Amkor Technology (AMKR) — Earnings Preview Memo
Key Factors to Watch for Next Earnings
| Factor | Details & What to Watch |
|---|---|
| Revenue Growth | Consensus Q2 2026: $1,803M (+7% QoQ, +22% YoY). Guidance: $1,750M–$1,850M. Look for upside vs. high end. |
| Gross Margin | Consensus: 15.6%. Guidance: 14.5%–15.5%. Watch for progress toward mid/high teens as advanced mix grows. |
| Net Income / EPS | Consensus: $118M, $0.47/share. Guidance: $105M–$130M, $0.42–$0.52/share. |
| Advanced Packaging/AI Compute | Management expects tripling of advanced packaging revenue in 2026; compute segment guided +20% YoY. |
| Utilization | Q1 2026 utilization in low 70s (vs. 50s last year); further improvement expected in Q2. |
| CapEx | Guidance: $2.5B–$3.0B for FY26. 30% in H1, 70% in H2. Watch for updates on Arizona build and spend pace. |
| Margin Expansion Initiatives | Progress on Vietnam breakeven, Japan cost optimization, pricing actions, and mix shift to advanced. |
| Arizona Facility Ramp | Any updates on customer commitments, timeline, and impact on OpEx/margin dilution for 2027–2028. |
| End Market Trends | Comms (smartphones): High single to low double-digit growth expected. Auto: Advanced content strong. |
| Supply Chain Constraints | Watch for commentary on memory, substrate, and silicon supply impacts on revenue/margins. |
Summary and Conclusions
- Amkor enters Q2 2026 with strong momentum: Q1 2026 delivered record revenue ($1,685M, +27% YoY), gross margin above guidance (14.2%), and EPS of $0.33.
- Guidance for Q2 2026 is robust: Revenue $1,750M–$1,850M (+7% QoQ at midpoint), gross margin 14.5%–15.5%, net income $105M–$130M, EPS $0.42–$0.52.
- Consensus is aligned with guidance: Street expects $1,803M revenue, $0.47 EPS, 15.6% gross margin.
- Key drivers: Acceleration in advanced packaging (especially AI/data center compute), improved utilization, and margin expansion from operational initiatives.
- CapEx is elevated: $2.5B–$3.0B for FY26, with heavy investment in Arizona and Korea for advanced packaging/test.
- Year-over-year comparables are favorable: Q2 2025 was a trough quarter (revenue $1,322M, gross margin 11.9%, EPS $0.09), so YoY growth will be strong.
- Risks: Supply chain constraints (memory, substrates, silicon), timing of Arizona ramp, and potential margin dilution from new capacity.
Quarterly Financial Snapshot — Actuals and Consensus
Quarterly Results and Consensus (Q1 2025–Q2 2026E)
| Quarter | Revenue ($M) | YoY Growth | Gross Margin (%) | Net Income ($M) | EPS ($) | CapEx ($M) | Notes |
|---|---|---|---|---|---|---|---|
| Q2 2026E | 1,803 | +22% | 15.6 | 118 | 0.47 | Consensus (midpoint of guidance range) | |
| Q1 2026A | 1,685 | +27% | 14.2 | 83 | 0.33 | 225 | Record Q1 revenue |
| Q4 2025A | 1,888 | +16% | 16.7 | 172 | 0.69 | 905 | Includes $30M asset sale benefit |
| Q3 2025A | 1,987 | +7% | 14.3 | 127 | 0.51 | ||
| Q2 2025A | 1,511 | +14% | 12.0 | 54 | 0.22 | ||
| Q1 2025A | 1,322 | 11.9 | 21 | 0.09 |
*Consensus figures are not actuals; reported revenue is used for actuals.
Full-Year Financial Snapshot
| Fiscal Year | Revenue ($M) | YoY Growth | Gross Margin (%) | Net Income ($M) | EPS ($) | CapEx ($M) | Notes |
|---|---|---|---|---|---|---|---|
| 2026E | 7,617 | +14% | 16.2 | 520 | 2.09 | 2,500–3,000 | Consensus, company guidance |
| 2025A | 6,708 | +6% | 14.0 | 374 | 1.50 | 905 | Actuals |
| 2024A | 6,318 | 14.8 | 354 | 1.43 | 744 | Actuals |
Guidance Summary — Q2 2026 and FY26
Q2 2026 Guidance
| Metric | Guidance Range | Context/Notes |
|---|---|---|
| Net Sales ($M) | 1,750 – 1,850 | +7% QoQ at midpoint |
| Gross Margin (%) | 14.5 – 15.5 | Mid/high teens targeted for H2 |
| Net Income ($M) | 105 – 130 | |
| EPS ($) | 0.42 – 0.52 | |
| CapEx ($M) | 2,500 – 3,000 (FY26) | 30% H1, 70% H2; Arizona, Korea, Taiwan focus |
FY26 Guidance/Targets (from Investor Day)
| Metric | Target/Range | Context/Notes |
|---|---|---|
| Revenue ($B) | $9.0 ± $0.5 (2028) | $11B+ by 2030 |
| Gross Margin (%) | 17.5 ± 1.0 (2028) | >22% by 2030 |
| EPS ($) | $2.50 ± $0.25 (2028) | >$5 by 2030 |
| CapEx ($B) | 2.5 – 3.0 (2026) | Elevated through 2027 for Arizona build |
Last Year’s Q2 Performance — Tough Comparable?
- Q2 2025 actuals: Revenue $1,511M (+14% QoQ), gross margin 12.0%, net income $54M, EPS $0.22.
- Q2 2025 context: This was a recovery quarter after a soft Q1 2025 ($1,322M revenue, 11.9% GM, $0.09 EPS). Q2 2025 included a $32M non-routine benefit to operating income/EBITDA.
- Q2 2026 setup: The YoY comp is favorable — Q2 2025 was a trough, so Q2 2026 will show strong YoY growth (+22% consensus).
Management Commentary and Intra-Quarter Color
On Demand and Segment Trends
- Communications: Q1 2026 up 42% YoY; Q2 expected to be "stronger than seasonal," mid- to high-single digit sequential growth, driven by iOS. Full-year comms now expected to be high single-digit to low double-digit growth (upgraded from low single digits).
- Computing: Q1 2026 up 19% YoY; full-year compute guided +20% YoY, with advanced packaging (AI/data center) expected to triple. PC side muted, but data center ramps are the key driver.
- Automotive/Industrial: Q1 2026 up 28% YoY; advanced content (ADAS, infotainment) strong, mainstream auto recovering. Q2 expected mid-single digit sequential growth.
- Consumer: Q1 2026 up 4% YoY; Q2 expected low teens sequential growth, driven by wearables.
On Margins and Utilization
- Gross margin: Q1 2026 at 14.2% (above guide); Q2 guided 14.5–15.5%. Management expects mid- to high-teens gross margins in H2 2026 as utilization and advanced mix improve.
- Utilization: Q1 2026 in low 70s (vs. 50s in Q1 2025); advanced lines near full, mainstream improving but still with headroom.
- Margin levers: Pricing actions (especially in Japan), operational excellence, Vietnam breakeven, mix shift to advanced packaging.
On CapEx and Arizona Facility
- CapEx: $2.5B–$3.0B for FY26, with 65–70% for facilities (Arizona, Korea, Taiwan), 30–35% for HDFO/test/advanced packaging. CapEx is back-end loaded (30% H1, 70% H2).
- Arizona: Phase 1 construction underway, completion in 2027, production in 2028. Ramp costs will dilute operating margin by 1–2% in 2027–2028, but facility expected to deliver >30% gross margin at scale (~$1B revenue run-rate per phase).
On Supply Chain and Risks
- Supply constraints: Memory, advanced silicon, and substrate supply remain tight; management is prioritizing production where materials are available.
- Pricing: Constructive environment; customers showing willingness to accept price increases to offset cost inflation.
- Macro/geopolitics: Monitoring Middle East events, oil/material cost inflation, and export controls, but no major disruptions yet.
What Changed / Incremental Since Last Report
- Raised full-year comms outlook to high single/low double-digit growth.
- Advanced packaging ramp accelerating: Tripling of advanced compute packaging revenue in 2026 remains on track.
- Vietnam at breakeven: Margin drag from Vietnam now behind; further improvement expected.
- Arizona CapEx and ramp clarified: 1–2% margin dilution in 2027–2028, breakeven by 2029, $1B revenue run-rate per phase, >30% gross margin at scale.
- CapEx phasing: 70% of FY26 CapEx to be spent in H2.
- Visibility: Management expresses high confidence in achieving 2028/2030 targets, with additional upside possible from pipeline not yet modeled.
Summary Table — Key Metrics and Guidance
| Metric | Q2 2026E (Consensus) | Q2 2026 Guidance | Q2 2025 Actual | YoY Change (Guidance Midpoint) |
|---|---|---|---|---|
| Revenue ($M) | 1,803 | 1,750–1,850 | 1,511 | +22% |
| Gross Margin (%) | 15.6 | 14.5–15.5 | 12.0 | +300 bps |
| Net Income ($M) | 118 | 105–130 | 54 | +110% |
| EPS ($) | 0.47 | 0.42–0.52 | 0.22 | +114% |
| CapEx ($M, FY26) | 2,500–3,000 | 2,500–3,000 |
Conclusion
Amkor is set up for a strong Q2 2026 print, with favorable YoY comps, robust demand in advanced packaging/AI compute, and improving margins/utilization. The key watch items are execution on advanced packaging ramps, margin expansion, and updates on Arizona facility progress and CapEx. Risks remain around supply chain constraints and timing of new capacity, but management confidence and customer commitments are high.
