Amkor Technology Reports Financial Results for the Fourth Quarter and Full Year 2024

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Mon, Feb 10, 2025, 2:04 PM 17 min read

"In 2024, weakness in the automotive and industrial and communications end markets contributed to a full year decline. In contrast, we achieved record revenue in our computing end market with growth in ARM-based PCs and AI devices," said Giel Rutten, Amkor’s president and chief executive officer. "During the year, we also successfully ramped our new facility in Vietnam, secured CHIPS funding to bolster U.S. manufacturing, and set a new record for Advanced SiP revenue. We remain confident in our long-term strategy and continue to invest in technology for advanced packaging and our broad geographic footprint with a focus on industry megatrends."

Financial Results

($ in millions, except per share data)	Q4 2024	Q3 2024	Q4 2023	2024	2023
Net sales	$1,629	$1,862	$1,752	$6,318	$6,503
Gross margin	15.1%	14.6%	15.9%	14.8%	14.5%
Operating income	$134	$149	$159	$438	$470
Operating income margin	8.3%	8.0%	9.1%	6.9%	7.2%
Net income attributable to Amkor	$106	$123	$118	$354	$360
Earnings per diluted share	$0.43	$0.49	$0.48	$1.43	$1.46
EBITDA (1)	$302	$309	$326	$1,091	$1,135
Net cash provided by operating activities				$1,089	$1,270
Annual free cash flow (1)				$359	$534

(1) EBITDA and free cash flow are non-GAAP measures. The reconciliations to the comparable GAAP measures are included below under "Selected Operating Data."

At December 31, 2024, total cash and short-term investments was $1.65 billion, and total debt was $1.16 billion.

On November 13, 2024, Amkor’s Board of Directors announced a 5% increase in the quarterly cash dividend on the company’s common stock, from $0.07875 per share to $0.08269 per share. The Board of Directors also approved a special cash dividend of $0.40546 per share, or approximately $100 million, on the company’s common stock. The increased quarterly dividend and special dividend were each paid on December 23, 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 first quarter 2025 (unless otherwise noted):

Net sales of $1.225 billion to $1.325 billion
Gross margin of 10.0% to 13.0%
Net income of $3 million to $43 million, or $0.01 to $0.17 per diluted share
Full year 2025 capital expenditures of approximately $850 million

Conference Call Information

Amkor will conduct a conference call on Monday, February 10, 2025, 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

	Q4 2024			Q3 2024			Q4 2023			2024			2023
Net Sales Data:
Net sales (in millions):
Advanced Products (1)		$1,357			$1,568			$1,430			$5,175			$5,033
Mainstream Products (2)		272			294			322			1,143			1,470
Total net sales		$1,629			$1,862			$1,752			$6,318			$6,503


Packaging services		88	%		90	%		89	%		89	%		88	%
Test services		12	%		10	%		11	%		11	%		12	%

Net sales from top ten customers		73	%		74	%		71	%		72	%		69	%

End Market Distribution Data:
Communications (smartphones, tablets)		44	%		52	%		56	%		48	%		50	%
Computing (data center, infrastructure, PC/laptop, storage)		21	%		16	%		13	%		19	%		16	%
Automotive, industrial and other (ADAS, electrification, infotainment, safety)		17	%		16	%		19	%		18	%		21	%
Consumer (AR & gaming, connected home, home electronics, wearables)		18	%		16	%		12	%		15	%		13	%
Total		100	%		100	%		100	%		100	%		100	%

Gross Margin Data:
Net sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales:
Materials		54.8	%		58.4	%		56.5	%		55.1	%		55.1	%
Labor		9.9	%		8.7	%		9.1	%		9.9	%		9.9	%
Depreciation		8.4	%		7.4	%		8.2	%		8.5	%		8.9	%
Other manufacturing		11.8	%		10.9	%		10.3	%		11.7	%		11.6	%
Gross margin		15.1	%		14.6	%		15.9	%		14.8	%		14.5	%

(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.

AMKOR TECHNOLOGY, INC. Selected Operating Data

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, and our ability to 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 Measures Reconciliation:
(in millions)	Q4 2024		Q3 2024		Q4 2023		2024		2023
EBITDA Data:
Net income	$	106	$	123	$	119	$	356	$	362
Plus: Interest expense		17		16		15		65		59
Plus: Income tax expense		30		19		33		75		82
Plus: Depreciation & amortization		149		151		159		595		632
EBITDA	$	302	$	309	$	326	$	1,091	$	1,135

AMKOR TECHNOLOGY, INC. Selected Operating Data

In this press release, we refer to free cash flow, which is not defined by U.S. GAAP. We define free cash flow as net cash provided by operating activities less payments for property, plant and equipment, plus proceeds from the sale of, insurance recovery for and grants for property, plant and equipment, if applicable. We believe free cash flow to be relevant and useful information to our investors because it provides them with additional information in assessing our liquidity, capital resources and financial operating results. Our management uses free cash flow in evaluating our liquidity, our ability to service debt, our ability to fund capital expenditures and our ability to pay dividends and the amount of dividends to be paid. However, free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other, non-discretionary expenditures, such as mandatory debt service, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. This measure should be considered in addition to, and not as a substitute for, or superior to, other measures of liquidity or financial performance prepared in accordance with U.S. GAAP, such as net cash provided by operating activities. Furthermore, our definition of free cash flow may not be comparable to similarly titled measures reported by other companies. Below is our reconciliation of free cash flow to U.S. GAAP net cash provided by operating activities.

Non-GAAP Financial Measures Reconciliation:
(in millions)	2024			2023
Free Cash Flow Data:
Net cash provided by operating activities	$	1,089		$	1,270
Less: Payments for property, plant and equipment		(744	)		(749	)
Plus: Proceeds from sale of and grants for property, plant and equipment		14			13
Free cash flow	$	359		$	534

AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)

	For the Three Months Ended December 31,						For the Year Ended December 31,
	2024			2023			2024			2023
Net sales	$	1,629,118		$	1,751,811		$	6,317,692		$	6,503,065
Cost of sales		1,382,408			1,472,702			5,384,480			5,559,912
Gross profit		246,710			279,109			933,212			943,153
Selling, general and administrative		69,427			78,842			331,806			295,393
Research and development		42,848			41,603			162,951			177,473
Total operating expenses		112,275			120,445			494,757			472,866
Operating income		134,435			158,664			438,455			470,287
Interest expense		17,079			15,478			64,945			59,000
Other (income) expense, net		(18,233	)		(8,342	)		(57,506	)		(32,554	)
Total other (income) expense, net		(1,154	)		7,136			7,439			26,446
Income before taxes		135,589			151,528			431,016			443,841
Income tax expense		29,788			32,516			75,481			81,710
Net income		105,801			119,012			355,535			362,131
Net income attributable to noncontrolling interests		(152	)		(1,450	)		(1,523	)		(2,318	)
Net income attributable to Amkor	$	105,649		$	117,562		$	354,012		$	359,813

Net income attributable to Amkor per common share:
Basic	$	0.43		$	0.48		$	1.44		$	1.46
Diluted	$	0.43		$	0.48		$	1.43		$	1.46
Shares used in computing per common share amounts:
Basic		246,654			245,799			246,344			245,628
Diluted		247,864			247,243			247,818			247,176

*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 $13 million and $59 million for the three months ended and the year ended December 31, 2024, respectively. This benefited net income by approximately $11 million and $49 million and diluted earnings per share by $0.05 and $0.20 for each period, respectively.

AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

	December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,133,553		$	1,119,818
Short-term investments		512,984			474,869
Accounts receivable, net of allowances		1,055,013			1,149,493
Inventories		310,910			393,128
Other current assets		61,012			58,502
Total current assets		3,073,472			3,195,810
Property, plant and equipment, net		3,576,148			3,299,445
Operating lease right of use assets		109,730			117,006
Goodwill		17,947			20,003
Restricted cash		759			799
Other assets		166,272			138,062
Total assets	$	6,944,328		$	6,771,125

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	236,029		$	131,624
Trade accounts payable		712,887			754,453
Capital expenditures payable		123,195			106,368
Short-term operating lease liability		26,827			33,616
Accrued expenses		356,337			358,414
Total current liabilities		1,455,275			1,384,475
Long-term debt		923,431			1,071,832
Pension and severance obligations		70,594			87,133
Long-term operating lease liabilities		57,983			56,837
Other non-current liabilities		253,880			175,813
Total liabilities		2,761,163			2,776,090

Amkor stockholders’ equity:
Preferred stock		—			—
Common stock		293			292
Additional paid-in capital		2,031,643			2,008,170
Retained earnings		2,335,132			2,159,831
Accumulated other comprehensive income		7,510			16,350
Treasury stock		(225,033	)		(222,335	)
Total Amkor stockholders’ equity		4,149,545			3,962,308
Noncontrolling interests in subsidiaries		33,620			32,727
Total equity		4,183,165			3,995,035
Total liabilities and equity	$	6,944,328		$	6,771,125

AMKOR TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

	For the Year Ended December 31,
	2024			2023
Cash flows from operating activities:
Net income	$	355,535		$	362,131
Depreciation and amortization		594,663			631,508
Other operating activities and non-cash items		25,303			39,654
Changes in assets and liabilities		113,367			236,727
Net cash provided by operating activities		1,088,868			1,270,020

Cash flows from investing activities:
Payments for property, plant and equipment		(743,796	)		(749,467	)
Proceeds from sale of property, plant and equipment		3,981			8,444
Proceeds from foreign exchange forward contracts		47,045			44,013
Payments for foreign exchange forward contracts		(88,623	)		(75,786	)
Payments for short-term investments		(568,711	)		(657,583	)
Proceeds from sale of short-term investments		65,502			94,242
Proceeds from maturities of short-term investments		474,097			379,344
Other investing activities		10,181			4,883
Net cash used in investing activities		(800,324	)		(951,910	)

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			20,712
Payments of short-term debt		(9,731	)		(19,448	)
Proceeds from long-term debt		172,651			168,335
Payments of long-term debt		(177,214	)		(175,427	)
Payments of finance lease obligations		(72,255	)		(66,398	)
Payments of dividends		(178,605	)		(74,686	)
Other financing activities		(290	)		(2,295	)
Net cash used in financing activities		(260,432	)		(149,207	)

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash		(14,417	)		(10,692	)

Net increase in cash, cash equivalents and restricted cash		13,695			158,211
Cash, cash equivalents and restricted cash, beginning of period		1,120,617			962,406
Cash, cash equivalents and restricted cash, end of period	$	1,134,312		$	1,120,617

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;
conditions to, and obligations related to, the receipt of government incentives;
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/20250210565899/en/

Contacts

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

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