Is Amkor Technology (AMKR) Still a Buy After a Record Rally?

Amkor Technology (AMKR) has experienced a meteoric rise in 2025, with its stock price surging 79.5% between August and December 2025, driven largely by a 77.2% increase in its price-to-earnings (P/E) multiple. This rally has sparked a critical question for investors: Is Amkor still a compelling buy, or has its valuation outpaced the sustainability of its growth in advanced packaging? To answer this, we must dissect its valuation divergence from industry peers and assess the durability of its competitive advantages in a rapidly evolving market.

Valuation Divergence: Undervalued or Overhyped?

Amkor's current valuation metrics suggest a compelling story. As of December 2025, its P/E ratio stands at 25.7x, significantly lower than the 35.7x average for U.S. semiconductor peers and the 33.7x industry benchmark. This discrepancy implies that Amkor is trading at a discount relative to its growth trajectory, particularly given its 31% sequential revenue increase in Q3 2025, driven by robust demand in advanced packaging for communications and computing applications.

The company's enterprise value-to-EBITDA (EV/EBITDA) ratio of 9.77 further underscores its affordability. For context, TSMC (TSM), a dominant player in semiconductor manufacturing, trades at an EV/EBITDA of 17.0x according to market analysis. While TSMC's premium reflects its global scale and profitability, Amkor's lower multiple suggests room for re-rating if its advanced packaging growth continues to outperform expectations.

However, caution is warranted. Amkor's price-to-sales (P/S) ratio has risen 53% over six months, reflecting investor optimism. Yet, this metric must be contextualized against its operating margins. With advanced packaging accounting for 88% of its packaging services in Q3 2025 according to financial reports, Amkor's ability to convert revenue into profits will be critical in justifying its valuation.

Growth Sustainability: Can Advanced Packaging Deliver?

The advanced packaging market is projected to grow at a compound annual growth rate (CAGR) of 5.7% to 11.73% between 2025 and 2030, with market size estimates ranging from $51.62 billion to $89.89 billion by 2030. Amkor is well-positioned to capitalize on this expansion, leveraging its expertise in flip chip packaging-a technology that accounted for 38% to 40% of the global advanced packaging market in 2024.

The company's competitive advantages are multifaceted. First, its cost-effective fan-out wafer-level packaging (FOWLP) solutions cater to high-growth sectors like consumer electronics and AI. Second, Amkor's global manufacturing footprint allows it to navigate supply chain diversification trends, a critical factor as geopolitical tensions reshape sourcing strategies according to market analysis. Third, its alignment with the U.S. CHIPS and Science Act-a $52.7 billion initiative to bolster domestic semiconductor capabilities-provides a tailwind for long-term growth according to government reports.

Capital expenditures of $950 million in 2025 underscore Amkor's commitment to scaling its advanced packaging capacity, particularly for AI-related technologies according to financial disclosures. This investment aligns with market dynamics: AI and high-performance computing are expected to drive 9.5% CAGR in the global advanced packaging market from 2024 to 2030 according to industry forecasts.

Risks and Considerations

While Amkor's fundamentals are strong, investors must weigh several risks. First, the variability in market growth projections-from 5.7% to 11.73% CAGR-reflects uncertainty about demand drivers. If AI adoption or 5G deployment slows, Amkor's growth could falter. Second, the company's reliance on advanced packaging exposes it to technological obsolescence. Competitors like TSMC and ASML are also investing heavily in packaging innovations, though their financial metrics remain opaque according to valuation analysis.

Finally, Amkor's valuation, while attractive relative to peers, assumes continued execution. A misstep in capital allocation or margin compression could erode investor confidence.

Conclusion: A Buy, But With Caution

Amkor Technology remains a compelling investment opportunity, but its valuation must be viewed through the lens of both its current affordability and the durability of its growth. The company's undervalued multiples, strategic alignment with AI and government initiatives, and dominant position in advanced packaging suggest strong upside potential. However, investors should monitor execution risks and macroeconomic headwinds. For those with a medium-term horizon and a tolerance for volatility, Amkor's rally may still be justified by its long-term prospects.