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AMKOR Technology (AMKR) Q2 Earnings call transcript Jul 29, 2024

AInvestTuesday, Jul 30, 2024 3:27 pm ET
2min read

Amkor Technology, a leading provider of semiconductor packaging and test services, recently held its Second Quarter 2024 Earnings Conference Call, shedding light on its financial performance and strategic outlook. The company reported a solid second quarter, with revenue of $1.46 billion and EPS of $0.27, reflecting a 7% sequential increase driven by demand for advanced packaging, particularly in premium tier smartphones and 2.5D technology for AI solutions.

Strategic Achievements and Future Growth Opportunities

During the call, Amkor's management highlighted several strategic achievements and future growth opportunities. The company successfully brought online additional capacity for 2.5D technology in Korea and qualified advanced SiP and memory technology in Vietnam to support production ramps in the third quarter. Moreover, Amkor announced a significant milestone in establishing a U.S. manufacturing presence for advanced packaging, aligning with the U.S. Department of Commerce for up to $400 million in grants under the Chips and Science Act. This move is expected to support building a new facility in Arizona, enabling advanced packaging and test for high-performance computing, AI, communications, and automotive markets.

End Market Dynamics and Technology Leadership

Amkor's management provided insights into the current dynamics of each end market, including communications, automotive, computing, and consumer markets. The company experienced a 10% sequential increase in communications end market revenue, driven by bills for the full launch of premium tier smartphones within the iOS ecosystem. Despite a slight decline in the Android supply chain, Amkor's advanced packaging technology supports a wide range of applications, positioning it well for future growth in AI devices and ARM-based PCs.

Financial Outlook and Strategic Focus

Looking ahead, Amkor expects third quarter revenue to grow significantly, with a midpoint of $1.835 billion, reflecting a 26% sequential increase. This growth is attributed to advanced packaging in support of the seasonal launch of premium tier smartphones, the ramp of a new consumer wearable device, and continued strong demand in high-performance computing and ARM-based PCs. Despite the slower-than-expected recovery in the automotive and industrial markets, Amkor remains optimistic about the long-term drivers for growth in these sectors, particularly in semiconductor content per car and the proliferation of ADAS, electrification, infotainment, and telematics.

Investor Inquiries and Market Trends

The earnings call also featured a Q&A session with key shareholders and investors, providing valuable insights into their concerns and priorities. These interactions revealed investors' interest in Amkor's strategic positioning, financial outlook, and market trends, particularly in the areas of advanced packaging, AI devices, and the U.S. manufacturing presence.

Conclusion

Amkor Technology's Second Quarter 2024 Earnings Conference Call highlighted the company's solid financial performance, strategic achievements, and future growth prospects. With a focus on advanced packaging technology, a strong technology leadership position, and a diversified global footprint, Amkor is well-positioned to capitalize on the secular growth drivers in the semiconductor industry. The company's strategic investments in the U.S. manufacturing presence and partnerships with lead customers underscore its commitment to innovation and growth.

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