Financial Performance - Amkor's net sales for Q2 2024 were $1,461.5 million, consistent with Q2 2023, driven by growth in the communications market, while automotive and industrial sales declined [108][112]. - Gross margin increased to 14.5% in Q2 2024 from 12.8% in Q2 2023, primarily due to an extension of the estimated useful life of test equipment and favorable foreign currency exchange rates [108][116]. - Operating income margin rose to 5.6% in Q2 2024, up from 5.2% in Q2 2023, attributed to improved gross margin and recovery of bad debt expense [109]. - The automotive and industrial markets saw a decline of 19% and 12%, respectively, in the first half of 2024 compared to 2023, due to elevated customer inventories and weaker demand [114]. - Communications, the largest end market, grew by 7% in the first half of 2024, primarily driven by strength in premium tier smartphones [114]. Expenses and Investments - Selling, general and administrative expenses increased to $91.3 million in Q2 2024 from $64.9 million in Q2 2023, largely due to startup costs at the Vietnam Facility and higher employee compensation [117]. - Research and development expenses decreased by 13.4% in Q2 2024 compared to Q2 2023, reflecting a shift in asset utilization and projects moving into production [118][119]. - Capital expenditures for the first half of 2024 totaled $262.5 million, a decrease from $282.3 million in the same period of 2023, focusing on advanced packaging and test equipment [109]. - Capital expenditures for the six months ended June 30, 2024, amounted to $262.5 million, with expectations for 2024 capital expenditures to be approximately $750 million [139][140]. Cash Flow and Liquidity - Net cash provided by operating activities was $387.1 million for the first half of 2024, down from $422.6 million in the same period of 2023, mainly due to changes in working capital [109]. - Cash and cash equivalents, along with short-term investments, totaled $1,545.5 million as of June 30, 2024, with $1,354.0 million held offshore by foreign subsidiaries [128]. - Free cash flow for the six months ended June 30, 2024 was $134,781 thousand, down from $145,964 thousand in the prior year [146]. - The company anticipates continuing to pay quarterly cash dividends, having paid a total of $38.8 million in dividends during the six months ended June 30, 2024 [138]. Debt and Interest - The company had debt of $1,103.7 million as of June 30, 2024, with $154.4 million due within 12 months [132]. - The maximum borrowing capacity under the 2022 Singapore Revolver was $600.0 million as of June 30, 2024, with $615.0 million available for future borrowings under revolving credit facilities [131]. - Interest expense for the three months ended June 30, 2024, increased to $15,805 thousand, a rise of 10.1% from $14,354 thousand in the same period of 2023 [121]. - Interest income for the three months ended June 30, 2024, rose to $(17,698) thousand, reflecting a significant increase of 47.3% compared to $(12,019) thousand in the prior year [121]. - Total other income (expense), net, showed a dramatic decline to $(43) thousand for the three months ended June 30, 2024, down from $2,471 thousand in the same period of 2023, representing a change of over 100% [121]. Foreign Currency and Risk Management - Approximately 90% of net sales for the six months ended June 30, 2024 were denominated in U.S. dollars, with the remaining sales primarily in Japanese yen [152]. - A 10% appreciation of foreign currencies against the U.S. dollar would have resulted in a $12 million decrease in income before taxes for the six months ended June 30, 2024 [151]. - The company has foreign currency forward contracts to mitigate foreign currency risk, resulting in a loss of $11.4 million for the six months ended June 30, 2024 [154]. - The company started hedging certain net investment positions in foreign subsidiaries beginning in April 2024 [154]. Interest Rate and Debt Structure - The average interest rate for fixed-rate debt is 4.4%, while the average interest rate for variable-rate debt is 6.1% [157]. - Total fixed rate debt amounts to $616,273 thousand with an average interest rate of 5.9% [157]. - Total variable rate debt is $138,579 thousand with an average interest rate of 6.1% [157]. - Total debt maturities amount to $1,108,545 thousand, with $57,349 thousand due in 2024 [157]. - The company’s total debt structure reflects a significant reliance on fixed rate debt [157].

Financial Data and Key Metrics Changes - Amkor reported Q2 2024 revenue of $1.46 billion, a 7% sequential increase, with EPS of $0.27 [7][15] - Gross profit was $212 million, with a gross margin of 14.5%, slightly down from Q1 due to higher material content [15] - Operating income was $82 million, resulting in an operating income margin of 5.6% [15] - The company expects Q3 revenue to be approximately $1.835 billion, representing a 26% sequential increase [13][16] Business Line Data and Key Metrics Changes - Revenue in the communications end market increased by 10% sequentially, driven by premium tier smartphone launches [8] - Revenue from the automotive and industrial end market decreased by 2% sequentially, attributed to weak demand and inventory corrections [9] - Computing end market revenue increased by 20% sequentially, driven by AI devices and new ARM-based PC product introductions [10] - Consumer end market revenue decreased by 6% sequentially, impacted by the wind down of legacy IoT devices [11] Market Data and Key Metrics Changes - Revenue within the iOS ecosystem saw a larger than seasonal increase due to premium smartphone launches [8] - Android supply chain revenue declined slightly sequentially but showed a strong 20% year-on-year growth [8] - The automotive market is expected to see a gradual recovery, with Q2 2024 identified as the trough [46] Company Strategy and Development Direction - Amkor is focusing on expanding its advanced packaging capacity, particularly for 2.5D technology and advanced SiP [7][19] - The company is establishing a US manufacturing presence for advanced packaging, with a nonbinding memorandum of terms for up to $400 million in grants under the CHIPS and Science Act [8][18] - The strategic pillars include technology leadership, geographic expansion, and focus on industry mega trends [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth drivers for the semiconductor industry, despite current market challenges [14] - The automotive and industrial markets are expected to recover gradually, with a slight improvement anticipated in Q3 [46] - High bandwidth memory constraints may limit revenue growth in the computing segment, but overall demand remains strong [10][37] Other Important Information - The company ended Q2 with $1.5 billion in cash and short-term investments, and total liquidity of $2.2 billion [16] - CapEx forecast for the year remains at $750 million, focused on increasing advanced packaging capacity [17] Q&A Session All Questions and Answers Question: Impact of new facility on margins - The movement from operating expenses to gross margin due to the Vietnam production facility is expected to be less than $10 million, not significantly impacting Q3 margin guidance [22] Question: Recovery in PC and server markets - The general PC market is gradually recovering, particularly in ARM-based PCs, while conventional servers remain weak [26][28] Question: Update on organic interposer technology - Engagement with 5 to 10 customers for organic interposer technology is ongoing, with pilot production expected to ramp into mass production in early 2025 [31] Question: Expectations for automotive and industrial recovery - Q2 2024 is seen as the trough for automotive, with gradual improvements expected in Q3 and Q4 [46] Question: Constraints on high-bandwidth memory - The high-bandwidth memory constraints are related to supply issues, not yield, and are expected to normalize in the coming months [37] Question: Q3 revenue guidance breakdown - Automotive is expected to see mild growth, computing will be in low to mid-single digits, while communications is anticipated to be strong [57] Question: US facility CapEx and capacity - The US facility is expected to contribute less than 10% of total capacity, with significant investments planned for 2026 and 2027 [59][60] Question: AI ARM-based compute revenue - AI compute revenue is currently in the single digits as a percentage of total revenue but is expected to quadruple in 2024 compared to 2023 [62]

Group 1: Earnings Performance - Amkor Technology reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and showing a slight increase from $0.26 per share a year ago, representing an earnings surprise of 22.73% [1] - The company achieved revenues of $1.46 billion for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.67%, consistent with year-ago revenues of $1.46 billion [1] - Over the last four quarters, Amkor Technology has consistently surpassed consensus EPS estimates four times and revenue estimates three times [1] Group 2: Stock Performance and Outlook - Amkor Technology shares have increased approximately 14.7% since the beginning of the year, slightly outperforming the S&P 500's gain of 14.5% [2] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.67 on revenues of $1.86 billion, and for the current fiscal year, it is $1.76 on revenues of $6.55 billion [4] Group 3: Industry Context - The Electronics - Semiconductors industry, to which Amkor Technology belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [5] - Cirrus Logic, another company in the same industry, is expected to report quarterly earnings of $0.62 per share, reflecting a year-over-year decline of 7.5%, with revenues anticipated to be $317.69 million, up 0.2% from the previous year [5][6]

Financial Performance - Net sales for Q2 2024 were $1.46 billion, a 7% increase sequentially from Q1 2024[1] - Gross profit was $212 million, with a gross margin of 14.5%, compared to 14.8% in Q1 2024 and 12.8% in Q2 2023[2] - Net income attributable to Amkor was $67 million, or $0.27 per diluted share, up from $59 million and $0.24 per share in Q1 2024[2] - EBITDA for Q2 2024 was $247 million, compared to $233 million in Q1 2024[2] - Net income for the six months ended June 30, 2024, was $127,044 thousand, representing an increase of 15.7% compared to $109,668 thousand for the same period in 2023[21] Sales and Market Segmentation - Advanced products accounted for $1.18 billion in net sales, representing 81% of total sales, while mainstream products contributed $281 million[9] - The top ten customers contributed 72% of total net sales, an increase from 70% in Q1 2024[9] - The Communications end market represented 48% of total sales, up from 47% in Q1 2024[9] Financial Guidance and Projections - The company expects Q3 2024 net sales guidance of $1.785 billion to $1.885 billion, with a gross margin forecast of 14.0% to 16.0%[4] - Full year 2024 capital expenditures are projected to be approximately $750 million[4] Cash Flow and Investments - Cash flows from operating activities provided $387,068 thousand for the six months ended June 30, 2024, compared to $422,578 thousand for the same period in 2023, indicating a decrease of 8.4%[21] - The company reported a net cash used in investing activities of $275,059 thousand for the six months ended June 30, 2024, compared to $418,872 thousand for the same period in 2023, a decrease of 34.3%[21] Assets and Liabilities - Cash and short-term investments totaled $1.5 billion, while total debt stood at $1.1 billion as of June 30, 2024[2] - Total current assets decreased from $3,195,810 thousand as of December 31, 2023, to $3,136,841 thousand as of June 30, 2024, a decline of approximately 1.8%[18] - Total liabilities increased slightly from $2,776,090 thousand as of December 31, 2023, to $2,782,216 thousand as of June 30, 2024[18] - Long-term debt decreased from $1,071,832 thousand as of December 31, 2023, to $949,320 thousand as of June 30, 2024, a reduction of approximately 11.4%[18] - Total stockholders' equity increased from $3,962,308 thousand as of December 31, 2023, to $4,049,657 thousand as of June 30, 2024, an increase of approximately 2.2%[18] - Capital expenditures payable rose significantly from $106,368 thousand as of December 31, 2023, to $274,702 thousand as of June 30, 2024, indicating a substantial increase of 158.5%[18] Industry Outlook - The company anticipates continued challenges due to the cyclical nature of the semiconductor industry and potential impacts from global economic conditions[23]

Core Insights - Amkor Technology, Inc. is set to report its second-quarter 2024 results on July 29, with revenue expectations between $1.4 billion and $1.5 billion, slightly lower than the previous year's $1.46 billion [1] - The company anticipates earnings per share (EPS) in the range of 14-30 cents, with a consensus estimate of 22 cents, reflecting a 15.4% decline from the prior year's 26 cents [1] - Amkor has consistently beaten earnings estimates in the past four quarters, with an average surprise of 44.3% [1] Revenue Drivers - The second-quarter performance is expected to benefit from production ramps for new products, particularly in advanced SAP technology and 2.5D technology, driven by demand in the IoT wearables market [2] - AI-enabled product introductions by PC vendors are likely to enhance demand for Amkor's 2.5D advanced packaging technology, positively impacting revenues from the Computing end market [2] Segment Performance - The Communications business segment is projected to see sales growth due to improved demand in the Android supply chain and NAND memory, alongside increased smartphone sales [3] - The introduction of AI in edge devices, such as smartphones, is expected to drive demand for advanced packaging solutions, where Amkor has a strong market position [3] - However, the Automotive and Industrial market is anticipated to negatively impact overall performance due to inventory control measures by customers, with a reported 22% revenue decline in the first quarter [3] Cost Considerations - Amkor's bottom-line performance may be adversely affected by rising operating expenses, projected at approximately $135 million for the second quarter, a 22% increase from $110.5 million in the previous year, primarily due to costs associated with a new factory in Vietnam [4] Earnings Prediction Model - The current model does not predict a definitive earnings beat for Amkor, as it holds a Zacks Rank of 3 and an Earnings ESP of -1.49% [5]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Amkor Technology due to lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Amkor Technology is expected to report quarterly earnings of $0.22 per share, reflecting a year-over-year decrease of 15.4% [2]. - Revenue projections stand at $1.45 billion, which is a slight decline of 0.4% from the previous year [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 3.12% over the last 30 days, indicating a bearish sentiment among analysts [2]. - The Most Accurate Estimate for Amkor Technology is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.49% [5]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive reading typically indicates a likely earnings beat, but Amkor's negative ESP reading complicates predictions of a positive surprise [3][4][6]. - Despite a history of beating consensus estimates, the current combination of a negative Earnings ESP and a Zacks Rank of 3 makes it challenging to predict an earnings beat for Amkor [5][6][7]. Historical Performance - In the last reported quarter, Amkor Technology exceeded expectations by posting earnings of $0.24 per share against an estimate of $0.10, resulting in a surprise of +140% [7]. - The company has successfully beaten consensus EPS estimates in the last four quarters [7]. Conclusion - While Amkor Technology does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [8].

Group 1 - Amkor Technology (AMKR) closed at $41.41, with a +0.46% change, outperforming the S&P 500's loss of 0.78% [1] - The company's shares gained 2.82% over the past month, contrasting with the Computer and Technology sector's loss of 3.17% and the S&P 500's gain of 2.14% [1] - Amkor Technology's upcoming earnings report is scheduled for July 29, 2024, with projected EPS of $0.22, indicating a 15.38% decline year-over-year, and expected revenue of $1.45 billion, down 0.42% from the previous year [1] Group 2 - For the fiscal year, Zacks Consensus Estimates project earnings of $1.76 per share and revenue of $6.55 billion, reflecting increases of +20.55% and +0.7% respectively from the prior year [2] - Recent revisions to analyst forecasts for Amkor Technology are important as they indicate short-term business trends and can influence stock price performance [2] - 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) [3] Group 3 - Amkor Technology's Forward P/E ratio is 23.39, which is lower than the industry's average Forward P/E of 35.42, indicating a valuation discount [3] - The Electronics - Semiconductors industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 89, placing it in the top 36% of over 250 industries [3] - The Zacks Industry Rank measures the strength of industry groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [4]

Group 1 - Amkor Technology (AMKR) stock closed at $42.12, with a daily increase of +0.43%, underperforming the S&P 500's gain of 0.55% [1] - Over the past month, Amkor Technology shares have increased by 19.56%, outperforming the Computer and Technology sector's gain of 5.73% and the S&P 500's gain of 4.28% [1] - The upcoming earnings report on July 29, 2024, is expected to show earnings of $0.22 per share, reflecting a year-over-year decline of 15.38%, with revenue anticipated at $1.45 billion, a 0.42% decrease from the previous year [1] Group 2 - Full-year Zacks Consensus Estimates predict earnings of $1.76 per share and revenue of $6.55 billion for Amkor Technology, indicating year-over-year increases of +20.55% and +0.7%, respectively [2] - Recent adjustments to analyst estimates for Amkor Technology are seen as indicators of the company's business outlook, with positive revisions suggesting optimism [2] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks Amkor Technology at 3 (Hold), with a recent 1.17% decline in the Zacks Consensus EPS estimate [3] Group 3 - Amkor Technology has a Forward P/E ratio of 23.8, which is lower than the industry average Forward P/E of 37.64, indicating it is trading at a discount compared to its peers [3] - The Electronics - Semiconductors industry, to which Amkor Technology belongs, has a Zacks Industry Rank of 166, placing it in the bottom 35% of over 250 industries [3] - The Zacks Industry Rank measures 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]

Core Viewpoint - Amkor Technology (AMKR) has shown significant stock performance, returning +20.2% over the past month, outperforming the Zacks S&P 500 composite's +3.4% change, indicating strong investor interest and potential for future growth [1] Earnings Estimate Revisions - The current quarter's earnings estimate for Amkor Technology is $0.23 per share, reflecting a year-over-year decline of -11.5%, with the Zacks Consensus Estimate remaining unchanged over the last 30 days [2] - For the current fiscal year, the consensus earnings estimate is $1.78, indicating a year-over-year increase of +21.9%, with no changes in the estimate over the past month [3] - The next fiscal year's consensus earnings estimate is $2.47, suggesting a year-over-year increase of +38.8%, also remaining unchanged recently [3] Revenue Growth Potential - The consensus sales estimate for the current quarter is $1.45 billion, showing a slight year-over-year decline of -0.4%. For the current and next fiscal years, sales estimates are $6.56 billion and $7.3 billion, indicating growth of +0.9% and +11.2%, respectively [5] Last Reported Results and Surprise History - In the last reported quarter, Amkor Technology generated revenues of $1.37 billion, a year-over-year decrease of -7.2%, while EPS was $0.24, up from $0.18 a year ago [6] - The reported revenues exceeded the Zacks Consensus Estimate of $1.35 billion by +1%, and the EPS surprise was +140% [6] - The company has consistently beaten consensus EPS estimates in the last four quarters and topped revenue estimates twice during this period [6] Valuation - Amkor Technology is graded B on the Zacks Value Style Score, indicating it is trading at a discount compared to its peers, suggesting potential undervaluation [9] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is fairly valued [7][8] Conclusion - The Zacks Rank 1 for Amkor Technology suggests it may outperform the broader market in the near term, supported by strong earnings estimate revisions and valuation metrics [10]

Company Performance - Amkor Technology (AMKR) closed at $39.09, reflecting a -0.2% change from the previous day, underperforming the S&P 500's 0.16% gain [1] - Over the past month, Amkor's shares have increased by 17.07%, significantly outperforming the Computer and Technology sector's gain of 5.94% and the S&P 500's gain of 3.22% [1] - The upcoming earnings report is anticipated to show an EPS of $0.23, indicating an 11.54% decline from the same quarter last year, with projected revenue of $1.45 billion, down 0.35% year-over-year [1] Full Year Estimates - For the full year, analysts expect earnings of $1.78 per share and revenue of $6.56 billion, representing increases of +21.92% and +0.92% respectively from the previous year [2] - Recent modifications to analyst estimates are crucial as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [2] Zacks Rank and Valuation - Amkor Technology currently holds a Zacks Rank of 1 (Strong Buy), which has historically delivered an average annual return of +25% since 1988 [3] - The company is trading at a Forward P/E ratio of 21.96, which is significantly lower than the industry average Forward P/E of 39.34, indicating a valuation discount [3] - The Electronics - Semiconductors industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 181, placing it in the bottom 29% of over 250 industries [3]