Amkor Technology Reports Financial Results for the Second Quarter 2024

Amkor Technology, Inc. (Nasdaq: AMKR), a leading provider of semiconductor packaging and test services, today announced financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights

Net sales $1.46 billion
Gross profit $212 million, operating income $82 million
Net income $67 million, earnings per diluted share $0.27
EBITDA $247 million

“Amkor delivered second quarter results in line with expectations. Revenue of $1.46 billion was up 7% sequentially, driven by Advanced packaging supporting premium tier smartphones and AI solutions utilizing 2.5D technology,” said Giel Rutten, Amkor’s president and chief executive officer. “Strength in the Communications and Computing end markets was partially offset by soft demand and ongoing inventory corrections in the Automotive & Industrial and Consumer end markets.”

Quarterly Financial Results

($ in millions, except per share data)

Q2 2024

Q1 2024

Q2 2023

Net sales

1,461

1,366

1,458

Gross margin

14.5

14.8

12.8

Operating income

Operating income margin

5.6

5.4

5.2

Net income attributable to Amkor

Earnings per diluted share

0.27

0.24

0.26

EBITDA (1)

247

233

245

(1) EBITDA is a non-GAAP measure. The reconciliation to the comparable GAAP measure is included below under “Selected Operating Data.”

At June 30, 2024, total cash and short-term investments was $1.5 billion, and total debt was $1.1 billion.

The company paid a quarterly dividend of $0.07875 per share on June 24, 2024. The declaration and payment of future dividends, as well as any record and payment dates, are subject to the approval of the Board of Directors.

Business Outlook

The following information presents Amkor’s guidance for the third quarter 2024 (unless otherwise noted):

Net sales of $1.785 billion to $1.885 billion
Gross margin of 14.0% to 16.0%
Net income of $105 million to $140 million, or $0.42 to $0.56 per diluted share
Full year 2024 capital expenditures of approximately $750 million

Conference Call Information

Amkor will conduct a conference call on Monday, July 29, 2024, at 5:00 p.m. Eastern Time. This call may include material information not included in this press release. To access the live audio webcast and the accompanying slide presentation, visit the Investor Relations section of Amkor’s website, located at ir.amkor.com. The live call can also be accessed by dialing 1-877-407-4019 or 1-201-689-8337.

About Amkor Technology, Inc.

Amkor Technology, Inc. is the world's largest US headquartered OSAT (outsourced semiconductor assembly and test) service provider. Since its founding in 1968, Amkor has pioneered the outsourcing of IC packaging and test services and is a strategic manufacturing partner for the world's leading semiconductor companies, foundries, and electronics OEMs. Amkor provides turnkey manufacturing services for the communication, automotive and industrial, computing, and consumer industries, including but not limited to smartphones, electric vehicles, data centers, artificial intelligence and wearables. Amkor's operational base includes production facilities, research and development centers, and sales and support offices located in key electronics manufacturing regions in Asia, Europe and the United States. For more information visit amkor.com.

AMKOR TECHNOLOGY, INC.

Selected Operating Data

Q2 2024

Q1 2024

Q2 2023

Net Sales Data:

Net sales (in millions):

Advanced products (1)

1,180

1,070

1,084

Mainstream products (2)

281

296

374

Total net sales

1,461

1,366

1,458

Packaging services

Test services

Net sales from top ten customers

End Market Distribution Data:

Communications (smartphones, tablets)

Automotive, industrial and other (ADAS, electrification, infotainment, safety)

Computing (data center, infrastructure, PC/laptop, storage)

Consumer (AR & gaming, connected home, home electronics, wearables)

Total

100

Gross Margin Data:

Net sales

100.0

Cost of sales:

Materials

54.0

51.9

53.6

Labor

10.4

11.2

10.9

Other manufacturing

21.1

22.1

22.7

Gross margin

14.5

14.8

12.8

(1) Advanced products include flip chip, memory and wafer-level processing and related test services.

(2) Mainstream products include all other wirebond packaging and related test services.

In this press release, we refer to EBITDA, which is not defined by U.S. GAAP. We define EBITDA as net income before interest expense, income tax expense and depreciation and amortization. We believe EBITDA to be relevant and useful information to our investors because it provides additional information in assessing our financial operating results. Our management uses EBITDA in evaluating our operating performance, and our ability to service debt, fund capital expenditures and pay dividends. However, EBITDA has certain limitations in that it does not reflect the impact of certain expenses on our consolidated statements of income, including interest expense, which is a necessary element of our costs because we have borrowed money in order to finance our operations, income tax expense, which is a necessary element of our costs because taxes are imposed by law, and depreciation and amortization, which is a necessary element of our costs because we use capital assets to generate income. EBITDA should be considered in addition to, and not as a substitute for, or superior to, operating income, net income or other measures of financial performance prepared in accordance with U.S. GAAP. Furthermore, our definition of EBITDA may not be comparable to similarly titled measures reported by other companies. Below is our reconciliation of EBITDA to U.S. GAAP net income.

Non-GAAP Financial Measure Reconciliation:

(in millions)

Q2 2024

Q1 2024

Q2 2023

EBITDA Data:

Net income

Plus: Interest expense

Plus: Income tax expense

Plus: Depreciation & amortization

150

145

158

EBITDA

247

233

245

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2024*

2023

2024*

2023

Net sales

1,461,474

1,457,922

2,826,985

2,929,461

Cost of sales

1,249,099

1,271,052

2,412,967

2,548,170

Gross profit

212,375

186,870

414,018

381,291

Selling, general and administrative

91,280

64,860

181,626

143,531

Research and development

39,568

45,688

77,739

92,735

Total operating expenses

130,848

110,548

259,365

236,266

Operating income

81,527

76,322

154,653

145,025

Interest expense

15,805

14,354

32,244

30,521

Other (income) expense, net

(15,848

)

(11,883

)

(31,143

)

(15,435

)

Total other (income) expense, net

(43

)

2,471

1,101

15,086

Income before taxes

81,570

73,851

153,552

129,939

Income tax expense

14,312

9,407

26,508

20,271

Net income

67,258

64,444

127,044

109,668

Net income attributable to non-controlling interests

(361

)

(158

)

(1,250

)

(31

)

Net income attributable to Amkor

66,897

64,286

125,794

109,637

Net income attributable to Amkor per common share:

Basic

0.27

0.26

0.51

0.45

Diluted

0.27

0.26

0.51

0.44

Shares used in computing per common share amounts:

Basic

246,228

245,637

246,118

245,485

Diluted

247,860

246,964

247,790

247,046

*We periodically assess the estimated useful lives of our property, plant and equipment. Based on our assessment of test equipment and its increased interchangeability enabling broader and longer use, we extended the estimated useful lives of test equipment from five years to seven years as of January 1, 2024. As a result, depreciation expense was reduced by approximately $15 million and $31 million for the three and six months ended June 30, 2024, respectively. This benefited net income by approximately $13 million and $25 million and diluted earnings per share by $0.05 and $0.10 for each period, respectively.

AMKOR TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

June 30, 2024

December 31, 2023

ASSETS

Current assets:

Cash and cash equivalents

1,079,663

1,119,818

Short-term investments

465,804

474,869

Accounts receivable, net of allowances

1,147,940

1,149,493

Inventories

379,259

393,128

Other current assets

64,175

58,502

Total current assets

3,136,841

3,195,810

Property, plant and equipment, net

3,480,996

3,299,445

Operating lease right of use assets

105,527

117,006

Goodwill

17,536

20,003

Restricted cash

762

799

Other assets

123,888

138,062

Total assets

6,865,550

6,771,125

LIABILITIES AND EQUITY

Current liabilities:

Short-term borrowings and current portion of long-term debt

154,403

131,624

Trade accounts payable

734,755

754,453

Capital expenditures payable

274,702

106,368

Short-term operating lease liability

23,987

33,616

Accrued expenses

318,753

358,414

Total current liabilities

1,506,600

1,384,475

Long-term debt

949,320

1,071,832

Pension and severance obligations

78,423

87,133

Long-term operating lease liabilities

54,550

56,837

Other non-current liabilities

193,323

175,813

Total liabilities

2,782,216

2,776,090

Stockholders’ equity:

Preferred stock

—

Common stock

293

292

Additional paid-in capital

2,022,512

2,008,170

Retained earnings

2,246,795

2,159,831

Accumulated other comprehensive income (loss)

4,214

16,350

Treasury stock

(224,157

)

(222,335

)

Total Amkor stockholders’ equity

4,049,657

3,962,308

Non-controlling interests in subsidiaries

33,677

32,727

Total equity

4,083,334

3,995,035

Total liabilities and equity

6,865,550

6,771,125

AMKOR TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

For the Six Months Ended June 30,

2024

2023

Cash flows from operating activities:

Net income

127,044

109,668

Depreciation and amortization

294,874

314,647

Other operating activities and non-cash items

17,966

4,784

Changes in assets and liabilities

(52,816

)

(6,521

)

Net cash provided by operating activities

387,068

422,578

Cash flows from investing activities:

Payments for property, plant and equipment

(262,543

)

(282,309

)

Proceeds from sale of property, plant and equipment

4,813

1,107

Proceeds from foreign exchange forward contracts

5,088

22,451

Payments for foreign exchange forward contracts

(43,091

)

(50,170

)

Payments for short-term investments

(279,526

)

(355,135

)

Proceeds from sale of short-term investments

30,914

47,000

Proceeds from maturities of short-term investments

263,932

193,315

Other investing activities

5,354

4,869

Net cash used in investing activities

(275,059

)

(418,872

)

Cash flows from financing activities:

Proceeds from revolving credit facilities

—

370,000

Payments of revolving credit facilities

—

(370,000

)

Proceeds from short-term debt

5,012

11,043

Payments of short-term debt

(8,055

)

(11,149

)

Proceeds from long-term debt

58,727

—

Payments of long-term debt

(116,921

)

(72,061

)

Payments of finance lease obligations

(38,678

)

(31,129

)

Payments of dividends

(38,778

)

(36,874

)

Other financing activities

216

(1,589

)

Net cash used in financing activities

(138,477

)

(141,759

)

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash

(13,724

)

(16,091

)

Net decrease in cash, cash equivalents and restricted cash

(40,192

)

(154,144

)

Cash, cash equivalents and restricted cash, beginning of period

1,120,617

962,406

Cash, cash equivalents and restricted cash, end of period

1,080,425

808,262

Forward-Looking Statement Disclaimer

This press release contains forward-looking statements within the meaning of the federal securities laws. You are cautioned not to place undue reliance on forward-looking statements, which are often characterized by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or “intend,” by the negative of these terms or other comparable terminology or by discussions of strategy, plans or intentions. All forward-looking statements in this press release are made based on our current expectations, forecasts, estimates and assumptions. Because such statements include risks and uncertainties, actual results may differ materially from those anticipated in such forward-looking statements as a result of various factors, including, but not limited to, the following:

dependence on the cyclical and volatile semiconductor industry and vulnerability to industry downturns and declines in global economic and financial conditions;
dependence on key customers or concentration of customers in certain end markets, such as mobile communications and automotive;
changes in costs, quality, availability and delivery times of raw materials, components and equipment;
health conditions or pandemics, such as COVID-19, impacting labor availability and operating capacity, capital availability, the supply chain and consumer demand for our customers’ products and services;
fluctuations in operating results and cash flows;
our substantial indebtedness;
dependence on international factories and operations and risks relating to trade restrictions and regional conflict;
the effects of business, economic, political, legal and regulatory impacts or conflicts upon our global operations;
fluctuations in interest rates and changes in credit risk;
competition with established competitors in the packaging and test business, the internal capabilities of integrated device manufacturers and new competitors, including foundries and contract manufacturers;
difficulty funding our liquidity needs, including as a result of disruptions to the banking system and capital markets;
our substantial investments in equipment and facilities to support the demand of our customers;
difficulty attracting, retaining or replacing qualified personnel;
difficulty achieving the relatively high-capacity utilization rates necessary to realize satisfactory gross margins given our high percentage of fixed costs;
maintaining an effective system of internal controls;
the absence of backlog and the short-term nature of our customers’ commitments;
our continuing development and implementation of changes to, and maintenance and security of, our information technology systems;
the historical downward pressure on the prices of our packaging and test services;
challenges with integrating diverse operations;
fluctuations in our manufacturing yields;
any changes in tax laws, taxing authorities not agreeing with our interpretation of applicable tax laws, including whether we continue to qualify for conditional reduced tax rates, or any requirements to establish or adjust valuation allowances on deferred tax assets;
our ability to develop new proprietary technology, protect our proprietary technology, operate without infringing the proprietary rights of others and implement new technologies;
environmental, health and safety liabilities and expenditures;
warranty claims, product return and liability risks, and the risk of negative publicity if our products fail, as well as the risk of litigation incident to our business;
natural disasters and other calamities, political instability, hostilities or other disruptions;
restrictive covenants in the indentures and agreements governing our current and future indebtedness;
the possibility that we may decrease or suspend our quarterly dividend;
significant severance plan obligations associated with our manufacturing operations in Korea; and
the ability of certain of our stockholders to effectively determine or substantially influence the outcome of matters requiring stockholder approval.

Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect our operating results and financial condition are discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”) and from time to time in our other reports filed with or furnished to the Securities and Exchange Commission (“SEC”). You should carefully consider the trends, risks and uncertainties described in this press release, the Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties continues or occurs, our business, financial condition or operating results could be materially and adversely affected, the trading prices of our securities could decline, and you could lose part or all of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. We assume no obligation to review or update any forward-looking statements to reflect events or circumstances occurring after the date of this press release except as may be required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240729580620/en/

Jennifer Jue Vice President, Investor Relations and Finance 480-786-7594 jennifer.jue@amkor.com

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