Ronen Hayempour

$000660 $402340 SK Square trades at 2x earnings and owns 20% of SK Hynix Available on Interactive Brokers now — much cheaper than $MU (SK Hynix has similar market cap to MU but 2x profit) … and they tell me I’m a “pump account”

FULL BREAKDOWN OF $AMKR Q1 2026 EARNINGS This is a great read if you are interested in $AMKR, never heard of it, or are an investor. Let’s dive in! (Buckle up this is loooong) First off, highlights: • Record Q1 Revenue $1.68 billion, up 27% YoY • Gross profit $239 million, operating income $100 million • Net income $83 million, Diluted EPS $0.33 • EBITDA $285 million • YoY growth across all end markets Q2 2026 Guidance: • Revenue of $1.75 billion - $1.85 billion • Gross margin of 14.5% - 15.5% • Net income of $105 million - $130 million, or $0.42 - $0.52 per diluted share • FY2026 CapEx of ~$2.5 billion - $3.0 billion Gross margin of 14.2%, down from 16.7% QoQ but up from Q1 2025 of 11.9% Operating Income margin of 6.0%, down from Q4 2025 9.8% but up from Q1 2025 of 2.4% Not worried. Q4 2025 they guided lower in expectation of this for Q1 2026. Also, the lowest end of the Q2 2026 guidance is 14.5%, an increase of .3% from this quarter (bearish outlook). Total Debt / Total Cash ratio of 1.26x Stock buyback of up to $300 million but also raising $1.15 billion through convertible senior notes due in 2031. They are expanding greatly. The phase 1 construction of the Arizona facility is planned to be completed in 2027 and in Korea the new test building is on track for completion at the end of 2026. Growth data you can read. Solid results imo. 👇 Communications: - Q1 revenue up 42% YoY - Strong demand across premium tier smartphones Computing - Q1 revenue up 19% YoY - Record AI datacenter revenue - Softness in PCs and laptops Automotive and Industrial - Q1 revenue up 28% YoY - Record Advanced packaging revenue - Mainstream demand improving Consumer - Q1 revenue up 4% YoY - Broad-based improvement in demand across customers EARNINGS CALL: MY FAVORITE PART 🥳 Gross Margin Expansion Outlook: - Back to the gross margins, they expect them to improve into the mid to high teens in Q2, driven by stronger pricing, higher factory utilization, and a better product mix from growth in advanced packaging and data center compute demand. Pricing Strategy and Customer Acceptance: - For Japan specifically they began raising prices in Q1 and are now working with nearly all customers to gradually increase pricing throughout the year, with customers generally willing to accept higher prices to help offset rising material costs. - This will help increase gross margins. CPU Ramp and Near-Term Timing: - There will be a ramp for commuting, specifically for the CPU device, which will start from Q1. The meaningful revenue from this will start to show in Q3, so I’m interested in what Q2 will bring. - Overall sounds good, not particularly worried about one shaky quarter due to the cyclical nature of the industry. Customer Concentration Improving: - The revenue from the top 10 customers is now 68%, down from 72% in Q4 2025 and 71% in Q1 2026. This is good to see, with revenue increasing and dependence on the heavy hitters lessening, hopefully it continues gradually. Cost of Sales Trends: - The cost of sales have essentially stayed flat YoY with a 1.1% increase to 53.5%. However, it's down from 56.5% last Q. - For Q2, I’d like to see that down again with the increase in gross margin. Arizona Margin Impact (Short-Term): - They are signaling that the Arizona facility will create a temporary 1 to 2 percentage point drag on operating margins in 2027 due to upfront costs like depreciation and ramp expenses, though the exact timing is still uncertain and depends on equipment delivery and customer qualification. - Something to monitor but I’m not worried; it’s bound to happen and the benefits for the facility are immense long-term. Cost Transition (OpEx to COGS): - These costs will initially hit operating expenses, then shift into COGS sold once production begins, similar to prior ramps like Vietnam (which just broke break even!). Arizona Revenue Ramp Timeline: - Revenue from Arizona is expected to start modestly in 2028, scale meaningfully in 2029, and fully ramp by 2030, which should offset the early margin pressure over time. - This plays out perfectly with my ~2030 thesis. Arizona scale: - The Arizona facility is expected to reach about a $1 billion revenue run rate over time, roughly 10% or more of $AMKR current revenue base, though revenue per square foot may be higher than typical capacity since it focuses on advanced packaging. EMIB + COAS-L: - They continue to work with Intel on EMIB-related outsourcing. - For COAS-L they do have one CPU product that they are working on. This will be more relevant in 2027 since they are early in the development cycle and it’s going to take time. - Due to the constraints in general in the supply chain and in the packaging space, customers are very motivated to try to move as quickly as they can to develop these new technologies and new supply chain options. - This is beneficial and bullish for $AMKR so great to hear. AI advanced packaging growth (3x YoY): - AI-related advanced packaging revenue is still expected to triple year over year, with potential for more than that, but growth could be limited by external constraints like silicon and memory supply as well as how quickly they can ramp up new equipment. End-market growth outlook: - Compute remains the strongest segment at around 20% growth, driven by AI/data center demand despite weaker PCs; automotive and industrial are growing solidly due to ADAS and in-car computing; communications is now trending stronger than expected, improving from prior single-digit expectations to potentially low double-digit growth. - However, the typical second-half seasonal boost may be less pronounced because the first half is already unusually strong. PC demand quality: - PC demand itself isn’t especially strong, but they are being supported by a shift toward higher-end devices and some customer supply chain reallocations. CapEx timing (2026): - Capital spending will be heavily back-half weighted, with about 30% in the first half and 70% in the second half, partly due to timing delays in payments and equipment deliveries. Memory impact: - High memory prices are creating some supply constraints, pushing out an estimated $50 million to $100 million of revenue per quarter, but demand overall remains strong. Arizona margins + funding: - The Arizona facility is expected to generate margins meaningfully above $AMKR corporate average once scaled, though details will come later. - The $7 billion investment will be supported by government incentives (including CHIPS funding and tax credits worth about $2.8B), customer contributions, and Amkor’s own liquidity and potential debt. Export controls + macro risks: - The main risks being monitored are rising input costs driven by commodities and geopolitics (like oil and metals), along with ongoing US-China trade restrictions around AI, though $AMKR says these are now more normalized and manageable rather than a major disruption. Overall takeaway: - $AMKR is seeing strong demand, especially in AI and advanced packaging, with utilization rising and capacity expanding globally, while near-term constraints come from supply chain limits and heavy investment spending ahead of major growth from Arizona later on. - I’m very bullish and continue to hold with my $30 entry. I am hoping to see a decent dip to (worst I see is $50) so I can scoop up a bunch of more shares! That’s it! Hope you enjoyed. I would love to hear your thoughts in the comments or if you have anything else to add. Would love a like and follow, thank you.

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