Amkor Tech (NASDAQ:AMKR) reported first-quarter financial results on Monday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://event.choruscall.com/mediaframe/webcast.html?webcastid=83oloXM1
Summary
Amkor Tech reported record first quarter revenue of $1.68 billion, a 27% increase year-on-year, driven by growth across all end markets, with communications showing the strongest growth.
The company continues to invest in advanced packaging platforms, including hdfo, flip chip, and test, and is expanding its geographic footprint with new facilities in Arizona and Korea.
Amkor Tech expects second-quarter revenue between $1.75 and $1.85 billion, with projected gross margins of 14.5% to 15.5% and a full-year CapEx estimate of $2.5 to $3 billion.
Management highlighted strong demand in the semiconductor industry, while closely monitoring risks such as geopolitical tensions and material supply constraints.
The company is preparing for a multi-year value creation journey, with a focus on advanced packaging and strategic partnerships, and anticipates a significant ramp-up in the compute segment driven by AI and data center applications.
Full Transcript
OPERATOR
Good day ladies and gentlemen and welcome to the Amkor Technology first quarter 2026 earnings call. My name is Diego and I will be your conference facilitator today. At this time all participants are in a listen only mode. After the speaker’s remarks, we will conduct a question and answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Jennifer Ju, Head of Investor Relations. Ms. Ju, please go ahead.
Jennifer Ju (Head of Investor Relations)
Good afternoon and welcome to Amcor’s first quarter 2026 earnings conference call. Joining me today are CEO Kevin Engle and CFO Megan Faust. Our earnings press release was filed with the SEC this afternoon and is available on the Investor Relations page of our website along with the presentation slides that accompany today’s call. During this presentation we will use non GAAP financial measures and you can find the reconciliation to the comparable GAAP financial measures in the slides. We will make forward looking statements today based on our current beliefs, assumptions and expectations. Please refer to our press release for a disclaimer on forward looking statements and our SEC filings for a discussion on the risk factors and uncertainties that may affect our future results. I will now turn the call over to Kevin.
Kevin Engle (Chief Executive Officer)
Thank you Jennifer Good afternoon everyone. Thank you for joining us today. Amkor delivered a strong start to the year, achieving record first quarter revenue of $1.68 billion, up 27%. Year on year we saw growth across all end markets and we’re encouraged by the breadth of demand we’re seeing across our technology platforms. Communications delivered the strongest growth and mainstream posted its fourth consecutive quarter of both sequential and year on year growth. Leading chip companies continue to trust us for their advanced packaging and test needs. We are clearly benefiting from our partnerships and our leading technology as we execute on a growing set of advanced packaging programs. Earnings per diluted share were $0.33, significantly higher than last year, reflecting disciplined execution and continued progress on our margin initiatives. Overall, this was a quarter that reflected momentum and demand, disciplined execution by our teams and continued preparation for the advanced packaging ramps we expect in the second half of the year. As we discussed last quarter, overall semiconductor demand is robust. The industry backdrop remains dynamic. We are closely monitoring export controls and evaluating trade policies. We see supply dynamics around advanced silicon, advanced substrates and memory and are managing these risks with agility alongside our customers and suppliers. Some customer supplied materials are being delayed causing nonlinear loading. This has been expected and we are prioritizing production where materials are available to minimize impact. Uncertainty related to the geopolitical events in the Middle East have increased over the last few months to date, we have not seen any supply disruptions related to these dynamics. However, conditions in the region are putting additional pressure on material pricing. We’re working closely with our customers to offset these increases across the supply chain. Now let me share an update on our strategic initiatives. First, elevating technology leadership. We continue to invest in advanced packaging platforms including HDFO, flip chip and test. These are critical to next generation AI and high performance computing as discussed last quarter. We are engaged on several HDFO programs this year and the newest Data Center CPU program is expected to begin ramping this quarter. Our preparations in Korea remain on track to scale this program into high volume the second half of the year. Overall, we see increasing opportunities for the compute market from a diverse customer base. Second, expanding our geographic footprint in 2026. Our priorities include meeting construction milestones of our Arizona facility and expanding manufacturing space in Korea. In Arizona, we are excited to see the progress as we wrap up foundation work and move towards building steel construction. Construction of phase one is planned to be completed in 2027 in Korea. The new test building is on track for completion at the end of this year. This will provide incremental space to support data center demand going into 2027. Third, enhancing our strategic partnerships in key markets, we continue to strengthen collaboration with customers across the ecosystem including foundries, fabless companies, IDMs and OEMs. As part of our partnership engagement model, our customers are making contributions that help align technology roadmaps, support our capital investment and enable rapid ramps as new capacity comes online. Across all three pillars, we remain focused on margin improvements driven by operational excellence, increased utilization, favorable pricing and a sustained mix shift towards higher value advanced packaging. Our mainstream factories in the Philippines are seeing improving demand and we’re continuing to optimize cost. In Japan, utilization of our advanced sites in Korea and Taiwan is increasing, improving profitability. In just over three weeks, we will host our 2026 Investor Day. This will give us an opportunity to provide deeper view into our strategic pillars. We will explain Amcor’s position as the semiconductor industry turns to advanced packaging for value creation. We are well positioned for this shift and we are at the beginning of a multi year value creation journey. We’re excited about our future. We look forward to sharing more of our story at the event on May 21st. I’ll now turn the call over to Megan to provide more details on our first quarter performance and near term outlook.
Megan Faust (Chief Financial Officer)
Thank you Kevin and good afternoon everyone. Amkor delivered record first quarter revenue of $1.68 billion, increasing 27% year on year revenue was above the midpoint of guidance driven by stronger than expected performance across all end markets except computing where we saw softness in PCs and laptops. The communications end market was the largest contributor to our year on year growth increasing 42%. We saw healthy demand across premium tier smartphones, especially iOS due to our strong footprint in the current generation. Android demand also remained healthy for the second quarter. Communications revenue is expected to be stronger than seasonal increasing mid to high single digits sequentially driven by continued strength in the iOS ecosystem. Revenue in the computing end market increased 19% year on year. Record revenue within AI data center applications was driven by broad based strength across multiple customers. This was partially offset by softness in PCs and laptops. Computing is expected to grow mid single digits sequentially in the second quarter driven by the ramp of the new HDFO data center CPU device that Kevin mentioned. Automotive and industrial revenue increased 28% year on year. ADAS and infotainment demand drove record revenue for advanced technology in this end market. The recovery in the mainstream portion of automotive and industrial continued with Q1 marking the fourth consecutive quarter of sequential growth. Revenue within the automotive and industrial end market is expected to grow mid single digits sequentially in Q2. Consumer revenue increased 4% year on year due to broad based improvement in demand across customers. Revenue in Q2 is expected to grow low teens percent sequentially driven by wearable products. Gross margin of 14.2% exceeded the high end of our Q1 guidance range primarily due to favorable product mix. Gross profit for the quarter was $239 million, up 52% from last year due to increased volume and focused cost management. Operating expenses for $139 million for Q1 operating income was $100 million and operating income margin was 6%, an improvement of 360 basis points year on year. Our effective tax rate for the quarter was 12.8% lower than our full year target of 20% due to discrete tax benefits recognized in the quarter. Net income was $83 million and EPS was $0.33. EBITDA was $285 million and EBITDA margin was 16.9%. As we have grown revenue by delivering high value advanced packaging technology to our customers, we are benefiting from the operating leverage in our model. In addition, our actions to structurally manage costs are showing up in our results demonstrating our ability to drive sustained margin improvement. As of March 31st we held $1.8 billion in cash and short term investments and total liquidity was $2.9 billion. Total debt was $1.4 billion and our debt to EBITDA ratio was 1.1 times. Our strong balance sheet provides the financial flexibility and liquidity for this next investment cycle. Now Turning to our second quarter outlook, building on the strong momentum in the first quarter, Q2 revenue is expected to be between 1.75 and $1.85 billion, representing a 7% sequential increase at the midpoint. Gross margin is projected to be between 14.5 and 15.5%. We expect operating expenses of approximately $120 million, which includes a gain on the sale of real estate of approximately $20 million. Our full year 2026 effective tax rate is expected to be around 20%. Net income is forecasted to be between 105 and $130 million, resulting in EPS between 42 and 52 cents. Our 2026 CapEx estimate remains at 2.5 to $3 billion. As a reminder, 65 to 70% is projected for facilities expansion including phase one of our Arizona campus. About 30 to 35% is projected for HDFO test and other advanced packaging capacity. The remaining spend is projected for R and D and quality programs. We anticipate elevated CAPEX spend for facilities expansion through 2027 as we complete phase one of our Arizona campus. At that point we will begin recognizing depreciation and other startup costs as we build and train the workforce ahead of production in 2028. Similar to our Vietnam ramp up phase, these preparation costs will be recognized in OPEX until programs are qualified for production, at which point they will transition to cost of goods sold. As a result, we anticipate this will start to dilute operating income margin by approximately 1 to 2% beginning in 2027 and improving in 2028. Once at full scale, we expect Arizona will be a significant driver of operating income margin expansion reflecting the benefits of high value advanced packaging at what is planned to be our most automated factory to wrap up we are pleased with our first quarter performance and the momentum we are building in 2026. We remain confident in the full year outlook we provided last quarter with revenue growth driven by acceleration in computing and strong growth in advanced automotive. Our focus and discipline as we execute on our strategic pillars positions us well to continue generating improved financial results and sustained shareholder value. I would like to emphasize Kevin’s remarks regarding our upcoming Investor Day. We are embarking on a multi year value creation journey, investing today to drive materially stronger earnings power in the future. We look forward to sharing more with you at our event on May 21st. This concludes our prepared remarks. We will now open the call up for your questions. Operator.
OPERATOR
Thank you. And at this time we will conduct our question and answer session. In order to get through as many questions in the time allotted, please limit yourselves to one question and one follow up question. To ask your question, press Star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two if …
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