Amkor Technology NASDAQ: AMKR reported record first-quarter 2026 results and issued a second-quarter outlook that reflects continued momentum across most end markets, while management highlighted ongoing supply-chain constraints for certain materials and increased cost pressure tied in part to geopolitical developments.
Record Q1 revenue, margin improvement driven by mix and execution
CEO Kevin Engel said Amkor “delivered a strong start to the year,” posting record first-quarter revenue of $1.68 billion, up 27% year-over-year, with growth “across all end markets.” Engel added that communications delivered the strongest growth and that Amkor’s mainstream business posted its “fourth consecutive quarter of both sequential and year-over-year growth.”
CFO Megan Faust said revenue came in above the midpoint of guidance “driven by stronger than expected performance across all end markets, except computing, where we saw softness in PCs and laptops.” Earnings per diluted share were $0.33, and Engel attributed the year-over-year improvement to “disciplined execution and continued progress on our margin initiatives.”
Faust reported gross margin of 14.2%, which exceeded the high end of guidance “primarily due to favorable product mix.” Gross profit was $239 million, up 52% from last year, driven by “increased volume and focused cost management.” Operating income was $100 million (a 6% operating margin), improving 360 basis points year-over-year. The effective tax rate was 12.8%, which Faust said was below the company’s full-year target due to “discrete tax benefits recognized in the quarter.” EBITDA was $285 million (a 16.9% margin).
End-market commentary: strength in communications, AI data center offsetting PC softness
In communications, Faust said revenue increased 42% year-over-year, citing “healthy demand across premium tier smartphones, especially iOS,” and adding that Android demand “also remained healthy.” For the second quarter, she said communications revenue is expected to be “stronger than seasonal,” increasing mid- to high-single digits sequentially on continued iOS strength.
Computing revenue rose 19% year-over-year, with Faust pointing to “record revenue within AI data center applications” that was “partially offset by softness in PCs and laptops.” She guided to mid-single-digit sequential growth in computing in Q2, driven by a ramp of a new HDFO (high-density fan-out) data center CPU device. Engel later told analysts the CPU program would start ramping in Q2, with “meaningful revenue contribution in the third quarter” and continued ramp “beyond that, even going into 2027 and beyond.”
Automotive and industrial revenue increased 28% year-over-year. Faust said ADAS and infotainment drove record advanced-technology revenue in the segment, while mainstream automotive/industrial continued to recover, with Q1 marking the fourth straight quarter of sequential growth. She projected mid-single-digit sequential growth for the segment in Q2.
Consumer revenue increased 4% year-over-year, with Faust citing broad-based demand improvement. She said Q2 consumer revenue is expected to grow “low teens” sequentially due to wearable products.
Supply dynamics, pricing actions, and second-half gross margin expectations
Engel said the semiconductor backdrop remains “dynamic,” and the company is monitoring export controls and trade policies while managing “supply dynamics around advanced silicon, advanced substrates, and memory.” He noted that some customer-supplied materials have been delayed, creating “nonlinear loading,” and said Amkor is prioritizing production “where materials are available to minimize impact.”
Engel also said uncertainty related to geopolitical events in the Middle East has increased and, while Amkor has not seen supply disruptions to date, “conditions in the region are putting additional pressure on material pricing.” He said the company is working with customers to offset cost increases across the supply chain.
In response to a question about second-half gross margins, Engel and Faust described a combination of cost and pricing dynamics. Engel said Amkor is seeing the clearest supply variability in “advanced silicon,” describing scenarios where forecasted wafers or memory do not arrive and demand is shifted to other available materials. He said the company has “not really seen a utilization impact,” but acknowledged that some demand is “getting pushed forward,” and expects similar conditions in Q2 as in Q1.
Faust said the company views pricing as “constructive” and expects pricing actions to cover “most of those cost increases.” Looking to the second half, she said Amkor expects gross margins to rise into the “mid- to high-teens level,” supported by three factors: pricing, increased utilization, and product mix benefits from the anticipated compute ramp and higher-value advanced packaging.
Engel added that pricing initiatives began in Q1, initially focused on Japan, and have expanded to most customers. He said customers generally understand that costs are rising and have shown “ability and willingness” to help, with pricing expected to increase through the year to offset material cost inflation.
Utilization improves; advanced lines filling as Amkor prepares for ramps
On utilization, Engel said first-quarter utilization was in the “low 70s%,” compared with utilization “in the 50s%” in the year-ago quarter. For Q2, he said utilization is expected to remain in the 70s% with a “slight improvement” from Q1. He also said advanced lines are “filling up” and reaching high utilization levels, while some mainstream factories still have lower utilization despite improvements in the Philippines.
Engel highlighted capacity and footprint actions intended to support advanced packaging growth, including expanding manufacturing space in Korea and building a new test building there that is on track for completion at the end of 2026. He also said Amkor is migrating some system-in-package products from Korea to Vietnam to provide additional room in Korea and improve Vietnam utilization, noting there is still headroom in Vietnam, including clean room space “yet to be facilitated.”
Q2 guidance, CapEx plans, and Arizona timeline
For the second quarter, Faust guided revenue to $1.75 billion to $1.85 billion, a 7% sequential increase at the midpoint. Gross margin is projected at 14.5% to 15.5%. Operating expenses are expected to be approximately $120 million, which includes a $20 million gain on the sale of real estate. Net income is forecast at $105 million to $130 million, with EPS of $0.42 to $0.52. Faust reiterated a full-year 2026 effective tax rate target of around 20%.
Amkor ended the quarter with $1.8 billion in cash and short-term investments and $2.9 billion in total liquidity. Total debt was $1.4 billion, and Faust said the debt-to-EBITDA ratio was 1.1x.
Faust maintained the company’s 2026 CapEx estimate of $2.5 billion to $3.0 billion, with 65% to 70% allocated to facilities expansion (including phase one of the Arizona campus), 30% to 35% to HDFO, test, and other advanced packaging capacity, and the remainder to R&D and quality programs. She said CapEx timing is expected to be “more of a 30% first half, 70% second half year,” adding that first-quarter spending was lower than expected due to payment timing, with CapEx payables increasing by $200 million.
On Arizona, Engel said construction is progressing as the company wraps foundation work and moves toward building steel construction, with phase one planned to be completed in 2027. Faust said the company expects elevated facilities expansion CapEx through 2027, then to begin recognizing depreciation and other startup costs as it builds and trains the workforce ahead of planned production in 2028. Those preparation costs are expected to be recognized in OpEx until programs are qualified, at which point they move to cost of goods sold. Faust said the ramp is anticipated to dilute operating income margin by approximately 1% to 2% beginning in 2027, improving in 2028. She added that revenue from Arizona is expected to be “modest” in 2028 and then scale in 2029, with “meaningful revenue” exiting 2029 and a fuller impact moving into 2030, subject to customer qualification.
Faust also discussed funding support for the planned Arizona investment, citing CHIPS grant funding of $400 million and a 35% investment tax credit, which she said together represent “pretty meaningful support of $2.8 billion,” along with customer support arrangements and Amkor’s liquidity and potential debt capacity.
Management said Amkor will provide a deeper strategic update at its investor day on May 21.
About Amkor Technology NASDAQ: AMKR
Amkor Technology, Inc NASDAQ: AMKR is a leading provider of outsourced semiconductor packaging and test (OSAT) services, supporting integrated device manufacturers and semiconductor foundries worldwide. The company offers a broad range of advanced packaging solutions, including wafer bumping, flip chip, system-in-package and ball grid array technologies, designed to meet the performance, power and form-factor demands of applications across consumer electronics, automotive, communications and industrial markets.
In addition to packaging, Amkor delivers comprehensive test services such as wafer probing, final test, system-level test and digital, analog and mixed-signal testing, enabling customers to accelerate time-to-market and reduce total costs.
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