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AMKOR TECHNOLOGY, INC. (AMKR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue of $1.511B, up 14% q/q and 3% y/y, exceeded the high end of guidance; EPS was $0.22 with a non-routine $0.07 boost from a contingent payment; EBITDA was $259M . Consensus was $1.422B revenue and $0.16 EPS—both beaten; EBITDA also beat consensus [GetEstimates: Q2 2025]*.
  • Mix and transition costs constrained margins (gross margin 12.0%): Vietnam ramp (~125 bps headwind), FX (~80 bps), and underutilized mainstream factories; operating income included a $32M non-routine benefit tied to the 2017 NANIUM acquisition .
  • Q3 2025 guidance implies a strong seasonal ramp: revenue $1.875–$1.975B, GM 13.0–14.5%, EPS $0.34–$0.48; CapEx for FY25 maintained at ~$850M .
  • Strategic catalysts: regained iOS socket into fall launch, first high-density fan-out product in high-volume production, broader computing pipeline, and planned Japan footprint rationalization to address underutilization .

What Went Well and What Went Wrong

What Went Well

  • “We delivered second quarter revenue of $1.51 billion, up 14% sequentially and above the high end of guidance, with double-digit growth across all end markets” .
  • First high-density fan-out product reached high-volume production, with additional launches slated; advanced packaging lines in Korea and Taiwan running at high utilization .
  • Computing momentum: record 2024, +18% y/y in 1H25; test revenue in computing up ~50% y/y in 1H25; robust Q3 ramp expected across data center/infrastructure/PC .

What Went Wrong

  • Gross margin constrained to 12.0% by mix (advanced SiP concentration), Vietnam ramp (~125 bps headwind), and FX (~80 bps vs Q1); mainstream underutilization persisted .
  • Japan factories underutilized longer than anticipated, prompting footprint rationalization plans to align capacity with demand; details to follow next call .
  • Automotive mainstream recovery remains gradual; silicon carbide expectations moderated with EV market timing; near-term auto growth guided to low single digits in 2H25 .

Financial Results

Metric (USD)Q4 2024Q1 2025Q2 2025
Revenue ($ Billions)$1.629 $1.322 $1.511
Gross Margin (%)15.1% 11.9% 12.0%
Operating Income ($ Millions)$134 $32 $92
Operating Income Margin (%)8.3% 2.4% 6.1%
Net Income ($ Millions)$106 $21 $54
Diluted EPS ($)$0.43 $0.09 $0.22
EBITDA ($ Millions)$302 $197 $259

Estimate vs Actual (Q2 2025):

MetricConsensusActual
Revenue ($ Billions)$1.422*$1.511
EPS ($)$0.160*$0.22
EBITDA ($ Millions)$218.5*$259

Segment and End-Market Mix:

MetricQ2 2024Q1 2025Q2 2025
Advanced products ($ Millions)$1,180 $1,064 $1,228
Mainstream products ($ Millions)$281 $258 $283
Packaging services (%)88% 88% 88%
Test services (%)12% 12% 12%
Top 10 customers (% of sales)72% 71% 72%
Communications (%)48% 40% 40%
Computing (%)20% 22% 22%
Automotive/Industrial/Other (%)20% 21% 20%
Consumer (%)12% 17% 18%

Notes: Q2 EPS includes $0.07 from a contingent payment; operating income/EBITDA benefited by $32M . CFO cited ~125 bps Vietnam ramp impact and ~80 bps FX headwind vs Q1 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesQ3 2025N/A$1.875B–$1.975B New
Gross Margin (%)Q3 2025N/A13.0%–14.5% New
Net Income ($ Millions)Q3 2025N/A$85–$120 New
EPS ($)Q3 2025N/A$0.34–$0.48 New
OpEx ($ Millions)Q3 2025~$125 (CFO view) ~$125 Maintained
Effective Tax RateFY 2025~20% (CFO view) ~20% Maintained
CapEx ($ Millions)FY 2025~$850 ~$850 Maintained
Debt ActionJuly 2025N/ARepay $223M New
DividendQ2 2025—Paid $0.08269 on June 25 Executed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/HPC packaging (2.5D, RDL, fan-out)Record compute in 2024; continued CapEx for advanced packaging Co-packaged optics engagements; Arizona facility planning; RDL ramps in 2025 First high-density fan-out in high-volume; robust pipeline; test expansion in Korea; capacity tight but margins above corporate avg Strengthening
Communications/iOS socketSeasonal strength expected in H2 Next-gen SiP socket on track; comms stronger than expected in Q1 Socket recovery “going as planned”; strong Q3 comms ramp; 4Q uncertainty Improving
Supply chain, tariffs/export controlsMonitoring trade restrictions; diversified footprint Free trade zones limit impact; export controls temper some compute programs Dynamic; easing restrictions may help 2.5D ramp; proactive substrate procurement Mixed but stabilizing
Vietnam rampFacility ramped in 2024 Vietnam moved to production; ~100 bps margin headwind in Q1 Q2 margin headwind ~125 bps; expected to improve H2’25 Near-term drag, improving
Japan footprint——Underutilization; rationalization plan under review; prior consolidation success Restructuring
AutomotiveWeakness in 2024 ADAS/infotainment robust; mainstream stabilized Q2 grew 11% q/q; inflection with 6% y/y growth; 2H25 low single-digit growth Gradual recovery
Materials/substrates——Potential high-end substrate constraints; strategic procurement team in place Watchlist
Test fleet—K5 Korea expansion phases (2025/2027) Upgrades and new testers; Korea/Taiwan high utilization; mimic capabilities in U.S. Scaling

Management Commentary

  • CEO: “We delivered second quarter revenue of $1.51 billion, up 14% sequentially and above the high end of guidance, with double-digit growth across all end markets” .
  • CEO: “A major milestone in the quarter was the launch of the first high-density fan out product in high volume production for our lead customer” .
  • CFO: “Q2 gross margin was constrained by foreign currency headwinds of approximately 80 basis points… Vietnam will impact our gross margin in Q2… approximately 125 basis points” .
  • CFO: “Operating income… included a non-routine $32 million benefit due to a contingent payment related to our 2017 NANIUM acquisition. Net income… and EPS… included $16 million and $0.07 respectively” .
  • CEO: “We are progressing plans to rationalize our manufacturing footprint… specifically considering our seven factories in Japan” .

Q&A Highlights

  • Margin flow-through: Q3 flow-through constrained by unfavorable mix (advanced SiP concentration) and mainstream underutilization; despite 27% revenue growth, operating income and EPS more than double .
  • Japan rationalization: Multi-year footprint optimization to address underutilization; pricing actions on very low-volume customers considered .
  • 2.5D/fan-out roadmap: Easing export controls could accelerate 2.5D; multiple fan-out products launching through 2H25/early 2026 .
  • Communications: Strong Q3 ramp similar to 2022/2023 seasonality; consumer flat due to prior-year ramp; iOS socket recovery on plan .
  • Substrates/materials: Potential high-end substrate constraints; proactive supplier engagement and strategic procurement set up .
  • CapEx/U.S. manufacturing: ~$850M FY25; Arizona groundbreaking in 2H25; grants/incentives lag implies higher CapEx timing in 2026–2027 .

Estimates Context

  • Q2 2025 beats: Revenue $1.511B vs $1.422B consensus; EPS $0.22 vs $0.160 consensus; EBITDA $259M vs $218.5M consensus [GetEstimates]*.
  • Q3 2025 guide vs consensus: Revenue guide $1.875–$1.975B vs $1.933B consensus midpoint; EPS guide $0.34–$0.48 vs $0.422 consensus; guidance brackets consensus with strong comms seasonality [GetEstimates]*.
  • FY 2025 consensus: EPS $1.252 and revenue $6.653B—trajectory depends on H2 comms volumes, compute ramp pacing, and mainstream utilization [GetEstimates]*.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Strong beat with clear catalysts: regained iOS socket, continued compute momentum, and high-density fan-out commercialization support a strong Q3 setup; watch mix effects on margins .
  • Margin trajectory hinges on footprint optimization and utilization: Vietnam ramp improving in H2; Japan rationalization should lift mid-term profitability; near-term GM constrained by advanced SiP mix .
  • Compute remains the growth engine: diversified pipeline across GPUs, CPUs, networking, memory, photonics; test revenue scaling and high utilization in KR/TW support earnings leverage .
  • Supply chain/tariff dynamics: easing export controls could expand 2.5D opportunities; potential substrate tightness warrants monitoring; Amkor’s proactive procurement mitigates risk .
  • Capital allocation: liquidity strengthened (new $1B revolver, $500M term loan), $223M debt repayment in July; CapEx focused on advanced packaging and U.S. expansion; dividend paid in Q2 .
  • Trading lens: Q3 guide above seasonality and consensus bracketing should be supportive; any confirmation of Japan consolidation details and additional fan-out wins are likely stock-positive; margin mix commentary remains the key watchpoint .
  • Medium-term thesis: OSAT leadership in AI/HPC packaging and turnkey test, expanding U.S. footprint, and strategic customer engagements position Amkor to capture secular growth; execution on footprint optimization is the path to margin normalization .