What is driving Amkor Technology, Inc. (NASDAQ: AMKR) stock today

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Amkor Technology, Inc. (NASDAQ: AMKR) stock over 13% in the pre-market session of July 28th, 2020 (Source: Google finance) post the second quarter of 2020 update and positive third quarter of 2020 update. The firm delivered a solid Revenue rise of 31% on a yoy basis to $1,173 million driven by solid demand for advanced packaging products, supporting the communications and consumer markets. EBITDA surged 40% on a yoy basis to $209 million and EBITDA margin was 17.9%. Advanced Product portfolio rose to $729 million during the quarter from $433 million in the pcp driven by the rising level of utilization of their flip chip and wafer-level production lines as compared to the first half of 2019 during the inventory correction. Advanced SiP witnessed the highest utilization rates in the Company, driven by new RF, AiP and wearable products. For the third quarter, revenue rose 6.5% against the last quarter driven by the launch of flagship smartphones, including more 5G models as well as consumer wearables.

Gross margin remained flat at 16.4% on the back of ongoing shift in product mix to higher bill of materials packages like advanced SiP and low utilization of certain mainstream production lines hurt by weak automotive market.

Their memory business reported 15% growth sequentially and delivered over 35% on a yoy basis during the second quarter driven by NAND and flash memory business while the firm is well-positioned to capture growth in both the communication and the computing market. Consumer wearables continued to improve for fourth quarter which currently accounts 27% as compared to 24% in the first quarter of 2020 and from 15% in the second quarter of 2019. The firm’s test business rose 5% against the last quarter while increased 25% on a yoy basis given the ongoing multi-quarter trend of rising test attach rates. Computing rose 13% against the last quarter driven by all applications performance, including data center, infrastructure, storage and PC, laptops. However, the utilization rates for leadframe and wirebond lines fell during the quarter due to automotive industry weakness. CapEx is expected to be at $550 million this year due to investments in advanced SiP and test capacity and capability, as well as quality enhancement through automation.

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