Financial Data and Key Metrics - Q3 2024 revenue was $1.86 billion, a 27% sequential increase, driven by advanced SiP technology [6] - Q3 EPS was $0.49 [6] - Gross profit for Q3 was $272 million, with a gross margin of 14.6%, constrained by higher material content [26] - Operating income increased over 80% sequentially to $149 million, with an operating margin of 8% [27] - Net income for Q3 was $123 million, resulting in EPS of $0.49 [27] - Q3 EBITDA was $309 million, with an EBITDA margin of 16.6% [27] - The company ended the quarter with $1.5 billion in cash and short-term investments, and total liquidity of $2.2 billion [27] - Total debt stood at $1.1 billion, with a debt-to-EBITDA ratio of 1x [28] Business Line Data and Key Metrics - Advanced packaging revenue increased 6% year-to-date over 2023, driven by AI and high-performance computing [8] - Mainstream business revenue declined 24% year-to-date due to weakness in automotive, industrial, and consumer markets [8] - Communications end-market revenue increased 36% sequentially, driven by premium tier smartphone launches [11] - Automotive and industrial revenue remained stable, with a year-to-date decline of 17% [13][14] - Computing end-market revenue increased 6% sequentially and 23% year-on-year, driven by AI devices [15] - Consumer end-market revenue increased 70% sequentially, driven by a new wearable IoT device [17] Market Data and Key Metrics - Demand for AI devices remains strong, with 2024 revenue for 2.5D expected to quadruple versus 2023 [16] - Traditional server and networking business declined 33% year-to-date, with early signs of recovery in Q4 [16] - Automotive and industrial markets are experiencing prolonged weakness, with recovery timing uncertain [14] - The company expects a more-than-seasonal decline in Q4, with revenue guidance of $1.65 billion, primarily due to dynamics in the communications end market [24] Company Strategy and Industry Competition - The company is focused on three strategic pillars: technology leadership in advanced packaging, global manufacturing footprint, and strategic partnerships [9] - Production has started in Vietnam, and plans for the Arizona facility are progressing well, supported by CHIPS funding [10][22] - Strategic partnerships with industry leaders like TSMC and Infineon strengthen the company's position in secular growth markets [10] - The company is diversifying its customer and technology portfolio, particularly in AI and high-performance computing [52] Management Commentary on Operating Environment and Future Outlook - The company expects a gradual recovery in automotive and industrial markets, with modest growth in Q4 and further growth in 2025 [42] - The communications market is expected to decline single-digits for full-year 2024, while automotive and industrial markets are expected to decline double-digits [24] - The company remains confident in long-term growth prospects, supported by its technology portfolio, global manufacturing footprint, and strategic partnerships [25] Other Important Information - The company is investing $750 million in CapEx for 2024, with two-thirds focused on expanding capacity for 2.5D and advanced SiP technologies [33] - The Vietnam facility started production in Q3, with expected volume ramps in Q4 [20] - The company is qualifying next-generation organic RDL interposer solutions for 2025 [20] Q&A Session Summary Question: Capacity additions and underutilization charges [36] - The company is fully utilizing its 2.5D capacity and plans further expansion in 2025 [37] - Underutilization is primarily in automotive and industrial lines, with gradual recovery expected in 2025 [38] - The Vietnam facility is expected to dilute gross margins by 50 basis points in Q3 and 100 basis points in Q4, tapering off in 2025 [40] Question: Automotive market dynamics [41] - The automotive market is stabilizing, with modest growth expected in Q4 and gradual recovery in 2025 [42] Question: Premium tier smartphone build plan and 2025 outlook [45] - Visibility into 2025 is limited, but the company expects a stronger cycle driven by AI functionality in premium tier phones [45] - The $100 million revenue range in Q4 guidance is primarily due to deviations in the phone build plan [46] Question: Business trends in the first half of 2025 [50] - The company expects headwinds in the iOS ecosystem but gradual recovery in Android, automotive, and industrial markets [50] - Computing and consumer markets are expected to show continued growth [50] Question: AI market and customer diversification [51] - The company is diversifying its customer and technology portfolio, with new customers onboarding for 2.5D technology [52] Question: Gross margin outlook for 2025 [55] - Gross margins are expected to improve in 2025 due to recovery in automotive, industrial, and traditional server markets [56] Question: Key growth drivers for 2025 [57] - The company expects growth in AI edge devices, automotive power modules, and continued strength in computing [58] Question: Vietnam and Arizona facility ramp-up [59] - Vietnam is ramping up SiP and memory production, with additional 2.5D capacity expected by mid-2025 [60] - The Arizona facility will run TSMC technology for joint customers, with additional Amkor advanced packaging technology [63] Question: Test business and CapEx for 2025 [64] - The company is pursuing investments in test business, particularly for AI devices [65] - CapEx for 2025 is expected to remain in the low-teens, with continued investment in 2.5D and panel-level packaging [66] Question: iOS phone ramp and substrate issues [68] - The company experienced a deviation in seasonality for iOS and Android phone builds, with a device changeover impacting Q4 [69] Question: Vietnam facility ramp impact on gross margins [70] - The Vietnam facility is expected to impact gross margins by 100 basis points in Q4, tapering off in 2025 [70] Question: Incremental investment in 2.5D capacity [73] - The company plans significant capacity expansion in 2.5D for 2025, similar to the expansion in 2024 [75] Question: HBM shortage and ramp timing [76] - The company experienced some HBM supply constraints in Q3, but overall 2.5D capacity expansion was fully utilized [76] Question: Automotive and industrial market recovery [79] - The automotive market is stabilizing, with inventory correction extending into Q3, but recovery is expected in 2025 [79]

Core Viewpoint - Amkor Technology reported quarterly earnings of $0.49 per share, slightly missing the Zacks Consensus Estimate of $0.50 per share, and down from $0.54 per share a year ago, indicating a -2% earnings surprise [1][2] Financial Performance - The company posted revenues of $1.86 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.55%, and showing an increase from $1.82 billion year-over-year [2] - Over the last four quarters, Amkor Technology has exceeded consensus EPS estimates three times and topped revenue estimates four times [2] Stock Performance - Amkor Technology shares have declined approximately 10.2% since the beginning of the year, contrasting with the S&P 500's gain of 21.8% [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 $0.54 on revenues of $1.85 billion, while for the current fiscal year, the estimate is $1.55 on revenues of $6.51 billion [7] - The trend of estimate revisions for Amkor Technology is mixed, which may change following the recent earnings report [6] Industry Context - The Electronics - Semiconductors industry, to which Amkor belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Net sales for Q3 2024 reached $1.86 billion, a 27% increase sequentially from Q2 2024[1] - Gross profit was $272 million, with a gross margin of 14.6%[2] - Operating income for the quarter was $149 million, representing an operating income margin of 8.0%[2] - Net income attributable to Amkor was $123 million, with earnings per diluted share of $0.49[2] - The company expects Q4 2024 net sales to be between $1.60 billion and $1.70 billion, with a gross margin of 13.5% to 15.5%[4] - Net income for the nine months ended September 30, 2024, was $249,734 thousand, slightly up from $243,119 thousand for the same period in 2023, indicating a year-over-year increase of about 2.7%[18] Sales and Market Segmentation - Advanced products accounted for $1.57 billion in net sales, representing 84% of total sales in Q3 2024[8] - The top ten customers contributed 74% of total net sales in Q3 2024[8] - Communications end market represented 52% of total sales, an increase from 48% in Q2 2024[8] Cash and Investments - Total cash and short-term investments stood at $1.5 billion, while total debt was $1.1 billion as of September 30, 2024[2] - Cash and cash equivalents decreased to $959,140 thousand from $1,119,818 thousand, representing a decline of approximately 14.4%[16] - The company reported a net cash used in investing activities of $501,752 thousand, compared to $696,897 thousand in the previous year, a decrease of approximately 28.0%[18] - The effect of exchange rate fluctuations resulted in a net decrease of $2,868 thousand on cash, cash equivalents, and restricted cash[18] Assets and Liabilities - Total assets increased to $7,029,086 thousand as of September 30, 2024, compared to $6,771,125 thousand at December 31, 2023, reflecting a growth of approximately 3.8%[16] - Total current liabilities rose to $1,572,831 thousand, up from $1,384,475 thousand, marking an increase of about 13.6%[16] - Long-term debt decreased to $893,994 thousand from $1,071,832 thousand, a reduction of approximately 16.6%[16] - Total stockholders' equity increased to $4,197,254 thousand from $3,995,035 thousand, showing a growth of approximately 5.0%[16] Capital Expenditures - Full year 2024 capital expenditures are projected to be approximately $750 million[4] - Capital expenditures payable increased significantly to $210,398 thousand from $106,368 thousand, indicating an increase of about 97.7%[16] Operating Activities - Net cash provided by operating activities for the nine months was $551,260 thousand, down from $696,187 thousand in the prior year, reflecting a decrease of about 20.8%[18]

Group 1: Brokerage Recommendations - Amkor Technology has an average brokerage recommendation (ABR) of 1.78, indicating a consensus between Strong Buy and Buy, with 55.6% Strong Buy and 11.1% Buy recommendations from nine brokerage firms [1] - Despite the positive ABR, studies suggest that brokerage recommendations often lack success in guiding investors towards stocks with significant price appreciation potential [2][5] - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings due to vested interests, leading to a higher number of favorable ratings compared to negative ones [2][5] Group 2: Zacks Rank vs. ABR - The Zacks Rank is a proprietary stock rating tool that classifies stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of near-term price performance compared to ABR [3][4] - Unlike ABR, which is based solely on brokerage recommendations, Zacks Rank incorporates quantitative models and is updated more frequently to reflect changes in earnings estimates [4][6] - The Zacks Consensus Estimate for Amkor Technology remains unchanged at $1.55, resulting in a Zacks Rank 3 (Hold), suggesting caution despite the Buy-equivalent ABR [7]

Core Viewpoint - Amkor Technology (AMKR) is expected to report third-quarter 2024 results with anticipated revenues between $1.785 billion and $1.885 billion, indicating a sequential growth of 22-29% and a slight year-over-year increase of 0.6% [1] Financial Performance - The Zacks Consensus Estimate for AMKR's revenues is pegged at $1.83 billion, reflecting a rise from the previous year's $1.82 billion [1] - Expected earnings per share for the third quarter are in the range of 42-56 cents, with the consensus estimate at 50 cents, indicating a decline of 7.4% from the year-ago quarter [1] - AMKR has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 45.4% [1] Market Drivers - The third-quarter performance is likely driven by production ramps for new products, including advanced system-in-package (SiP) technology and 2.5D technology, alongside growing demand for Internet of Things wearables [2] - Strength in AI and robust demand in high-performance computing and ARM-based personal computers are expected to boost revenues from the Computing end market [2] - Advanced packaging for premium tier smartphones is anticipated to benefit the Communications end market [2] - Long-term partnerships and an expanding geographic footprint are expected to contribute positively to the top line [2] Challenges - Weak performance in the Automotive and Industrial markets is likely to offset revenue growth from other markets, with ongoing inventory corrections impacting these sectors [3] - In the second quarter, AMKR reported a 2% sequential decline in revenues from the Automotive and Industrial end markets [3] Earnings Expectations - AMKR currently has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating lower odds of an earnings beat [4]

Core Viewpoint - Amkor Technology (AMKR) is anticipated to report a year-over-year decline in earnings despite an increase in revenues, with the earnings report expected on October 28, 2024 [1] Revenue and Earnings Estimates - The consensus estimate for quarterly earnings is $0.50 per share, reflecting a year-over-year decrease of 7.4% [2] - Expected revenues are projected at $1.83 billion, which is a 0.6% increase from the same quarter last year [2] Estimate Revisions - The consensus EPS estimate has been revised 2.88% higher in the last 30 days, indicating a positive reassessment by analysts [3] - A positive Earnings ESP of +0.81% suggests that analysts are optimistic about the company's earnings prospects [7] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [5] - Amkor Technology currently holds a Zacks Rank of 3, which, along with the positive Earnings ESP, suggests a likelihood of beating the consensus EPS estimate [7] Historical Performance - In the last reported quarter, Amkor Technology exceeded the expected earnings of $0.22 per share by delivering $0.27, resulting in a surprise of +22.73% [8] - The company has consistently beaten consensus EPS estimates over the last four quarters [8] Conclusion - Amkor Technology is positioned as a compelling candidate for an earnings beat, although investors should consider other influencing factors before making investment decisions [9]

Company Performance - Amkor Technology (AMKR) closed at $30.48, reflecting a +1.67% change from the previous day, outperforming the S&P 500's daily gain of 0.47% [1] - Over the past month, shares of Amkor Technology have decreased by 2.31%, underperforming the Computer and Technology sector's gain of 3.88% and the S&P 500's gain of 3.48% [1] - The upcoming earnings report is scheduled for October 28, 2024, with expected EPS of $0.50, a decrease of 7.41% year-over-year, and revenue forecasted at $1.83 billion, an increase of 0.62% compared to the prior year [1] Annual Forecast - The Zacks Consensus Estimates predict earnings of $1.55 per share and revenue of $6.51 billion for the entire year, representing changes of +6.16% and +0.15% respectively compared to the previous year [2] - Recent adjustments to analyst estimates indicate the dynamic nature of near-term business trends, with positive revisions reflecting analysts' confidence in the company's performance [2] Valuation and Ranking - Amkor Technology currently holds a Zacks Rank of 3 (Hold), with a Forward P/E ratio of 19.39, which is a discount compared to the industry average Forward P/E of 34.75 [3] - The Electronics - Semiconductors industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 82, placing it in the top 33% of over 250 industries [3] Industry Insights - The Zacks Industry Rank evaluates the strength of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [4]

Company Performance - Amkor Technology (AMKR) closed at $30.08, reflecting a -1.38% change compared to the previous day, underperforming the S&P 500's loss of 0.96% [1] - The stock has increased by 6.98% over the past month, which is below the Computer and Technology sector's gain of 7.35% but above the S&P 500's gain of 4.3% [1] - The upcoming earnings report is anticipated to show an EPS of $0.50, a decrease of 7.41% year-over-year, with revenue expected to be $1.83 billion, an increase of 0.62% from the prior-year quarter [1] Earnings Estimates - Full-year Zacks Consensus Estimates project earnings of $1.55 per share and revenue of $6.51 billion, indicating year-over-year changes of +6.16% and +0.15%, respectively [2] - Recent analyst estimate revisions suggest optimism regarding Amkor Technology's business and profitability, with empirical research indicating a correlation between estimate revisions and stock price performance [2] Valuation and Industry Position - Amkor Technology has a Zacks Rank of 3 (Hold), with a Forward P/E ratio of 19.73, which is lower than the industry average Forward P/E of 33.36, indicating a discount relative to its peers [3] - The Electronics - Semiconductors industry, to which Amkor belongs, holds a Zacks Industry Rank of 89, placing it in the top 36% of over 250 industries [3]

Core Viewpoint - Amkor Technology (AMKR) is well-positioned to continue its earnings-beat streak, having a strong track record of surpassing earnings estimates, particularly in the last two quarters with an average surprise of 81.36% [1] Earnings Performance - For the most recent quarter, Amkor reported earnings of $0.27 per share, exceeding the expected $0.22 per share by 22.73%. In the previous quarter, it reported $0.24 per share against an estimate of $0.10, resulting in a surprise of 140% [1] - The favorable history of earnings surprises has led to positive changes in earnings estimates for Amkor Technology [2] Earnings ESP and Zacks Rank - Amkor Technology has a positive Earnings ESP of +0.81%, indicating that analysts have recently become more optimistic about the company's earnings prospects [3] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with research indicating that such combinations result in positive surprises nearly 70% of the time [2][3] Importance of Earnings ESP - The Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [3] - It is crucial for investors to check a company's Earnings ESP before quarterly releases to enhance the chances of successful investment decisions [4]

Core Viewpoint - Amkor Technology (AMKR) has experienced a significant decline in share price, losing 17.7% over the past three months, underperforming both the Zacks Electronics - Semiconductors industry and the S&P 500 index [1] Group 1: Financial Performance - AMKR reported challenges in supply chain disruptions due to geopolitical tensions and macroeconomic issues such as high inflation and interest rates, which have constrained both top and bottom lines [1] - The company anticipates third-quarter fiscal 2024 revenues to be between $1.785 billion and $1.885 billion, with a consensus estimate of $1.84 billion, while the fiscal 2024 revenue estimate stands at $6.51 billion, reflecting a year-over-year improvement of 0.15% [6] Group 2: Market Challenges - Amkor is facing lower demand for its 2.5D integrated circuits due to inventory corrections in the automotive and industrial markets, alongside rising operating expenses from the construction of a new factory in Vietnam [2] - The company is experiencing a slow recovery in the automotive and industrial sectors, as well as a decline in demand from traditional data center clients, leading to underutilization of its factories [1] Group 3: Competitive Landscape - Amkor is a key player in the OSAT market, partnering with major tech companies like Apple, Qualcomm, and Intel, but faces stiff competition from Taiwan Semiconductor Manufacturing Company (TSM) and ASE Technology Holding (ASX) [4][5] - TSM focuses on chip manufacturing with a strong advanced packaging division, while ASX specializes in IC packaging, testing, and assembly services [5]