Financial Performance - Net sales decreased by $185.4 million or 2.9% to $6,317.7 million in 2024 from $6,503.1 million in 2023, primarily due to lower sales in automotive and industrial markets [239]. - Gross profit for 2024 was $933.2 million, down from $943.2 million in 2023, reflecting a gross margin of approximately 14.8% [326]. - Operating income decreased to $438.5 million in 2024 from $470.3 million in 2023, indicating a decline of 6.8% [326]. - Net income attributable to Amkor for 2024 was $354.0 million, compared to $359.8 million in 2023, representing a decrease of 1.1% [326]. - Comprehensive income attributable to Amkor for 2024 was $345.2 million, down from $359.5 million in 2023 [329]. - Income before taxes for 2024 was $431,016 thousand, a decrease of 2.0% from $443,841 thousand in 2023 [411]. - Net income for the year ended December 31, 2024, was $355,535, a decrease of 1.6% compared to $362,131 in 2023 [336]. Expenses and Margins - Gross margin increased to 14.8% in 2024 compared to 14.5% in 2023, attributed to the extension of the estimated useful life of test equipment and favorable foreign currency exchange movements [240]. - Operating income margin decreased to 6.9% in 2024 from 7.2% in 2023, primarily due to increased employee compensation costs and start-up costs at the Vietnam Facility [241]. - Research and development expenses decreased by 8.2% to $162.9 million in 2024 compared to 2023, due to the utilization mix of assets shared with manufacturing [250]. - Total operating expenses increased to $494.8 million in 2024 from $472.9 million in 2023, reflecting a rise of 4.6% [326]. Cash Flow and Investments - Net cash provided by operating activities was $1,088.9 million for 2024, down from $1,270.0 million in 2023, primarily due to changes in working capital and lower operating profits [242]. - Free cash flow for 2024 was $359,275 thousand, a decrease from $533,585 thousand in 2023 [282]. - Payments for property, plant, and equipment were $743,796 in 2024, slightly down from $749,467 in 2023 [336]. - The company reported a net cash used in investing activities of $800,324 in 2024, compared to $951,910 in 2023, indicating a decrease of 15.9% [336]. Debt and Capital Expenditures - Capital expenditures totaled $743.8 million in 2024, representing 11.8% of net sales, focused on investments in advanced packaging and test equipment [242]. - As of December 31, 2024, total debt was $1,159.5 million, with $236.0 million due within 12 months [267]. - The company expects 2025 capital expenditures to be approximately $850 million, with 5% to 10% allocated for the Arizona Facility construction [277]. Taxation - Income tax expense for 2024 was $75,481 thousand, a decrease of $6,229 thousand (7.6%) from 2023, which was $81,710 thousand [254]. - The effective tax rate for 2024 was 17.5%, down from 18.4% in 2023, primarily due to lower tax rates in foreign jurisdictions [255]. - The total income tax expense for 2024 was $75,481 thousand, down from $81,710 thousand in 2023, reflecting a decrease of 7.5% [411]. Foreign Currency and Interest - Interest expense increased by 10.1% to $64.9 million in 2024 compared to 2023, primarily due to a decrease in capitalized interest for the Vietnam Facility [252]. - The company performed a sensitivity analysis indicating that a 10% appreciation of foreign currencies against the U.S. dollar could result in an operating income decrease of approximately $148 million for the year ended December 31, 2024 [301]. - The foreign exchange rate translation resulted in a loss of $8.8 million for the year ended December 31, 2024, recognized as an adjustment to equity through other comprehensive income [303]. Assets and Liabilities - Total assets increased to $6,944,328, up from $6,771,125, representing a growth of 2.55% year-over-year [332]. - Total current assets decreased to $3,073,472, down from $3,195,810, a decline of 3.82% [332]. - Total liabilities decreased slightly to $2,761,163 from $2,776,090, a decrease of 0.54% [332]. - Total stockholders' equity increased to $4,149,545, compared to $3,962,308, reflecting a growth of 4.73% [332]. Inventory and Receivables - The company reported a decrease in inventories to $310,910 from $393,128, a decline of 20.94% [332]. - The company sold accounts receivable totaling $158.6 million in 2024, down from $253.9 million in 2023 [263]. - As of December 31, 2024, total unbilled receivables amounted to $210.1 million, down from $260.8 million in 2023 [382]. Shareholder Returns - Total cash dividends paid in 2024 were $178.6 million, with future payments subject to Board discretion [275]. - Cash dividends declared increased to $0.72440 per common share, up from $0.30375, representing a growth of 138.36% [334]. Research and Development - The company has focused on developing innovative packaging and test technologies in high-growth markets, including artificial intelligence [341]. - Research and development expenses are expensed as incurred, focusing on new package designs and improving production efficiency [385]. Regulatory and Compliance - The company signed a Direct Funding Agreement for up to $407 million in government incentives under the CHIPS Act, contingent on meeting future milestones [265]. - The company recognizes that changes in tax laws or regulations could result in increased tax expenses and effective tax rates in the future [291].

Core Viewpoint - The recommendation for Amkor Technology (NASDAQ: AMKR) is a hold rating due to uncertain near-term outlook, competitive pressures, margin headwinds, and weak management guidance for 1Q25 [1] Group 1: Competitive Landscape - Amkor Technology faces competitive pressures from ASE Technology and TSMC, which may impact its market position and profitability [1] Group 2: Financial Performance - The company is experiencing margin headwinds due to underutilization, which could affect overall financial performance [1] Group 3: Management Guidance - Management has provided weak guidance for 1Q25, indicating potential challenges ahead for the company's performance [1] Group 4: Investment Strategy - The investment approach focuses on long-term investments while also considering short-term opportunities to uncover alpha, emphasizing a bottom-up analysis of individual companies [1]

Core Viewpoint - Amkor Technology (AMKR) has experienced a significant decline in stock performance recently, with a return of -12.8% over the past month, contrasting with the S&P 500's +3.9% and the semiconductor industry's +3.8% [2] Earnings Estimate Revisions - For the current quarter, Amkor Technology is projected to report earnings of $0.10 per share, reflecting a decrease of -58.3% year-over-year, with the Zacks Consensus Estimate dropping by -66.1% in the last 30 days [5] - The consensus earnings estimate for the current fiscal year stands at $1.47, indicating a slight increase of +2.8% from the previous year, but has decreased by -16.9% over the past month [5] - For the next fiscal year, the consensus estimate is $1.98, suggesting a growth of +35.1% compared to the prior year, although this estimate has also seen a decline of -8.8% recently [6] Revenue Projections - The consensus sales estimate for the current quarter is $1.28 billion, which represents a year-over-year decline of -6.6% [9] - For the current fiscal year, the revenue estimate is $6.33 billion, indicating a marginal increase of +0.2%, while the next fiscal year's estimate of $6.74 billion reflects a growth of +6.5% [9] Recent Performance and Surprise History - In the last reported quarter, Amkor Technology generated revenues of $1.63 billion, down -7% year-over-year, with an EPS of $0.43 compared to $0.48 a year ago [10] - The reported revenues were -1.3% below the Zacks Consensus Estimate of $1.65 billion, while the EPS exceeded expectations by +16.22% [11] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and revenue estimates three times as well [11] Valuation - Amkor Technology is currently graded A in the Zacks Value Style Score, indicating that it is trading at a discount compared to its peers [15] - The evaluation of the company's valuation multiples, such as P/E, P/S, and P/CF, is essential for determining whether the stock is overvalued, fairly valued, or undervalued [13][14]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $1.63 billion, with EPS of $0.43, meeting guidance [7] - Full year 2024 revenue was $6.3 billion, a 3% decline from the previous year [8] - Fourth quarter gross profit was $247 million, with a gross margin of 15.1%, an increase of 50 basis points from Q3 [23] - Full year gross profit was $933 million, with a gross margin of 14.8% [26] - Free cash flow for the full year was $359 million, with total liquidity of $2.3 billion [28] Business Line Data and Key Metrics Changes - Advanced Packaging revenue increased 3% year-over-year, with Advanced SiP reaching a record of $3.1 billion [9] - Communications revenue declined 25% sequentially in Q4, leading to a 7% decline for the full year [11] - Computing revenue increased 13% sequentially and 16% year-over-year, driven by AI GPUs and ARM-based PCs [13] - Automotive and Industrial revenue declined 8% sequentially and 16% year-over-year, with seven consecutive quarters of year-on-year declines [15][16] - Consumer revenue increased 10% for the full year, driven by a new wearable program [17] Market Data and Key Metrics Changes - Communications market expected to be muted in the first half of 2025, with flat year-on-year revenue projected [12] - Computing market expected to show mild growth for the full year, despite geopolitical uncertainties [15] - Automotive market expected to see mid-teens growth in Advanced Packaging programs, with a gradual recovery anticipated [16] - Consumer market expected to see mild growth driven by the wearable program and improvements in traditional applications [18] Company Strategy and Development Direction - Company focused on strengthening technology leadership in Advanced Packaging and expanding global footprint [10] - Secured $407 million in CHIPS funding to support the planned Arizona facility [10] - Expanded partnerships with TSMC and Infineon to support growth in Advanced Packaging and power modules [10] Management's Comments on Operating Environment and Future Outlook - Management noted prolonged weakness in Automotive and Industrial markets, impacting overall performance [8] - Confidence expressed in recovering SiP socket in next-generation iOS phones, with expectations for above-seasonal growth in the second half of 2025 [12][19] - Management highlighted the importance of maintaining strict financial discipline amid a dynamic macro environment [26] Other Important Information - CapEx for 2024 was $744 million, with a forecast of $850 million for 2025 [27][29] - Effective tax rate expected to increase to around 20% in 2025 due to new global tax regulations [29] Q&A Session Summary Question: Impact of lower content in iPhone on Communications business - Management confirmed significant impact from the socket gap in Q4, with expectations to regain content in the next generation [34][39] Question: Gross margin trajectory into Q2 and beyond - Management indicated a traditional incremental flow through model, with expectations for gradual improvement as the year progresses [40][42] Question: Confidence in Automotive market growth for 2025 - Management expressed optimism based on a strong project pipeline in Advanced Packaging for Automotive, despite recent declines [45][49] Question: Dynamics with marquee customer and backfilling strategies - Management discussed ongoing ramp with a second customer in 2.5% technology and expansion into RDL-based technologies [53][56] Question: CapEx allocation and priorities - Management outlined that 70% of CapEx is for capacity and capability, focusing on high-performance computing and Advanced SiP [80][84] Question: Tariff impacts on shipments and geographic shifts - Management noted that current tariff impacts are vague, with no significant short-term effects expected [90][92] Question: Full year outlook and seasonal growth expectations - Management indicated that a strong second half is necessary for achieving flat to low single-digit growth for the full year [95][98] Question: Confidence in regaining high-end smartphone socket - Management expressed high confidence in regaining the socket based on established relationships and clear production milestones [100][103] Question: Changes in tester utilization rates - Management highlighted test as an area of opportunity, with plans to expand testing capabilities beyond Taiwan [135]

Core Viewpoint - Amkor Technology reported quarterly earnings of $0.43 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, but down from $0.48 per share a year ago, indicating a 16.22% earnings surprise [1][2] Financial Performance - The company posted revenues of $1.63 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.30% and down from $1.75 billion year-over-year [2] - Over the last four quarters, Amkor Technology has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - Amkor Technology shares have declined approximately 5.3% since the beginning of the year, contrasting with the S&P 500's gain of 2.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $1.52 billion, and for the current fiscal year, it is $1.77 on revenues of $6.79 billion [7] - The trend of estimate revisions for Amkor Technology is mixed, which could change following the recent earnings report [6] Industry Context - The Electronics - Semiconductors industry, to which Amkor belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Amkor Technology, Inc. February 10, 2025 © 2025 Amkor Technology, Inc. 1 Presenter Introductions Giel Rutten President and Chief Executive Officer Megan Faust Executive Vice President and Chief Financial Officer © 2025 Amkor Technology, Inc. 2 Jennifer Jue Vice President, Investor Relations Disclaimer Non-GAAP Measures This presentation contains certain measures that are not defined terms under U.S. generally accepted accounting principles ("GAAP"). These non-GAAP measures should not be considered in isolat ...

Financial Performance - Fourth quarter net sales were $1.63 billion, a decrease of 6.6% from $1.75 billion in Q4 2023[4] - Full year net sales totaled $6.32 billion, down 2.6% from $6.50 billion in 2023[4] - Gross margin for Q4 2024 was 15.1%, compared to 15.9% in Q4 2023[4] - Operating income for Q4 2024 was $134 million, down from $159 million in Q4 2023, resulting in an operating income margin of 8.3%[4] - Net income attributable to Amkor for Q4 2024 was $106 million, or $0.43 per diluted share, compared to $118 million, or $0.48 per diluted share in Q4 2023[4] - EBITDA for Q4 2024 was $302 million, down from $326 million in Q4 2023[4] - Net income attributable to Amkor for the year ended December 31, 2024, was $354,012, slightly down from $359,813 in 2023, with diluted earnings per share at $1.43[20] Revenue and Guidance - The company provided guidance for Q1 2025, expecting net sales between $1.225 billion and $1.325 billion[9] - Full year 2025 capital expenditures are projected to be approximately $850 million[9] - Net sales for the three months ended December 31, 2024, were $1,629,118, a decrease of 7% from $1,751,811 in the same period of 2023[20] Assets and Liabilities - Total assets increased to $6,944,328 as of December 31, 2024, compared to $6,771,125 in 2023, indicating growth in the company's asset base[22] - Cash and cash equivalents rose to $1,133,553 as of December 31, 2024, from $1,119,818 in 2023, reflecting improved liquidity[22] - Total liabilities decreased slightly to $2,761,163 as of December 31, 2024, from $2,776,090 in 2023, indicating effective debt management[22] Expenses and Cost Management - Gross profit for the year ended December 31, 2024, was $933,212, down from $943,153 in 2023, reflecting a gross margin of approximately 14.8%[20] - Research and development expenses increased to $162,951 for the year ended December 31, 2024, compared to $177,473 in 2023, indicating a focus on innovation despite overall cost management[20] - The company extended the estimated useful lives of test equipment, resulting in a reduction of depreciation expense by approximately $59 million for the year ended December 31, 2024[20] Market Conditions - The company achieved record revenue in the computing end market, driven by growth in ARM-based PCs and AI devices[3] - The company anticipates continued challenges in the semiconductor industry, including dependence on key customers and potential economic downturns, which may impact future performance[25]

Group 1 - Amkor Technology (AMKR) closed at $25.46, showing a +0.71% change, outperforming the S&P 500, which lost 0.21% [1] - Over the last month, Amkor's shares decreased by 1.06%, better than the Computer and Technology sector's loss of 2.15% and the S&P 500's loss of 1.56% [1] Group 2 - Amkor Technology is projected to report earnings of $0.37 per share, reflecting a year-over-year decline of 22.92%, with quarterly revenue expected at $1.65 billion, down 5.78% from the previous year [2] - Recent changes to analyst estimates indicate a shifting business landscape, with positive revisions suggesting analyst optimism about Amkor's business and profitability [3] Group 3 - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), shows Amkor Technology currently holds a Zacks Rank of 3 (Hold) [5] - Amkor's Forward P/E ratio is 14.32, which is a discount compared to the industry average Forward P/E of 25.75 [6] Group 4 - The Electronics - Semiconductors industry, which includes Amkor Technology, has a Zacks Industry Rank of 140, placing it in the bottom 45% of over 250 industries [6][7]

Company Performance - Amkor Technology's stock closed at $25.58, reflecting a -1.69% change from the previous trading day, which was less than the S&P 500's daily loss of 1.54% [1] - Over the last month, Amkor's shares decreased by 1.36%, underperforming the Computer and Technology sector's gain of 0.11% and exceeding the S&P 500's loss of 2.2% [2] - The upcoming earnings disclosure is anticipated to show an EPS of $0.37, representing a 22.92% decline compared to the same quarter last year, with a consensus revenue estimate of $1.65 billion, down 5.78% from the previous year [3] Analyst Estimates - Recent changes to analyst estimates for Amkor Technology are important as they reflect short-term business trends, with positive revisions indicating analyst optimism about the company's profitability [4] - The Zacks Rank system, which evaluates these estimate changes, currently ranks Amkor Technology at 3 (Hold), indicating a neutral outlook [6] Valuation Metrics - Amkor Technology is trading at a Forward P/E ratio of 14.74, which is a discount compared to its industry's Forward P/E of 26.8 [7] - The Electronics - Semiconductors industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 137, placing it in the bottom 46% of over 250 industries [7][8]

Group 1 - Amkor Technology's stock closed at $25.13, reflecting a -1.64% change from the previous day, underperforming the S&P 500's loss of 0.09% [1] - Over the past month, Amkor's shares gained 0.75%, which is lower than the Computer and Technology sector's gain of 3.04% and better than the S&P 500's loss of 0.29% [1] Group 2 - The upcoming earnings per share (EPS) for Amkor is projected at $0.37, indicating a 22.92% decline compared to the same quarter last year, with revenue expected to be $1.65 billion, down 5.78% year-over-year [2] - For the full year, analysts expect earnings of $1.38 per share and revenue of $6.38 billion, representing changes of -5.48% and -1.85% from the previous year, respectively [3] Group 3 - Recent revisions to analyst forecasts for Amkor Technology are important as they reflect changing business trends, with positive revisions indicating a favorable business outlook [4] - The Zacks Rank system, which assesses estimate changes, currently ranks Amkor Technology as 5 (Strong Sell), with a stagnant EPS projection over the past 30 days [6] Group 4 - Amkor Technology has a Forward P/E ratio of 18.51, which is a discount compared to the industry average Forward P/E of 36.98 [7] - The Electronics - Semiconductors industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 127, placing it in the top 50% of over 250 industries [7][8]