Amkor Falls 18% in 3 Months: How Should Investors Play the Stock?

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]