Amkor Technology, Inc. Q2 FY2025 earnings call

CEO Giel Rutten noted Amkor delivered strong second quarter revenue growth, with all end markets showing double-digit sequential growth. The team adapted quickly to support customers amidst complex global conditions, accelerating product transfers and volume increases. The company monitors export controls and trade policies closely. In end markets, communications benefited from the iOS ecosystem, computing saw growth from personal computing ramps and memory, automotive/industrial had a growth inflection, and consumer saw gains in wearables. Amkor is working on advanced packaging solutions for AI edge devices, launched the first High-Density Fan-Out product in high-volume production, test revenue in computing grew ~50% year-over-year in H1 2025, with test operations expanding in Korea and CapEx focused on expanding capacity for leading-edge tech in Korea and Taiwan.

Amkor's second quarter revenue was $1.51 billion, marking a 14% sequential increase. Within end markets, communications grew 15% sequentially driven by the iOS ecosystem; Android revenue remained flat sequentially but saw a 7% year-on-year increase. Computing revenue rose 16% from the first quarter, propelled by new product ramps in personal computing and growth in memory. The automotive and industrial markets experienced an 11% sequential revenue growth, with Q2 representing a 6% year-on-year growth inflection point after 8 consecutive quarters of year-on-year declines. Consumer revenue increased 16% sequentially due to market share gains in wearables and broad-based demand improvement in traditional products.

Amkor expects third quarter revenue between $1.875 billion and $1.975 billion, a 27% sequential growth at midpoint. Gross margin is projected to be between 13% and 14.5%. Operating expenses for the third quarter are expected to be around $125 million. The full year effective tax rate is estimated at around 20% excluding discrete items. Third quarter net income is anticipated to be between $85 million and $120 million, resulting in EPS between $0.34 and $0.48. The 2025 CapEx forecast remains unchanged at $850 million, with investments focused on expanding capacity and capability for leading-edge technology.

Export controls and trade policies pose potential impacts on operations. There is underutilization in Japan's manufacturing facilities, which needs optimization. Foreign currency headwinds affected the second quarter gross margin.

Q: Joe Moore inquired about gross margin in the September quarter and long-term legacy facility consolidation.

A: Giel Rutten and Megan Faust discussed margin impact from product mix, manufacturing base transitions including Vietnam, Korea, and Japan, and strategic investments.

Q: James Schneider asked about the ramp of the 2.5D program.

A: Giel Rutten mentioned 2.5D is important, affected by trade restrictions, and High-Density Fan-Out is a critical technology with products already launched.

Q: Peter Peng asked about third quarter demand pull-in.

A: Giel Rutten stated no active pull-in observed, but there were some last-minute spot orders.

Q: Ben Reitzes asked about third quarter guidance and iOS business.

A: Giel Rutten and Megan Faust discussed the third quarter outlook and iOS business ramp.

Q: Randy Abrams asked about communication technology trends and material costs.

A: Giel Rutten and Megan Faust talked about AI on-device in communication and material cost constraints.

Q: Tom Diffely asked about the auto industrial market and Japan factory closures.

A: Giel Rutten discussed auto market trends and Japan factory rationalization.

Q: Ross Cole asked about the U.S. restrictions lift and TSMC Arizona plan.

A: Giel Rutten talked about the impact of U.S. restrictions and TSMC partnership.

Q: Steve Barger asked about auto industrial customer conversations and test equipment investment.

A: Giel Rutten discussed auto customer inputs and test equipment upgrade plans.