Company Performance - Amkor Technology (AMKR) closed at $15.96, reflecting a +0.44% change from the previous day, which underperformed compared to the S&P 500's gain of 2.51% [1] - Over the past month, Amkor's shares have decreased by 20.07%, which is worse than the Computer and Technology sector's decline of 12.18% and the S&P 500's loss of 8.86% [1] Upcoming Financial Results - Amkor Technology is set to announce its earnings on April 28, 2025, with projected EPS of $0.09, indicating a 62.5% decrease from the same quarter last year [2] - The consensus estimate for quarterly revenue is $1.28 billion, down 6.61% from the previous year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates predict earnings of $1.43 per share and revenue of $6.22 billion, representing no change in earnings and a -1.49% decline in revenue compared to the prior year [3] Analyst Estimates and Market Sentiment - Recent modifications to analyst estimates for Amkor Technology reflect changing short-term business dynamics, with positive revisions indicating a favorable outlook on the company's health and profitability [4] - The Zacks Rank system, which incorporates estimate changes, currently ranks Amkor Technology at 4 (Sell), following a 2.69% decrease in the consensus EPS estimate over the last 30 days [6] Valuation Metrics - Amkor Technology is trading at a Forward P/E ratio of 11.13, which is lower than the industry average Forward P/E of 19.08 [7] - The Electronics - Semiconductors industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 36, placing it in the top 15% of over 250 industries [7]

Core Viewpoint - Keybanc analyst Steve Barger downgraded Amkor Technology from Overweight to Sector Weight due to reduced visibility into demand for mobile phones, automobiles, and consumer products, influenced by fluctuating trade policy [1] Demand and Market Conditions - Analyst expressed concerns about Amkor's lower-visibility, high-capex business model, which may face gross margin pressure in the first half of 2025 due to a temporary socket loss in the mobile end market [2] - Shares are expected to remain under pressure until stabilization and growth are observed in major end markets like Automotive and Mobile [3] Financial Estimates - Barger lowered his 2025 earnings estimate for Amkor to $1.40 from $1.48, reflecting a -2% growth rate at a 6% decremental margin, and the 2026 estimate to $1.91 from $2.04, indicating 9% growth on a 34% incremental margin [6] Strategic Focus - In a broader upcycle scenario, Amkor could exhibit substantial operating leverage with higher factory utilization, contingent on recovery and growth in high-volume end markets [4] - Amkor is focusing on high-performance computing as a margin-accretive and higher-growth vector, despite volumes being too small to drive consolidated company outperformance without participation from traditional end markets [5] Market Position and Competitiveness - Amkor may remain a "second choice" for leading-edge chip companies compared to Taiwan Semiconductor Manufacturing Co [5] - The analyst noted a more positive outlook for companies exposed to upgrade cycles or with reduced channel inventory, such as memory [8]

Core Viewpoint - Analyst recommendations play a significant role in influencing stock prices, but their reliability is questionable, particularly for Amkor Technology (AMKR) [1][5]. Brokerage Recommendations - Amkor Technology has an average brokerage recommendation (ABR) of 1.88, indicating a position between Strong Buy and Buy, based on recommendations from eight brokerage firms [2]. - Of the eight recommendations, four are Strong Buy and one is Buy, accounting for 50% and 12.5% of total recommendations respectively [2]. Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations for investment decisions may not be advisable, as studies show they often fail to guide investors effectively towards stocks with high price appreciation potential [5]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings due to vested interests, with five "Strong Buy" recommendations for every "Strong Sell" [6][10]. Zacks Rank as an Alternative - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, making it a more reliable indicator of near-term stock performance [8][11]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in earnings estimates and business trends [12]. Current Earnings Estimates for Amkor Technology - The Zacks Consensus Estimate for Amkor Technology's earnings for the current year remains unchanged at $1.47, suggesting stable analyst views on the company's earnings prospects [13]. - Due to the unchanged consensus estimate and other factors, Amkor Technology holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the Buy-equivalent ABR [14].

Core Viewpoint - Vietnam is set to build its first semiconductor wafer fabrication plant with a budget of 12.8 trillion VND (approximately 500 million USD), aiming to enhance its semiconductor ecosystem and attract foreign investment in the industry [1][2]. Investment and Development Plans - The Vietnamese government has approved a significant investment plan for a semiconductor factory, which will include tax incentives allowing companies to retain 20% of taxable income for reinvestment in the local semiconductor ecosystem [1]. - Vietnam is actively negotiating with several U.S. semiconductor companies, including GlobalFoundries and PSMC, to establish a semiconductor manufacturing presence in the country [3][5]. - The government aims to complete the first semiconductor manufacturing plant by around 2030, with plans to support local companies like Viettel in building their own facilities [5][10]. Industry Growth and Export Statistics - By 2021, semiconductors accounted for 19% of Vietnam's technology exports, up from 11% in 2011, with a compound annual growth rate of 37.6% during that period [8]. - In 2023, Vietnam's semiconductor equipment exports reached 7.53 billion USD, with over half going to the U.S., making Vietnam the third-largest chip exporter to the U.S. after Malaysia and Taiwan [8][10]. Strategic Vision for Semiconductor Industry - Vietnam's long-term strategy includes establishing six wafer fabrication plants and achieving an annual revenue of approximately 25 billion USD by 2030, with projections of 50 billion USD by 2040 and 100 billion USD by 2050 [13][14][15]. - The strategy will be implemented in three phases, focusing on attracting foreign investment, enhancing domestic capabilities, and ultimately creating a self-sufficient semiconductor ecosystem [16][20][22]. Challenges and Competitive Landscape - The high cost of building semiconductor fabs, estimated at up to 50 billion USD, poses a significant challenge for Vietnam as it competes with countries like China, the U.S., South Korea, and the EU, which have announced substantial funding for their semiconductor industries [6][12]. - Vietnam's semiconductor industry currently relies heavily on foreign direct investment, primarily in assembly, testing, and packaging, with limited domestic production capabilities [10][12].

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 ...