to be between $1.6 and $1.7 billion, representing a 25% year-on-year increase at the midpoint.

Speaker #5: We see strong growth year-on-year in communications, computing, and the automotive and industrial end markets. Gross margin is projected to be between 12.5% and 13.5%.

Speaker #5: We expect operating expenses to increase to approximately $135 million, as we continue to invest in R&D for anticipated growth. Our full-year effective tax rate is expected to be around 20%.

Megan Faust: We expect operating expenses to increase to approximately $135 million as we continue to invest in R&D for anticipated growth. Our full year effective tax rate is expected to be around 20%. Net income is forecasted to be between $45 and $70 million, resulting in EPS between $0.18 and $0.28, a strong start to the year. 2026 CapEx is expected to increase to a range of $2.5 to $3 billion. 65% to 70% is projected for facility expansion, including phase 1 of our Arizona campus. About 30% to 35% is projected for HDFO, Test, and other advanced packaging capacity. The remaining spend is projected for R&D and quality programs. In closing, our fourth quarter and full year 2025 results reflect Amkor's focus and discipline on executing our strategic pillars.

Speaker #5: Net income is forecasted to be between $45 and $70 million, resulting in EPS between $18 and $28. A strong start to the year. 2026 CAPEX, a range of $2.5 to $3 billion, is expected to increase.

Speaker #5: 65% to 70% is projected for facility expansion, including Phase 1 of our Arizona campus. About 30% to 35% is projected for HDFO, test, and other advanced packaging capacity.

Speaker #5: The remaining spend is projected for R&D and quality programs. In closing, our fourth quarter and full year 2025 results reflect Amkor's focus and discipline on executing our strategic pillars.

Speaker #5: We enter 2026 with strong momentum, a clear strategy, and an investment agenda to enable our next chapter of growth. This concludes our prepared remarks.

Megan Faust: We enter 2026 with strong momentum, a clear strategy, and an investment agenda to enable our next chapter of growth. This concludes our prepared remarks. We will now open the call up for your questions. Operator.

Speaker #5: We will now open the call up for your questions.

Speaker #5: Operator. Thank

Speaker #6: Thank you. And at this time, we’ll conduct our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Operator: Thank you. And at this time, we'll conduct our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. And your first question comes from Charles Shi with Needham & Company. Please state your question.

Speaker #6: A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker #6: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.

Speaker #6: And your first question comes from Charles Shi with Needham & Company. Please state your question.

Speaker #6: question. Hi.

Charles Shi: Hi. Thanks for taking my question. Kevin, Megan, especially Kevin, welcome on board. I'm looking forward to working with you going from here. Maybe the first question regarding your CapEx guidance. Obviously, that's well above what we thought. And so when Amkor announced the plan, Arizona, there was a $7 billion total CapEx investment. So we automatically thought that was more incrementally. You're going to do that over multiple years. But we kind of have to guess that embedded in your pretty large CapEx guidance, a good amount of that investment is going to be a little bit more front-loading than we thought. So I wonder, is there something we kind of missed or what has changed over the last three or four months?

Speaker #7: Thanks for taking my question. Kevin, Megan—especially Kevin—work on board. I'm looking forward to working with you going from here. Maybe the first question regarding your CapEx guidance.

Speaker #7: Obviously, that's well above what we thought. And so, when you announced—when Amkor announced the plan in Arizona—there was a $7 billion total CAPEX investment.

Speaker #7: So, we met—automatically thought that was like more incrementally, you're going to do that over multiple years. But if we kind of have to guess, is the embedded in your pretty large CAPEX guidance, a good amount of that investment going to be a little bit more front-loaded than we thought?

Speaker #7: So, I wonder, is there something we kind of missed, or what has changed over the last three or four months? I didn't notice you mentioned that there was a customer commitment for a data center HDFO project—that feels like that has played a role there.

Charles Shi: I did notice you mentioned that there was a customer commitment for a data center HDFO project, but it feels like that has played a role there. Mind if you give us some sense on why the CapEx numbers are so high and what's the reason for that? Thank you.

Speaker #7: Mind if you give us some sense on why, and what’s the reason for that? Thank you.

Speaker #8: Yeah, sure. Thanks, Charles. Good to hear from you. So, I think you kind of have to break it into two pieces. If you look at the CAPEX projection, again, what Megan highlighted in her prepared remarks, it was about 65 to 70 percent of that is for facilities.

Kevin Engel: Yeah, sure. Thanks, Charles. Good to hear from you. So I think you kind of have to break it into two pieces. If you look at the CapEx projection, again, what Megan highlighted in her prepared remarks, it was about 65% to 70% of that is for facilities. So then you take that percentage and let's talk about the US spend. So when we talk about the US, the $7 billion, we talked about a two-phased approach. Phase one is you can think of that about half of that $7 billion. And then the construction is about 60% of that. And then if you think about the construction timeframe that we talked about, we talked about the building being completed in 2027, basically around middle of the year.

Speaker #8: So then you take that percentage, and let's talk about the US spend. So when we talk about the US, the $7 billion, we talked about a two-phased approach.

Speaker #8: Phase 1 is, you can think of that as about half of that $7 billion. And then the construction is about 60 percent of that. And then if you think about the construction timeframe that we talked about, we talked about the building being completed in 2027.

Speaker #8: Basically, around the middle of the year. So, if you kind of overlay that together, you can imagine that between this year and the first half of next year, you get an idea of that capital spending for the Phase 1 build-out.

Kevin Engel: So if you kind of overlay that together, you can imagine that between this year and the first half of next year, you get an idea of that capital spending for the phase 1 build-out. In general, if you talk about the other portion of the CapEx, the 30% to 35% that's equipment, I think there's a couple of key things to highlight there. Obviously, that's not equipment for US manufacturing. That's all in support of Korea, supporting the HDFO and Test, as well as 300-millimeter capacity expansion in Taiwan. That is an increase year-on-year, pretty significantly, about a 40% increase on equipment. And that just highlights the strong demand that we're seeing in this advanced packaging area. On the commitment side, let me touch on that. So obviously, we're not going to talk about the details of commitments, but in general, that comes in multiple forms.

Speaker #8: In general, if you talk about the other portion of the CAPEX, the 30% to 35% that's equipment, I think there's a couple of key things to highlight there.

Speaker #8: Obviously, that's not equipment for U.S. manufacturing. That's all in support of Korea, supporting the HDFO and test, as well as 300-millimeter capacity expansion in Taiwan.

Speaker #8: That is an increase year on year—pretty significant, about a 40 percent increase on equipment. And that just highlights the strong demand that we're seeing in this advanced packaging area.

Speaker #8: On the commitment side, let me touch on that. So, obviously, we're not going to talk about the details of commitments, but in general, that comes in multiple forms.

Speaker #8: There could be items like a prepayment agreement or loading agreements—other things that give us confidence that we're going to have high utilization in that facility once it's online.

Kevin Engel: There could be items like a prepayment agreement or loading agreements, other things that give us confidence that we're going to have high utilization in that facility once it's ready.

Speaker #8: ready. Thanks.

Charles Shi: Thanks. Maybe a follow-up question on the CapEx. At least for your Arizona facility, you do have the 35% investment tax credit. You may also have the CHIPS Act, the direct funding that's available to you. We know that there are US companies benefiting from those programs. There's a little bit of variety in terms of how they guide CapEx. Some were guiding gross CapEx, some were guiding net CapEx. Megan, this question is for you. What's that CapEx number? Is it the gross or is it the net? And if it's gross, how should we think about or how to flow through the benefits, government subsidies into the numbers, into our models? Thank you.

Speaker #7: Maybe I'll follow up with a question on CAPEX. So, at least for your Arizona facility, you do have the 35% investment tax credit. You may also have that CHIPS Act direct funding that's available to you.

Speaker #7: We know that the US companies benefiting from those programs, there's a little bit of variance in terms of how they guide CAPEX. Some were guiding growth.

Speaker #7: CAPEX—some were guiding net CAPEX. So, Megan, this is a question for you. What's that number, the CAPEX number? Is it the growth, or is it the net?

Speaker #7: And if it's growth, how should we think about, or how should we flow through the benefits—government subsidies—into the numbers, into our models? Thank you.

Speaker #9: Yeah, great question, Charles. So those government incentives, as well as the investment tax credits, as well as the grants, those are going to come in on a lag.

Megan Faust: Yeah, great question, Charles. So those government incentives, as well as the investment tax credits, as well as the grants, those are going to come in on a lag. So you're highlighting a really good point that the Arizona CapEx is going to be front-loaded. And so our Arizona investment most likely could peak in 2026 because we'll start to have those benefits come through subsequent to the investment periods. So to come around to your original question, there's really minimal offsets in our guide with regards to benefits. And going forward, we will net those. But this is a net position, but there's really minimal in the 2026 guide.

Speaker #9: So you're highlighting a really good point that the Arizona CAPEX is going to be front-loaded. And so our Arizona investment most likely could peak in '26, because we'll start to have those benefits come through subsequent to the investment periods.

Speaker #9: So, to come around to your original question, there's really minimal offsets in our guide with regards to invest benefits. And going forward, we have a net position, but there's really minimal in the 2026 guide.

Speaker #7: Thank you. And another reminder to the audience: to ask a question, press star 1. Please limit yourself to one question plus one follow-up question, so we can get through all the questions today in the time allotted.

Operator: Thank you. Another reminder to the audience, to ask a question, press star one. Please limit yourself to one question plus one follow-up question so we could get through all the questions today in the time allotted. Your next question comes from Craig Ellis with B. Riley Securities. Please state your question.

Speaker #7: And your next question comes from Craig Ellis with B. Riley Securities. Please state your question.

Speaker #7: Question. Yeah, thanks for taking the question.

Craig Ellis: Yeah, thanks for taking the question. I wanted to follow up on some of the full year-end market color, which was very helpful. And as I do, Kevin, welcome. Good luck in the role, and I look forward to working with you. So I'll start with computing. In the 20% year-on-year growth, can you help us with color on how the potential size of the two data center HDFO programs might compare to the existing PC-related programs? And as you look at the data center contribution in 2026, would you expect those programs to be at full volume by the time we exit the year, or are they still ramping up as we exit the year? Just some additional color on how that plays out would be helpful.

Speaker #10: Question. I wanted to follow up on some of the full year-end market color, which was very helpful. And as I do, Kevin, welcome. Good luck in the role.

Speaker #10: And I look forward to working with you, so I'll start with computing. In the 20 percent year-on-year growth, can you help us with color on how the potential size of the two data center HDFO programs might compare to the existing PC-related programs?

Speaker #10: And as you look at the data center contribution in 2026, would you expect those programs to be at full volume by the time we exit the year?

Speaker #10: Or are they still ramping up as we exit the year? Just some additional color on how that plays out will be helpful.

Speaker #8: Okay. Hey, Craig, and thanks for the remarks. When we think about the compute segment, maybe I'll focus on the Q1 color first. We talk about 20 percent year-on-year growth for the year.

Kevin Engel: Okay. Hey, Craig, and thanks for the remarks. When we think about the compute segment, maybe I'll focus on the Q1 color first. We talk about 20% year-on-year growth for the year. What we're talking about there is, again, you need to remember that compute is obviously PC as well as data center. If we look at the PC market, in general, that's showing some headwinds. So I'd say that's relatively soft compared to data center. And if we pivot that over onto the technology side, when we look at the 2.5D and HDFO platforms, we're expecting that to nearly triple over the course of this year. Commenting on the devices that are ramping, we would expect one of those to be in very high volume. It'll be a pretty steep ramp. The other one is also ramping.

Speaker #8: What we're talking about there is, again, you need to remember that compute is obviously PC as well as data center. If we look at the PC market in general, that's showing some headwinds.

Speaker #8: So, I'd say that's relatively soft compared to data center. And if we pivot that over onto the technology side, when we look at the 2.5D and HDFO platforms, we're expecting that to nearly triple over the course of this year.

Speaker #8: Commenting on the devices that are ramping, we would expect one of those to be in very high volume. It'll be a pretty steep ramp.

Speaker #8: The other one is also ramping hard to project if it'll really be full volume towards the end of the year, but definitely meaningful revenue contribution.

Kevin Engel: Hard to project if it'll really be full volume towards the end of the year, but definitely meaningful revenue contribution.

Speaker #10: Got it. That's helpful. And then, Megan, going back to one of the questions Charles asked, just on investment, it certainly seems like you'll have a lot of help from credits and government funding next year.

Craig Ellis: Got it. That's helpful. And then, Megan, going back to one of the questions Charles asked just on investment, it certainly seems like you'll have a lot of help from credits and government funding next year. But to the extent that you would need to augment your current cash balance with supplements, are you able to take advantage of debt markets that historically have been very attractive, such as Japan, to provide any additional cash as we work through this first phase of increased investment?

Speaker #10: But to the extent that you would need to augment your current cash balance with supplements, are you able to take advantage of debt markets that historically have been very attractive, such as Japan, to provide any additional cash as we work through this first phase of increased investment?

Speaker #9: Hey, Craig. Yes, so as we had mentioned, a significant portion of funding will come from government incentives. On the total project, that could be upwards of $2.85 billion.

Megan Faust: Hey, Craig. Yes. So as we had mentioned, a significant portion of funding will come from government incentives on the total project. So that could be upwards of $2.85 billion. I also want to comment, before we talk about the debt capacity that we do have, I would say, commitments from customers. Also, we have some that have already been executed, and others that are in discussion. So we expect that that will also contribute to funding. And then as it relates to the Amkor finance piece, we have been preparing for this for some time to give us, I would say, the flexibility on how to manage that. So yes, we do have access to debt capacity in various forms, especially being at only 1.2x debt to EBITDA. So we are evaluating those options carefully, and we will manage that in order to optimize that return to shareholders.

Speaker #9: I also want to comment, before we talk about the debt capacity, that we do have, I would say, commitments from customers also. We have some that have already been executed and others that are in discussion.

Speaker #9: So we expect that that will also contribute to funding. And then, as it relates to the Amkor finance piece, we have been preparing for this for some time.

Speaker #9: To give us, I would say, the flexibility on how to manage that. So yes, we do have access to debt capacity in various forms.

Speaker #9: Especially being at only 1.2 times debt to EBITDA. So we are evaluating those options carefully, and we will manage that in order to optimize that return to shareholders.

Speaker #10: That's very helpful. Thank

Craig Ellis: That's very helpful. Thank you.

Speaker #10: you.

Speaker #7: Your next

Operator: Your next question comes from Randy Abrams with UBS. Please state your question.

Speaker #7: The question comes from Randy Abrams with UBS. Please state your question.

Speaker #11: Yes, hi, thank you. Yeah, my first question is to just touch more on the outlook outside of advanced packaging. For the other segments with single-digit growth, could you talk about the puts and takes within that for comms, the iOS versus Android, and also the SiP programs?

Randy Abrams: Yes. Hi. Thank you. Yeah, my first question wanted to just touch more on the outlook outside of the advanced packaging. The other segments for the single-digit growth, could you talk about the puts and takes within that for comms, the iOS versus Android, and also the SIP programs, if you expect much on the consumer or communication SIP, and then into the auto industrial? You just want to see a bit more color, what you're seeing across the other markets outside the compute.

Speaker #11: If you expect much on the consumer or communication SIP, and then into the auto industrial, I—across the other—just want to see a bit more color on what you're seeing in markets outside the compute.

Speaker #8: Hey, Randy. So let me have a couple of comments here. Some of this will be more market-driven data rather than what we're seeing internally.

Kevin Engel: Hey, Randy. So let me have a couple of comments here. So some of this will be more market-driven data rather than what we're seeing internally, but let me give you some color at least. On comms, obviously, market data would project that the phone units are roughly flat. I think there's some potential benefits there as there continues to be more of this shift towards premium tier. And typically, that would benefit AMKOR due to our content and the more premium phones. When we think in compute, again, the PC market projected to be slightly down on units. So that's a little bit of a headwind.

Speaker #8: But let me give you some color at least. On comms, obviously, market data would project that the phone units are roughly flat. I think there's some potential benefits there as there continues to be more of this shift towards premium tier.

Speaker #8: And typically, that would benefit Amkor due to our content and the more premium phones. When we think in compute, again, the PC market is projected to be slightly down on units.

Speaker #8: So that's a little bit of a headwind. But then, we continue to expect the shift to AI applications, as well as more ARM-based—where, again, that benefits Amkor a little bit, basically because we're moving from a vertically integrated, kind of IDM model versus an outsourced, fabless company-type model with ARM.

Kevin Engel: But then we continue to expect the shift to AI applications as well as more Arm-based, where, again, that benefits Amkor a little bit, basically because we're moving from a vertically integrated kind of IDM model versus an outsourced or sorry, outsourced fabless company-type model with Arm. Then on auto and industrial, again, expected overall unit sales in cars to be roughly flat, continued migration over to hybrid and EVs. That's helping to continue to increase the semi-content per car. So we basically are seeing on the mainstream side, very slow recovery. We have seen three-quarters of positive direction in mainstream, and we expect to continue that slow progression out of the trough. And then on the advanced side, again, think about things like computing in the car, ADAS, infotainment. That's an area where we're seeing very strong growth for this year. So very, very positive momentum there.

Speaker #8: Then, on auto and industrial, again, we expect overall unit sales in cars to be roughly flat. There's a continued migration over to hybrid and EVs, which is helping to continue to increase the semi-content per car.

Speaker #8: So, we basically are seeing, on the mainstream side, very slow recovery. We have seen three quarters of positive direction in mainstream, and we expect to continue that slow progression out of the trough.

Speaker #8: And then, on the advanced side, again, think about things like computing in the car, ADAS, infotainment. That's an area where we're seeing very strong growth for this year.

Speaker #8: So, very positive momentum there. So I think overall—and then on the consumer side, again, I think that'll be heavily driven by consumer sentiment and new product launches, potentially.

Kevin Engel: So I think overall, and then on the consumer side, again, I think that'll be heavily driven by consumer sentiment and new product launches, potentially. But in general, what we see across that kind of non-AI, non-advanced auto area is that it will be single-digit-type growth.

Speaker #8: But in general, what we see across that kind of non-AI, non-advanced auto area is that it will be single-digit type growth.

Speaker #11: Okay, thanks for the color on those. And if I could follow up, then—it might be a question more for Megan—on the outlook for the margins. I think first, just into first quarter, is that the leverage effect and the one-time coming out, for the lower guide for Q1?

Randy Abrams: Okay. Thanks for the color on those. If I could follow up, then it might be a question more for Megan on the outlook for the margins. I think first, just into first quarter, is that the leverage effect in the one-time coming out for the lower guide for Q1? And then as we go through the year with the mix more toward the advanced packaging, which I think you said is accretive, but want to see as it ramps in the ramp-up phase, if you're at the point it's accretive, how to think about the incremental leverage with the stronger growth out of the compute segment.

Speaker #11: And then as we go through the year, with the mix more toward the advanced packaging—which I think you've said is accretive—but I want to see, as it ramps in the ramp-up phase, if you're at the point it's accretive. How should we think about the incremental leverage with the stronger growth out of the compute?

Speaker #11: segment. Thanks,

Megan Faust: Thanks, Randy. Yeah. So for Q1, the guide at the midpoint of 13%, there is the, I'm going to say, asset sale that happened in Q4 that's going to impact that flow-through. Without that, the sequential flow-through would pretty much be in line with our 30% model. Sequentially, there is some favorable product mix, and then that's being offset by some incremental costs. When I look year-over-year, there is a, I would say, material content impact as well as some potential currency headwinds that are impacting that. So Q1 is typically our seasonally lowest top line, but also bottom line. As it relates to the full year, we're able to see good progression in the profit initiatives that Kevin had outlined in prepared remarks, such that we would anticipate being able to achieve that 30% incremental flow-through absent the one-time asset sale.

Speaker #9: Randy: Yeah. So for Q1, the guide at the midpoint of 13%. There is the, I'm going to say, asset sale that happened in Q4 that's going to impact that flow-through.

Speaker #9: Without that, the sequential flow-through would pretty much be in line with our 30% model. Sequentially, there is some favorable product mix, and then that's being offset by some incremental costs.

Speaker #9: When I look year over year, there is, I would say, material content impact as well as some potential currency headwinds that are impacting that.

Speaker #9: So Q1 is typically our seasonally lowest top line, but also bottom line. As it relates to the full year, we're able to see good progression in the profit initiatives that Kevin had outlined in the prepared remarks.

Speaker #9: So that we would anticipate being able to achieve that 30% incremental flow-through absent the one-time asset sale.

Speaker #11: Okay. Great. Thanks, Kevin and Megan.

Randy Abrams: Okay. Great. Thanks, Kevin and Megan.

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Q4 2025 Amkor Technology Inc Earnings Call

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Q4 2025 Amkor Technology Inc Earnings Call

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Q4 2025 Amkor Technology Inc Earnings Call

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