Amkor Technology Inc Q3 2025 Earnings Call Summary

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

Question: Randy Abrams - UBS AG - Analyst : Yes. I wanted to also congratulate you, Giel, just on the next chapter. It has been good working with you. I wanted to ask the first question on the compute opportunities, where you mentioned the start of shipping the high-density fan-out. If you could go how you see the pipeline for AI and networking and also for the first tranche of CoWoS-S capacity, if you see opportunity to utilize that with some of the new products coming out.

Question: Randy Abrams - UBS AG - Analyst : Okay. Good. And then my follow-up question on the system and package pipeline. This year, you gained back a key socket. It looks like two different things going on that improving, but the consumer pulled back. If you could talk broadly about SiP, how you see the pipeline into next year, continuing on the communication gain and then maybe what's happening on the consumer side.

Question: Steven Fox - Fox Advisors LLC - Analyst : I had a couple of questions as well. First, Megan, can you just round out some of the margin to, you mentioned in the prepared remarks also that manufacturing costs were weighing year over year. So I was curious how much that is and where you are relative to sort of peak pressures on that? And the same thing for the material content mix. How do we think about that sort of ongoing pressures into next year? If there's any way to give clues on that. And I need a follow-up.

Question: Steven Fox - Fox Advisors LLC - Analyst : Great. That's helpful. And then just bigger picture on the $7 billion investment for Arizona now. I guess if you can comment a little bit further than what has been described so far and like public comments about why the increase in investment, what does it signal about Amkor's opportunities longer term? And then I was curious, does it create any near-term opportunities like stamp of approval for winning near-term business in other parts of the world?

Question: Joseph Moore - Morgan Stanley - Analyst : I wonder if you could just address the overall cyclical environment for the OSAT business. Are you seeing customers starting to get concerned about potential tightness and any impact that you could see -- haven't seen on like-for-like pricing and may see in the

Question: Joseph Moore - Morgan Stanley - Analyst : Okay. Great. And then in terms of the strength that you've seen in the smartphone business, any indication that any of that could be pull forward, tariff related, anything like that, I mean it seems like there's a pretty solid demand, but I just wanted you to address that because we get the question a lot.

Question: Peter Peng - JPMorgan Chase & Co - Analyst : I want to echo my peers' comments as well and best of luck in your next chapter. Just on your CoWoS-L, there's increasingly more and more of your hyperscale customers and merchant transitioning to CoWoS-L in their technology road maps. I know you guys have something equivalent to your S-Connect. Maybe you can share some update on the progress there with your S-Connect and how do you believe you're positioned in this area?

Question: Peter Peng - JPMorgan Chase & Co - Analyst : Got it. Okay. And then maybe just -- you talked about some new ramps in your -- the CoWoS-R equivalent, high density fan out. How is that going to impact seasonality as we think about the first half of next year? Is that anything significant that would alter seasonal? Or do you think those are like less beneficial until later on. Maybe just talk about seasonality and how you think about those products ramping?

Question: Thomas Diffely, CFA - DA Davidson & Co - Analyst : Congratulations, Giel, on your next chapter. So maybe just one more question on the new facility in Arizona. When you think about the $7 billion -- the increase to $7 billion, how much of that is because of the extra capacity you're adding versus the increase in costs that we've seen kind of across the board these days in construction?

Question: Thomas Diffely, CFA - DA Davidson & Co - Analyst : Okay. Great. That's very encouraging. And then as a follow-up, when you think about the CapEx of $950 million for next year, how much of that is specifically for Arizona?

Question: Thomas Diffely, CFA - DA Davidson & Co - Analyst : Okay. But the increase in '25 was all driven by Arizona, the incremental?

Question: Steve Barger - KeyBanc Capital Markets Inc - Analyst : Thanks. I had another compute question. Giel, I think RDL formats are replacing silicon interposer to some degree, which should be good for OSAT. How much of your CapEx has been to support RDL? And does that shift drive higher value add that translates to unit margins? Or would the primary benefit the volume?

Question: Steve Barger - KeyBanc Capital Markets Inc - Analyst : And I know it's being driven by compute right now, but what are the gating factors to the higher volume applications like PC or mobile? Are there technology challenges for those applications? Or is it just really a function of customers making the decision to go that direction?

Question: Denis Pyatchanin - Needham & Company LLC - Analyst : Great. Well, we'd like to mirror everyone's congratulations as well. And for a quick question about computing. So computing looks like it was over 20% year over year. Can you discuss the key drivers of this growth?

Question: Denis Pyatchanin - Needham & Company LLC - Analyst : Great. And then for my follow-up for communications, I think you mentioned strength in Android persisting into next quarter. Can you provide some more color on that, maybe perhaps by geography?