Amkor Technology Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Charles Shi - Needham & Co. LLC - Analyst : Hi, thanks for taking my question. Maybe I missed a little bit the first part of the preparing marks, but I wonder if you guys can provide some color on why the Q1 you've done, a little bit better than expected. But Q2, I'm especially interested in your thoughts on Q2. Because the amount of sequential growth for Q2, if I look at the midpoint of the guidance range, is one of the stronger Q2 in recent history; and wonder, do you see any potential impact from any pull-ins due to concerns on the tariffs for any of the two quarters, Q1 or Q2? Thank you.

Question: Charles Shi - Needham & Co. LLC - Analyst : Got it, thanks. The second question, you guys are maintaining that $850 million CapEx. Given the recent tariff news, any thoughts on the continued expansion in Vietnam? And any thoughts that you may or may not continue the current investment in that specific country that probably can be hit by the tariffs? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 9:00PM, AMKR.OQ - Q1 2025 Amkor Technology Inc Earnings Call

Question: Ben Reitzes - Melius Research LLC - Analyst : Yes, hi. Good afternoon. Hope you can hear me okay. I wanted to ask about the Communications segment beyond the 2Q. Should this be better than seasonal for the second half, given the win of the new socket? And I was wondering what that would mean for margins. And then also, in the answer to your question, if you thought about tariffs and how that may impact the seasonality in the second half as well in the comms sector. Thanks.

Question: Ben Reitzes - Melius Research LLC - Analyst : Okay, great. If I could just slip in one more, I wanted to just clarify on the auto industrial guidance given that the margin impact that you have in that vertical. What are you thinking there? Can you just reiterate what you said about the 2Q and in the second half? And does that have the same uncertainty with regard to tariffs as the other spaces, or is that space really picking up?

Question: Ben Reitzes - Melius Research LLC - Analyst : Thanks a lot. Appreciate the answers from both of you.

Question: Randy Abrams - UBS Securities Pte. Ltd. - Analyst : Yes, hi. Thank you. I wanted to ask the first question on the Arizona expansion. Two parts to it. I think, first, how you're thinking about your opportunity now with TSMC announcing their two sites in US, if you could talk where you see your opportunity versus their expansion. And the other side, it sounds like even given that you're expanding or potentially considering a faster plan -- so if you could talk the potential to either pull in or raise the scale of Arizona, if indeed you see a bigger opportunity there.

Question: Randy Abrams - UBS Securities Pte. Ltd. - Analyst : Okay. Yes, and a quick follow up, and then I'll ask a second question. The faster than anticipated -- if you could give the timeline how you see the scale up, like in terms of going into volume for that facility. And then the second question on a couple of the advanced technology, curious how you're seeing the potential come in. I think you mentioned the RDL interposer accelerating some of the R&D. So how you see it in terms of design activity or opportunities once you go into production for that? And then the second, you mentioned a bit more on the co-packaged optics, when you see timing and how you see participating versus TSMC, which has some vertical integration there.

Question: Craig Ellis - B. Riley Securities, Inc. - Analyst : Yes, thanks for taking the question. In fact, I'll start with a couple of clarifications. If you could clarify in the Communications segment, you mentioned it was stronger than you expected in the first quarter. Can you just characterize the linearity of that strength? Was it all quarter long, early quarter, late quarter? And then on the RDL-based opportunity you just talked about, can you clarify, is that something that as you work on it this year generates revenue this year, or is that revenue generative next year? And can you comment if that would be first or second half? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 9:00PM, AMKR.OQ - Q1 2025 Amkor Technology Inc Earnings Call

Question: Craig Ellis - B. Riley Securities, Inc. - Analyst : That's very helpful. Thank you. And then the follow up is really a higher-level question for you or Megan, and it goes back to some commentary from last quarter's conference call. I think in characterizing the year, the company was of the view that revenues could be flat to modestly up year on year with strong half-on-half seasonality, potentially in the 40-60 range, half-on-half. Is that still the right way to think about the year, or how should we think about the year's potential and the way linearity could break down?

Question: Peter Peng - JPMorgan Securities LLC - Analyst : Hi, thanks for taking my question. I wanted to double-click on your computing and specifically your 2.5D segment. It sounds like you guys are -- just given some of the expert controls at your marquee customers, you're down-ticking that, but you're also ramping with a networking switch customer this quarter. So given the puts and takes, should we expect that this segment could be flyers for the year, or just given that that marquee customer is quite big that this could be declining this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 9:00PM, AMKR.OQ - Q1 2025 Amkor Technology Inc Earnings Call

Question: Peter Peng - JPMorgan Securities LLC - Analyst : Got it. And maybe just kind of follow up to that question, maybe as we kind of look into 2026, I know you guys were working on the Connect S technology with the CoWoS-L. Any update on there and whether you're able to support that market customer for next year? And then maybe more broadly, if you can talk about your design win pipeline for your 2.5D segment.

Question: Steve Barger - KeyBanc Capital Markets, Inc. - Analyst : Thanks. As you move into the socket recovery ramp, does the content and pricing there mean you'll outgrow the prior program? And do you have visibility into share gains or content gains beyond the socket issue that we should be thinking about? Or is whatever happens in the back half just more about unit volume?

Question: Steve Barger - KeyBanc Capital Markets, Inc. - Analyst : Understood. That's good detail. Thank you. And I know you can't make firm statements about trade issues at this point, but if you do have customers ask to move a program to mitigate tariffs and it goes into an area with higher labor costs; or if you incur costs because you have to move things around, is that all a complete pass-through, or how will that customer conversation go?

Question: Steve Barger - KeyBanc Capital Markets, Inc. - Analyst : Understood, thank you.

Question: Tom Diffely - D. A. Davidson & Co. - Analyst : Yes, good afternoon. Thank you for taking my questions. Giel, curious maybe to follow up on the communication side. Do you expect the AI going to the edge to drive unit growth this year in the handsets? And perhaps if not, is there enough technology changes to allow you to grow in a -- for the depressed market?

Question: Tom Diffely - D. A. Davidson & Co. - Analyst : Okay, that's fair. Megan, I had a question on the margins for the reported quarter. When you compare fiscal first-quarter '25 to fiscal first-quarter '24 on lower revenue, you had about the same COGS. And I'm curious. You obviously talked about overhead absorption being an issue. But to get the same level of COGS, was there a difference in the mix, or was there weaker pricing, or how would you describe what drove that?

Question: Tom Diffely - D. A. Davidson & Co. - Analyst : Correct, yes.

Question: Tom Diffely - D. A. Davidson & Co. - Analyst : Okay, perfect. All right. Well, thank you.