Amkor Technology's Q4 2024: Diverging Views on Automotive Outlook, Capacity Utilization, and Margin Expectations

These are the key contradictions discussed in Amkor Technology's latest 2024Q4 earnings call, specifically including: Automotive Market Outlook, Capacity Utilization, and Gross Margin Expectations:



Financial Performance and Market Dynamics:
- Amkor's Fourth Quarter 2024 revenue was $1.63 billion, and EPS was $0.43, meeting guidance.
- For the Full Year 2024, revenue was $6.3 billion, marking a 3% decline year-on-year.
- The decline was attributed to weakness in automotive and industrial end markets and prolonged cycle and low utilization.

Computing and Communication Market Growth:
- The computing end market revenue increased 13% sequentially and 16% for the full year.
- Growth was driven by strong demand for AI GPUs and ARM-based PCs, though dynamics within the AI data center supply chain impacted expectations.
- The communications end market revenue declined 25% sequentially due to changes in build patterns for new iOS phones and a socket that Amkor did not participate in.

Automotive and Industrial Market Challenges:
- Automotive and industrial end market revenue declined 8% sequentially, with a full-year decline of 16%.
- The decline was due to macroeconomic weakness and tight inventory control, with revenue from mainstream products declining nearly $300 million since 2022.
- Amkor remains optimistic about advanced packaging programs in automotive, expecting growth in the mid-teens percent in 2025.

Geographic Expansion and Investment:
- Amkor qualified a new Vietnam facility and secured $407 million in CHIPS funding for a planned Arizona facility.
- These expansions are part of Amkor's strategy to strengthen technology leadership in advanced packaging, expand its global footprint, and partner with lead customers in growth markets.