Amkor Technology, Inc. Q3 FY2025 earnings call

• CEO Giel Rutten announced retirement at end of 2025, with Kevin Engel as successor. - Amkor delivered strong third quarter with revenue $1.99 billion and EPS $0.51, exceeding guidance. Revenue up 31% sequentially due to advanced packaging demand. - Strategic initiatives: investing in technology leadership, building supply chain resilience, deepening customer partnerships. Groundbreaking of Arizona advanced packaging and test campus with $7B investment. - Operational efficiency steps in Japan to reduce manufacturing costs and optimize footprint, expecting margin improvement by end of 2027.

Communications: Revenue increased 67% sequentially and 5% year-on-year, with Q4 expected to be up more than 20% year-on-year. Computing: Revenue increased 12% sequentially and 23% year-on-year, anticipating modest sequential decline in Q4 but continued year-on-year growth. Automotive and Industrial: Increased 5% sequentially and 9% year-on-year, with Q4 expected stable sequentially and around 20% year-on-year growth. Consumer: Increased 5% sequentially, but was down 5% year-on-year, with further decrease expected in Q4 and slight decline in traditional consumer applications.

• Q4 revenue expected $1.775 billion-$1.875 billion, 8% sequential decline, 12% year-on-year increase. - Gross margin projected 14%-15% including ~$30M asset sale benefit. - Net income forecast $95M-$120M, EPS $0.38-$0.48. - 2025 CapEx increased to $950M to support Arizona campus expansion.

• Gross margins constrained by product mix with higher material content and manufacturing costs. - Seasonal slowdown in some segments like iOS in Q4. - Dependence on key customers and market trends affecting performance.

Q: With regard to the gross margin guidance in the fourth quarter, if you take out the asset sale, how much lower is it and what are the pressures?

A: Megan Faust said normalizing for asset sale, margin is in line with model, with higher material content and manufacturing costs due to leading-edge advanced technology.

Q: Could you talk more about the communications segment, especially Android dynamics?

A: Giel Rutten said Communications segment has continued strength in Android, with slight tapering off in iOS, and expects Q4 Communication to be up more than 20% year-on-year.

Q: On the Compute opportunities, how about the pipeline for AI and networking and CoWoS-S capacity?

A: Giel Rutten said high-density fan-out technologies are ramping, with products moving into production, and sees strong outlook for AI and networking opportunities.

Q: On the $7 billion investment for Arizona, how much is due to capacity vs construction costs?

A: Giel Rutten said increased investment is exclusively related to increased capacity, not construction cost increases.

Q: On the new facility in Arizona, how much of 2025 CapEx is for Arizona?

A: Megan Faust said 2025 CapEx increase to $950M is driven by Arizona, with 2026 CapEx guidance to be given at next earnings call.

Q: On RDL formats replacing silicon interposer, how much CapEx is for RDL and impact on margins?

A: Giel Rutten said a significant part of CapEx is for high-density fan-out/RDL-based technology, with major ramp expected and significant commitment to support customers.

Q: On Computing growth and Communications Android strength, could you provide more color?

A: Giel Rutten said Computing has broad-based strength with AI proliferation driving growth, and Android has trend towards higher-end devices with inventory digested, showing positive outlook.