Amkor Technology ((AMKR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Amkor Technology’s recent earnings call revealed a mixed sentiment, highlighting both achievements and challenges. While the company celebrated advancements in packaging and computing markets, it faced obstacles in automotive, industrial, and communications sectors. The outlook for a stronger second half of 2025 suggests cautious optimism amid current headwinds.
Advanced Packaging and SiP Achievements
The earnings call showcased Amkor’s success in advanced packaging, with a 3% year-over-year revenue increase. Advanced System-in-Package (SiP) technology reached a significant milestone, recording $3.1 billion, underscoring the company’s innovation and market leadership in these areas.
Computing End Market Growth
Amkor reported a robust performance in the computing sector, with revenue increasing 13% sequentially and 16% annually, reaching record levels. This growth was driven by the rising demand for ARM-based PCs and the adoption of 2.5D technology for AI GPUs, highlighting a positive trend in this market.
Record Consumer End Market Performance
The consumer end markets also delivered strong results, with a 10% revenue increase for the full year 2024. This success was attributed to the launch of a new wearable program that utilizes advanced SiP technology, further expanding Amkor’s reach in consumer electronics.
CHIPS Funding and Facility Expansion
Amkor secured $407 million in CHIPS funding to support the development of its Arizona facility, while also expanding partnerships with TSMC and Infineon. These strategic initiatives aim to bolster the company’s manufacturing capabilities and strengthen its global presence.
Strong Financial Discipline
The company concluded the year with $1.6 billion in cash and short-term investments, alongside a total liquidity of $2.3 billion. This reflects Amkor’s effective working capital management and operational efficiency, providing a solid financial foundation.
Overall Revenue Decline
Despite achievements, Amkor experienced a 3% revenue decline for the full year 2024, totaling $6.3 billion. This decline indicates the challenges faced in certain market segments that affected overall performance.
Automotive and Industrial Market Weakness
The automotive and industrial sectors faced significant challenges, with an 8% sequential and 16% annual revenue decline in Q4. This marked the seventh consecutive quarter of year-on-year declines, indicating persistent difficulties in these markets.
Communications Revenue Challenges
The communications sector also struggled, experiencing a 25% sequential and 7% annual revenue decline in the fourth quarter. This was primarily due to a socket gap in the latest iOS phones, impacting revenue generation.
Underutilization and Margin Pressure
Profitability is expected to be constrained due to underutilization across factories and the ramp-up costs associated with the new Vietnam facility. These factors are likely to exert pressure on margins in the near term.
Forward-Looking Guidance
Amkor’s guidance for 2025 anticipates a muted first half with a stronger second half, expecting overall revenue to be flat or show low single-digit growth. The company projects Q1 2025 revenue at approximately $1.275 billion, indicating a 7% year-on-year decline, with gross margins between 10% and 13%.
In summary, Amkor Technology’s earnings call reflected a balanced sentiment, with notable achievements in packaging and computing, but challenges in automotive and communications markets. The company’s strategic initiatives and financial discipline provide a foundation for future growth, although headwinds persist. Investors should note the cautious optimism for a stronger second half of 2025 as Amkor navigates current market dynamics.
