Amkor Technology reported record second quarter results on Monday. Revenue reached $1.9bn, up 26% on a year earlier, and net income more than tripled.
Operating income roughly doubled to $200m. Earnings came in at $0.70 a diluted share, against $0.22. EBITDA reached $400m.
The numbers matter less than what the company plans to do next. Amkor guided to capital spending of $2.5bn to $3bn for 2026. Set against first half revenue of $3.58bn, that budget runs to between 35% and 42% of annualised sales.
Packaging stopped being the cheap part
Amkor is an OSAT, which means it packages and tests chips that other companies design and fabricate. The work sat at the low-margin end of the industry for decades.
Gross margin now tells a different story. It reached 16.8%, against 12.0% a year earlier, a gain of 480 basis points. Third quarter guidance calls for 18.5% to 19.5%.
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The company’s own risk factors, printed in the same release, still warn investors about “the historical downward pressure on the prices of our packaging and test services”. That warning now describes the past.
Advanced products carried the quarter. The category, which covers flip chip and wafer-level processing, brought in $1,557m, or 82% of sales.
The spending is already committed
Amkor paid $688m for property and equipment during the first half. Reaching the full year target requires $1.8bn to $2.3bn more, roughly three times the first half rate.
Some of it is locked in. Capital expenditure payable, money owed on equipment already ordered, rose from $243m in December to $621m in June.
The balance sheet moved to match. Long-term debt climbed from $1.28bn to $2.33bn after the company raised $1.15bn during the half. Cash and short-term investments stand at $2.5bn, level with total debt.
Who pays for the capacity
Customers are funding part of it. Nvidia committed $1.5bn to expand Amkor’s American packaging capacity, structured as a prepayment.
TSMC signed a ten year agreement in June covering advanced packaging in Arizona. Amkor’s Peoria plant separately received $407m under the CHIPS Act.
The logic is geographic. Advanced packaging has concentrated in a handful of Asian sites for years, which leaves the AI supply chain with a single point of failure.
Read the comparison carefully
One figure needs unpicking. Last year’s second quarter included a $32m benefit from a contingency payment tied to the Nanium acquisition.
Strip that out and the prior year base falls to about $60m of operating income. Underlying growth then looks larger than the headline, at roughly 233%.
The real risk sits elsewhere. Amkor tells investors it has an “absence of backlog”, and that customer commitments are short term. It is committing $3bn against orders nobody has to keep.
Markets have punished that pattern before. TSMC posted record revenue and watched its shares fall on capex fears, and chip stocks swing on every read of AI demand.
One number cuts the other way. Amkor’s top ten customers supplied 66% of sales, down from 72% a year earlier. Growth is broadening rather than narrowing.
Where the revenue comes from
Communications, mostly smartphones and tablets, still provides 42% of revenue. Computing accounts for 22%, and automotive and industrial another 22%. Consumer has slipped to 14% from 18%.
Kevin Engel, president and chief executive, said the company set revenue records in computing and in automotive and industrial. He pointed to customer programmes in AI and high performance computing.
What happens next
Third quarter guidance points to revenue of $1.95bn to $2.05bn. Net income should land between $180m and $205m, or $0.72 to $0.82 a share.
The wider question is whether packaging capacity stays scarce. TSMC is building its own at Chiayi, and has raised prices across advanced manufacturing.
Margins like Amkor’s tend to attract company. The next few quarters will show whether the bottleneck holds, or whether the industry builds its way out of it and prices drift back down.
