Amkor Technology (Amkor Technology (AMKR)) reported a solid second quarter that beat analyst estimates on both earnings and revenue. But the market is a forward-looking beast, and the company's third-quarter revenue guidance came in below expectations, sending shares tumbling nearly 12% in premarket trading Tuesday.

Earnings Snapshot

Amkor reported quarterly earnings of 70 cents per share, crushing the consensus estimate of 45 cents by 55.56%. Revenue came in at $1.9 billion, beating the $1.81 billion analyst estimate and up from $1.51 billion in the same period last year. Gross margin expanded to 16.8%, up more than 250 basis points from the previous quarter, while gross profit increased 33% sequentially to $319 million.

Factory utilization improved from the low-70% range in the first quarter to the high-70% range in the second quarter, driving margin expansion. The company's computing segment delivered record quarterly revenue, rising 20% sequentially, fueled by strong AI data center demand across a diverse customer base.

Segment Performance

Automotive and industrial revenue also hit a record, increasing 17% from the previous quarter, driven by growing ADAS adoption and higher semiconductor content per vehicle. Communications revenue rose 6% sequentially, supported by double-digit growth within the iOS ecosystem, while Android-related revenue declined 20% due to memory supply constraints. Consumer revenue increased 15% quarter over quarter, led by stronger demand for IoT applications.

Key Deals

Amkor signed a 10-year agreement with TSMC to expand advanced packaging and testing capacity, reinforcing the U.S. semiconductor supply chain. The company also entered a multi-year partnership with NVIDIA Corporation (NVDA) to provide advanced packaging and testing solutions for next-generation AI infrastructure. Management added that it is pursuing similar long-term capacity agreements with customers across Asia, improving visibility into future capacity utilization and demand.

Outlook

For the third quarter, Amkor expects GAAP EPS of 72 cents to 82 cents, versus the 64-cent estimate, and revenue in a range of $1.95 billion to $2.05 billion, below the $2.09 billion analyst estimate. By segment, computing revenue is expected to increase nearly 30% sequentially, driven by strong AI data center demand and HDFO CPU production ramps. Automotive and industrial revenue is projected to grow by the mid-single digits, while consumer revenue is expected to rise by the mid-teens on continued IoT demand. Communications revenue, however, is forecast to decline by high-single digits due to the transition of SiP production to Vietnam, ongoing memory supply constraints, and changes in customer build patterns.

Amkor maintained its 2026 capital expenditure outlook at $2.5 billion-$3.0 billion. Around 65%-70% of spending will support facility expansion, including Phase 1 of the Arizona campus, while 30%-35% will be allocated to HDFO testing and advanced packaging capacity. Remaining investments will focus on R&D and quality initiatives.

Management noted that about two-thirds of gross margin improvement came from higher utilization, with the rest supported by favorable product mix. For the third quarter, stronger AI computing demand is expected to be the key contributor to further margin gains. Amkor continues to target the launch of four 2.5D and four HDFO programs in 2026, with bridge technologies planned around 2028. The shift of SiP manufacturing from Korea to Vietnam is expected to pressure one application area through the fourth quarter of 2026 and into the first half of 2027.

AMKR Stock Price Activity: Amkor Technology shares were down 11.98% at $53.44 during premarket trading on Tuesday.