Amkor Technology Q2 Earnings Call Highlights

Key Points

• Record Q2 performance: Amkor reported revenue of $1.9 billion, up 26% year over year, while EPS reached $0.70. Higher utilization drove gross margin to 16.8%, with operating income rising to $200 million.
• Computing and automotive led growth: Computing revenue reached a record on data-center demand and is expected to accelerate nearly 30% sequentially in Q3, while automotive and industrial revenue also posted a quarterly record. Communications remains a weakness, with Android-related declines and a projected high-single-digit sequential drop in Q3.
• Strong outlook and investment: Amkor forecast Q3 revenue of $1.95 billion to $2.05 billion and gross margin of 18.5% to 19.5%. The company maintained its $2.5 billion-$3 billion 2026 capital-expenditure plan and is expanding advanced-packaging capacity through projects in Arizona, Korea and partnerships with TSMC and NVIDIA.

Amkor Technology NASDAQ: AMKR reported record second-quarter revenue of $1.9 billion, up 13% sequentially and 26% from a year earlier, as growth in computing and automotive and industrial markets helped the semiconductor packaging and test company exceed the high end of its guidance.

Chief Executive Officer Kevin Engel said growth was broad-based, with year-over-year increases across every end market. Computing and automotive and industrial each reached quarterly records, while mainstream revenue posted its fifth straight quarter of year-over-year growth.

“Earnings per share was $0.70, a significant increase from the prior year, reflecting the benefits of higher utilization,” Engel said. The company said average utilization across its manufacturing network improved from the 50% range into the 70% range during the first half, with several technology platforms operating at full capacity.

Second-Quarter Results and Profitability

Chief Financial Officer Megan Faust said second-quarter gross margin was 16.8%, up more than 250 basis points sequentially. Gross profit rose 33% from the first quarter to $319 million, while operating income reached $200 million, representing an operating margin of 10.5%.

• Net income was $174 million, and earnings per share were $0.70.
• EBITDA was $400 million, with an EBITDA margin of 21%.
• Operating expenses totaled $119 million and included a $21 million gain from the sale of real estate.
• The effective tax rate was 14%, aided by $14 million in net discrete tax benefits.

For the first half of 2026, revenue increased 26% year over year, gross margin expanded 360 basis points, operating income more than doubled, and earnings per share more than tripled from the first half of 2025, according to Faust.

The company held $2.5 billion in cash and short-term investments as of June 30, with total liquidity of $3.6 billion. Total debt was also $2.5 billion, and debt to EBITDA stood at 1.8 times. Amkor issued $1.15 billion of 0% convertible debt in early May to support its investment program.

Computing Momentum Offsets Communications Weakness

Computing revenue increased 20% sequentially in the second quarter, reaching a record level on broad data-center demand. Amkor expects computing revenue to accelerate by nearly 30% sequentially in the third quarter, driven by AI data-center demand and a ramp in a high-density fan-out, or HDFO, data-center CPU program.

Automotive and industrial revenue also set a quarterly record, rising 17% sequentially. The company cited advanced driver-assistance systems as the primary growth driver, supported by rising semiconductor content and demand for advanced packaging in next-generation vehicle platforms. Amkor expects mid-single-digit sequential growth in the segment during the third quarter.

Consumer revenue climbed 15% sequentially, led by Internet-of-Things demand, and is expected to grow by a mid-teens percentage rate in the third quarter.

Communications revenue rose 6% sequentially in the second quarter, supported by double-digit growth in the iOS ecosystem. However, Android revenue declined 20%, which management attributed to memory supply dynamics. Amkor expects communications revenue to decline by a high-single-digit percentage sequentially in the third quarter, an outcome the company said differs from typical seasonal patterns.

Management cited three drivers behind the outlook: the ongoing transfer of system-in-package, or SiP, production to Vietnam, memory supply constraints, and changing customer build patterns. Engel said approximately half of the departure from a typical third-quarter seasonal increase stemmed from market factors, while the remaining half was related to the SiP transition.

The transfer is intended to build scale and improve efficiency in Vietnam while freeing capacity in Korea for higher-value advanced computing products. Engel said the impact will not be limited to one quarter for all applications, with one area expected to face a headwind through the fourth quarter and the first half of next year.

Third-Quarter Outlook

Amkor forecast third-quarter revenue of $1.95 billion to $2.05 billion, with net income of $180 million to $205 million and earnings per share of $0.72 to $0.82. The company projected gross margin of 18.5% to 19.5% and operating expenses of approximately $140 million.

Faust said the expected gross-margin improvement in the third quarter will be driven predominantly by product mix, as a steep computing ramp coincides with lower communications revenue. In the second quarter, roughly two-thirds of the sequential gross-margin expansion came from volume and utilization, while one-third came from favorable product mix, she said.

Management said gross-margin trends beyond the third quarter will depend primarily on utilization and mix. It also noted that future results will face a burden from the ramp of underutilized U.S. manufacturing capacity, including depreciation and other effects from the Arizona project.

Partnerships and Capacity Expansion

Engel highlighted recently announced strategic agreements with Taiwan Semiconductor Manufacturing Co. and NVIDIA. The 10-year agreement with TSMC establishes a framework to expand advanced packaging and test capacity and support a more integrated semiconductor supply chain in Arizona, Amkor said.

The company’s multiyear NVIDIA partnership is focused on advanced packaging and test for next-generation AI infrastructure. Engel said the agreement does not represent a step-change in Amkor’s usual research-and-development model, noting that the company typically directs 3% to 5% of capital spending toward R&D activities. He said a customer prepayment associated with the arrangement is expected in 2027 and would be returned through services provided in the U.S. over an expected five- to 10-year period.

Amkor said Phase 1 of its Arizona facility is now fully committed. Construction remains in progress, while the company evaluates future expansion. It is also building a new assembly and test facility in Songdo, Korea, that is scheduled for completion by year-end, and expanding clean-room capacity in Gwangju for data-center and advanced-packaging opportunities expected in 2028 and beyond.

For 2026, Amkor maintained its capital-expenditure outlook of $2.5 billion to $3 billion. The company expects 65% to 70% of that spending to go toward facility expansions, including Arizona, while 30% to 35% is planned for HDFO, test and other advanced-packaging capacity.

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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