Oct 26, 2026 earnings call — Advanced packaging expansion and capacity investments
Amkor reported Q3 revenue of $1.99 billion and gross margin of 18.3%, with record Computing and Automotive and Industrial revenue.
Revenue $2.0B (est $2.0B) · EPS $0.76 (est $0.78) · Next-quarter revenue outlook $1.9B–$2.0B
Key quotes
"Customers are engaging earlier, aligning technology road maps and making longer-term commitments as advanced packaging becomes increasingly critical to AI and high-performance computing."
"An additional HDFO CPU program for a hyperscaler began ramping in Q3 and 2 new 2.5D programs in networking and data center are expected to come online in Q4."
"Together, both phases are planned to be over 90,000 square meters of clean room space and represent an estimated investment of $12 billion."
Analyst Q&A 7
Q4 gross margin drivers
Q (Ruplu Bhattacharya · BofA): They asked how to think about the guided ~20 bps sequential gross margin improvement in Q4 given the SiP move to Vietnam, weak Android smartphones, FX, and any Japan issues. The analyst also asked how NVIDIA-related prepayments ($3 billion) split between Korea and Arizona, and whether margins, capital returns, and equipment fungibility differ between the two locations.
A: Management said Q4 gross margin expands modestly mainly from better product mix tied to compute growth and lower SiP, while they still expect unfavorable FX and sequential weakness in Communications with both Android and iOS down. They said Korea will free capacity as SiP moves to Vietnam and will add buildings and equipment, with Korea construction in 2027 at $400 million to $450 million and Vietnam expansion facility-wise for 2027 at $50 million. Arizona's ramp is later (more of a late 2028 profile), will be higher cost but will run at high utilization and strong automation; they said CAP agreements reduce risk and the advanced packaging assets are largely fungible.
"So correct, we are going to see some modest expansion in our gross margin in Q4." — Megan Faust (CFO)
compute growth and auto demand
Q (Joseph Moore · Morgan Stanley): He asked why compute grew 25% versus prior talk of 30% and wanted the trajectory or constraints. He also asked what they are seeing in Automotive demand.
A: Management said the compute growth timing was not due to supply constraints but due to loading a long, complex process flow for HDFO parts that has "over 300 steps" and that building WIP and pipeline takes time. On end markets they said Automotive and Industrial are very positive, with advanced in-car compute and ADAS growing, shorter product development cycles, rising semiconductor content per car, and legacy automotive packages also rebounding.
"This is over 300 steps in the process." — Kevin Engel (CEO)
compute outlook and comms seasonality
Q (Jack Adair · Melius): He asked about momentum in Computing into 2027 as more Korea capacity and data center engagements come online and whether the pace can continue. He also asked about Communications seasonality and content gains with new Apple launch form factors.
A: They said they expect over 30% growth in Computing from 2025 to 2026 driven by data center offsetting soft PC, and they expect a similar or even higher growth rate into 2027 based on the space profile they outlined. On Communications they said it's too early to define the full-year profile, launches may change typical seasonality, and form factors are less important than unit sales.
"We would expect a similar growth rate to even higher growth rate into 2027, again, based on that space profile that I outlined already." — Kevin Engel (CEO)
fan-out bridge progress and pricing
Q (Randy Abrams · UBS): He asked for an update on the fan-out bridge opportunity and whether compute is broadening beyond the core CPU into other projects. He also asked about rising substrate/material costs, pricing, and whether SiP could rebound to offset costs.
A: They said the bridge is progressing as expected and is a late 2027 into '28 opportunity, with discussions ongoing and customers securing capacity into 2027 and 2028. They said core CPU programs are scaling fastest but they also have xPU, networking, and 2.5D switch programs on track. On costs they said they are managing supplier cost pressure, typically passing costs to customers, see an attractive pricing environment given limited suppliers and tight capacity, and expect SiP to rebound with pipeline but not to dramatically accelerate margin on its own.
"We talked about that being a late 2027 opportunity into '28." — Kevin Engel (CEO)
CapEx effect on margins and pricing power
Q (Steven Fox · Fox Advisors): He asked how the capacity expansion and higher CapEx could impact gross margins and what mix offsets to expect. He also asked how the company is creating pricing power in these agreements.
A: They said they are stepping up facility CapEx but are not yet giving full 2027 guidance; Arizona could be up to 15% of that $12 billion in '27, Korea $400 million to $450 million, and Vietnam $50 million, and those programs alone are higher than $2 billion. Megan said Arizona won't be recognized in the income statement until completed at the end of '27 and depreciation is rising (mid-teens percent increase in depreciation in '26 and likely higher in '27), so the margin impact is still too early to quantify, though compute growth should benefit margins. Kevin said customers understand the need for returns on large capital investments, and they feel optimistic about the pricing environment under multiyear agreements.
"So altogether, those are higher than $2 billion just around those programs." — Megan Faust (CFO)
CapEx funding and margin resilience
Q (Steve Barger · KeyBanc): He asked if they can fund the build-out without taking on more debt given prepayments from customers. He also asked if prolonged softness in consumer electronics would change margin or earnings given the planned CapEx, or if AI compute acceleration would offset it.
A: Megan said with what they have outlined there will be significant support in '27 and through '28, and that it's still too early to tell about incremental debt in '28 and beyond but the balance sheet is solid through 2027. Kevin said compute will continue to accelerate and become a larger, attractive margin business, Communications will grow but not at compute rates, assets will see troughs but utilization should rise over time, and the diversified portfolio cushions weakness in any one market.
"But I would say the balance sheet positioning is solid through 2027." — Megan Faust (CFO)
memory price impact and long-term CapEx
Q (Denis Pyatchanin · Needham & Company): He asked how high memory prices affected PC and smartphone volumes now and for next year, and asked Megan for a longer-term outlook on CapEx intensity and whether it will taper in 2–3 years.
A: Kevin said memory pricing and availability have affected both Communications and PC markets, with Android and especially low-tier phones having more trouble absorbing cost increases, while PC costs were also impacted; he noted the ARM migration from x86 helps offset some challenges. Megan said '27 will step up CapEx for facility build-outs, Arizona build-out will peak in '28 and '29 because Phase 2 overlaps Phase 1 equipment, CapEx will stay elevated through those periods and then probably taper back down, and they have not provided a long-term normalized CapEx level.
"I'd say, obviously, memory pricing and then just availability in general has affected both markets." — Kevin Engel (CEO)