AMKOR TECHNOLOGY INC

Previous wording

Amkor is one of the world’s leading providers of outsourced semiconductor packaging and test services. Our financial goal is profitable sales growth. To achieve this goal, we are focused on leveraging our leadership position in services for advanced technologies, providing our customers with a geographically diverse manufacturing footprint, growing within the industry secular growth markets of 5G, automotive, high-performance computing (“HPC”) and Internet-of-Things (“IoT”), optimizing utilization of existing assets, and selectively growing our scale and scope through strategic investments.

Current wording

Amkor is the world’s largest U.S. headquartered OSAT (outsourced semiconductor assembly and test) service provider. We are an industry leader in developing and commercializing advanced packaging and test technologies, which we believe provide substantial value to our customers. Our primary financial objective is profitable sales growth. To achieve this goal, we are focused on leveraging our leadership position in services for advanced technologies, providing our customers with a geographically diverse manufacturing footprint, growing within the industry secular growth markets of high-performance computing (“HPC”), automotive, Internet-of-Things (“IoT”) and mobile communications, selectively growing our scale and scope through strategic investments and optimizing utilization of existing assets.

Previous wording

We are an industry leader in developing and commercializing advanced packaging and test technologies, which we believe provide substantial value to our customers. Advanced packages, which account for a significant portion of mobile phone semiconductor value, are the preferred choice in the high-end smartphone market. The use of advanced packages in automotive applications is also growing, largely due to new, data-intensive applications which require increased pin count and performance. With the continuing trend towards cloud-based computing and the expanding use of artificial intelligence, innovative advanced packaging solutions are needed to achieve the increased performance and power consumption requirements for the computing end market. In consumer devices, further miniaturization and increasing functionality within IoT devices also require advanced packaging. We believe that demand for advanced packaging services will continue to grow as our customers and leading electronics original equipment manufacturers strive for smaller device geometries, higher levels of integration and performance and lower power consumption. We intend to continue to leverage our investments in advanced technology to meet the demand for these services in high growth markets.

Current wording

We believe that demand for advanced packaging services will continue to grow as our customers and leading electronics original equipment manufacturers strive for smaller device geometries, higher levels of integration and performance and lower power consumption. We intend to continue to leverage our investments in advanced technology to meet the demand for these services in high growth markets.

Previous wording

Our broad geographic footprint, including our manufacturing presence in multiple countries across Asia, in Portugal and our headquarters in the United States, is a key differentiator and positions us to continue to support global supply chains and to participate in initiatives to regionalize supply chains. We began delivering advanced packages from our Vietnam Facility in the third quarter of 2024. In addition, we are progressing plans to build an advanced packaging and test facility in Arizona. We believe our unique geographic footprint provides customers with multiple options to mitigate risk and diversify their supply chains.

Current wording

Our broad geographic footprint, including our manufacturing presence in multiple countries across Asia, in Portugal and our headquarters in the United States, is a key differentiator and positions us well to support evolving global supply chains, including initiatives to regionalize supply chains. We began delivering advanced packages from the Vietnam Facility in the third quarter of 2024. In addition, we are progressing plans to build an advanced packaging and test facility in Arizona and were awarded up to $407 million in direct funding by the U.S. Department of Commerce (“Commerce”) pursuant to the U.S. CHIPS and Science Act of 2022 (“CHIPS Act”) to support the facility, conditioned on, among other things, the achievement of certain construction and production milestones. We acquired the land for the Arizona Facility in 2024 and expect to begin construction in the second half of 2025. We believe our broad geographic footprint provides customers with multiple options to mitigate risk and diversify their supply chains.

Previous wording

As a supplier in the semiconductor industry, our business is cyclical and impacted by broad economic factors. Historical trends indicate there has been a strong correlation between worldwide gross domestic product levels, consumer spending and semiconductor industry cycles. We believe the general semiconductor market is currently going through a cyclical correction. The semiconductor industry has experienced significant and sometimes prolonged cyclical upturns and downturns in the past. We cannot predict the timing, strength or duration of any correction, economic slowdown, recession or subsequent economic recovery.

Current wording

As a supplier in the semiconductor industry, our business is cyclical and impacted by broad economic factors. Historical trends indicate there has been a strong correlation between worldwide gross domestic product levels, consumer spending and semiconductor industry cycles. The semiconductor industry has experienced significant and sometimes prolonged cyclical upturns and downturns in the past. We cannot predict the timing, strength or duration of any correction, economic slowdown, recession or subsequent economic recovery.

Previous wording

We operate in a capital-intensive industry. Servicing our current and future customers requires that we incur significant operating expenses and continue to make significant capital expenditures, which are generally made in advance of expected revenues and without firm customer commitments. We fund our operations, including capital expenditures and debt service requirements, with cash flows from operations, existing cash and cash equivalents, short-term investments, borrowings under available credit facilities and proceeds from any additional financing. Maintaining an appropriate level of liquidity is important to our business and depends on, among other considerations, the performance of our business, our capital expenditure levels, our ability to repay debt out of our operating cash flows or proceeds from debt or equity financings and our investment strategy. As of September 30, 2024, we had cash and cash equivalents and short-term investments of $959.1 million and $512.3 million, respectively.

Current wording

-23- debt service requirements, with cash flows from operations, existing cash and cash equivalents, short-term investments, borrowings under available credit facilities and proceeds from any additional financing. Maintaining an appropriate level of liquidity is important to our business and depends on, among other considerations, the performance of our business, our capital expenditure levels, our ability to repay debt out of our operating cash flows or proceeds from debt or equity financings and our investment strategy. As of March 31, 2025, we had cash and cash equivalents and short-term investments of $1,057.6 million and $505.2 million, respectively.

Previous wording

Our net sales increased $39.8 million, or 2.2%, to $1,861.6 million for the three months ended September 30, 2024 compared to $1,821.8 million for the three months ended September 30, 2023, primarily due to growth in the consumer and computing end markets, partially offset by decreases in the communications and automotive and industrial end markets.

Current wording

Our net sales decreased $43.9 million, or 3.2%, to $1,321.6 million for the three months ended March 31, 2025 compared to $1,365.5 million for the three months ended March 31, 2024, primarily due to lower sales in our communications end market, partially offset by growth in the consumer and computing end markets.

Previous wording

Operating income margin decreased 110 basis points to 8.0% for the three months ended September 30, 2024 from 9.1% for the three months ended September 30, 2023. Thedecrease in our operating income margin was primarily due to the decrease in our gross margin discussed above, increased employee compensation costs and costs incurred during start-up at the Vietnam Facility, partially offset by a reduction in bad debt expense.

Current wording

Operating income margin decreased 300 basis points to 2.4% for the three months ended March 31, 2025 from 5.4% for the three months ended March 31, 2024. Thedecrease in our operating income margin was primarily due to the decrease in our gross margin discussed above along with an increase in research and development expenses, primarily due to development projects in new advanced packaging technologies.

Previous wording

Our capital expenditures totaled $458.1 million for the nine months ended September 30, 2024 compared to $511.7 million for the nine months ended September 30, 2023. Our spending was primarily focused on investments in advanced packaging and test equipment.

Current wording

Our capital expenditures totaled $79.9 million for the three months ended March 31, 2025 compared to $96.2 million for the three months ended March 31, 2024. Our spending was primarily focused on investments in advanced packaging and test equipment.

Previous wording

Net cash provided by operating activities was $551.3 million for the nine months ended September 30, 2024 compared to $696.2 million for the nine months ended September 30, 2023. This decrease was primarily due to changes in working capital and lower operating profits.

Current wording

Net cash provided by operating activities was $24.1 million for the three months ended March 31, 2025 compared to $162.3 million for the three months ended March 31, 2024. This decrease was primarily due to changes in working capital and lower operating profits.

Previous wording

The increase in net sales for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to growth in the consumer and computing end markets, partially offset by decreases in the communications and automotive and industrial end markets. The consumer and computing end markets increased 30% and 23%, respectively, for the three months ended September 30, 2024 compared to 2023, primarily driven by strong demand for IoT wearables, ARM-based PCs and AI devices.

Current wording

The decrease in net sales for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily due to lower sales in our communications end market, partially offset by growth in the consumer and computing end markets. The communications end market decreased 19% compared to 2024 primarily due to lower supported content in premium tier smartphones. The consumer and computing end markets grew 23% and 21%, respectively, compared to 2024 primarily driven by strong demand for IoT wearables, AI devices and ARM-based PCs.

Previous wording

Selling, general and administrative expenses increased for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023, primarily due to increased employee compensation costs and costs incurred during start-up at the Vietnam Facility, partially offset by a reduction in bad debt expense. For the three and nine months ended September 30, 2024, the costs incurred during start-up at the Vietnam Facility increased approximately $3 million and $28 million, respectively, compared to 2023.

Current wording

Selling, general and administrative expenses decreased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to the incremental costs incurred in 2024 during start-up at the Vietnam Facility and decreased compensation costs, partially offset by the recovery of bad debt expense in 2024. The incremental costs incurred during start-up at the Vietnam Facility were approximately $12 million for the three months ended March 31, 2024.

Previous wording

Research and development expenses decreased for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to the utilization mix of assets shared with manufacturing and projects moving into production, partially offset by new development projects in packaging technologies.

Current wording

Research and development expenses increased for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to development projects in new advanced packaging technologies.

Previous wording

During the nine months ended September 30, 2024 and 2023, our subsidiaries in Korea and Singapore operated under various conditional reduced tax rates. Beginning in 2024, our subsidiary in Vietnam also operated under various conditional reduced tax rates. As these conditional reduced tax rates expire, income earned in these jurisdictions will be subject to higher statutory income tax rates, which may cause our effective tax rate to increase.

Current wording

During the three months ended March 31, 2025 and 2024, our subsidiaries in Korea, Singapore and Vietnam operated under various conditional reduced tax rates. As these conditional reduced tax rates expire, income earned in these jurisdictions will be subject to higher statutory income tax rates, which may cause our effective tax rate to increase.

Previous wording

As of September 30, 2024, we had cash and cash equivalents and short-term investments of $1,471.5 million. Included in our cash and short-term investments balances as of September 30, 2024 is$1,305.5 million held offshore by our foreign subsidiaries. We have the ability to access cash held offshore by our foreign subsidiaries primarily through the repayment of intercompany debt obligations. If we were to distribute this offshore cash to the United States as dividends from our foreign subsidiaries, the dividends generally would not be subject to U.S. federal income tax, but the distributions may be subject to foreign withholding and state income taxes.

Current wording

As of March 31, 2025, we had cash and cash equivalents and short-term investments of $1,562.7 million. Included in our cash and short-term investments balances as of March 31, 2025 is$1,350.7 million held offshore by our foreign subsidiaries. We have the ability to access cash held offshore by our foreign subsidiaries primarily through the repayment of intercompany debt obligations. If we were to distribute this offshore cash to the United States as dividends from our foreign subsidiaries, the dividends generally would not be subject to U.S. federal income tax, but the distributions may be subject to foreign withholding and state income taxes.

Previous wording

-27- cash at a discount to the face amount. Available capacity under these arrangements is dependent on the level of our trade accounts receivable eligible to be sold, the financial institutions’ willingness to purchase such receivables and the limits provided by the financial institutions. These factoring arrangements can be reduced or eliminated at any time due to market conditions and changes in the creditworthiness of customers. For the nine months ended September 30, 2024 and 2023, we sold accounts receivable totaling $59.4 million and $149.8 million, net of discounts and fees of $0.1 million and $0.3 million, respectively.

Current wording

For certain accounts receivable, we use non-recourse factoring arrangements with third party financial institutions to manage our working capital and cash flows. Under these arrangements, we sell receivables to a financial institution for cash at a discount to the face amount. Available capacity under these arrangements is dependent on the level of our trade accounts receivable eligible to be sold, the financial institutions’ willingness to purchase such receivables and the limits provided by the financial institutions. These factoring arrangements can be reduced or eliminated at any time due to market conditions and changes in the creditworthiness of customers. For the three months ended March 31, 2025 and 2024, we sold receivables totaling $9.4 million and $24.4 million, respectively, net of discounts and fees, which were insignificant for the respective periods.

Previous wording

The maximum borrowing capacity under the 2022 Singapore Revolver is limited to a base amount equal to the lesser of: (1) $600.0 million; or (2) $250.0 million plus a variable amount equal to 37.5% of our consolidated accounts receivable balance. As of September 30, 2024, we had availability of $600.0 million. As of September 30, 2024, our foreign subsidiaries had $615.0 million available for future borrowings under revolving credit facilities, including the 2022 Singapore Revolver, and $65.0 million available to be borrowed under term loan credit facilities for working capital purposes and capital expenditures. For additional information regarding the 2022 Singapore Revolver, please refer to Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q.

Current wording

The maximum borrowing capacity under the 2022 Singapore Revolver is limited to a base amount equal to the lesser of: (1) $600.0 million; or (2) $250.0 million plus a variable amount equal to 37.5% of our consolidated accounts receivable balance. As of March 31, 2025, we had availability of $600.0 million. As of March 31, 2025, our foreign subsidiaries also had $57.6 million available to be borrowed under term loan credit facilities. For additional information regarding the 2022 Singapore Revolver, please refer to Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q.

Previous wording

As of September 30, 2024, we had debt of $1,101.6 million, with $207.6 million payable within 12 months. As of September 30, 2024, the interest payment obligations, based on stated coupon rates for fixed rate debt and interest rates applicable at September 30, 2024 for variable rate debt, were $134.6 million during the remaining term of the debt. Interest payment obligations payable within 12 months is $50.1 million. We were in compliance with all debt covenants as of September 30, 2024, and we expect to remain in compliance with these covenants for at least the next 12 months. For additional information regarding our debt arrangements, please refer to Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q.

Current wording

As of March 31, 2025, we had debt of $1,149.3 million, with $236.5 million payable within 12 months. As of March 31, 2025, the interest payment obligations, based on stated coupon rates for fixed rate debt and interest rates applicable at March 31, 2025 for variable rate debt, were $113.2 million during the remaining term of the debt. Interest payment obligations payable within 12 months were $48.6 million. We were in compliance with all debt covenants as of March 31, 2025, and we expect to remain in compliance with these covenants for at least the next 12 months. For additional information regarding our debt arrangements, please refer to Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q.

Previous wording

We lease certain machinery and equipment, office space and manufacturing facilities. As of September 30, 2024, our total remaining operating lease obligations and finance lease obligations were $104.7 million and $199.5 million, respectively, with $31.8 million and $68.1 million payable within 12 months, respectively. The lease obligations represent our future minimum lease payments including interest payments.

Current wording

We lease certain machinery and equipment, office space and manufacturing facilities. As of March 31, 2025, our total remaining operating lease obligations and finance lease obligations were $92.8 million and $198.8 million, respectively, with $29.4 million and $62.9 million payable within 12 months, respectively. The lease obligations represent our future minimum lease payments including interest payments.

Previous wording

We had off-balance sheet purchase obligations for capital expenditures, long-term supply contracts and other contractual commitments. As of September 30, 2024, the purchase obligations were $368.3 million, with $323.9 million payable within 12 months.

Current wording

We had off-balance sheet purchase obligations for capital expenditures, long-term supply contracts and other contractual commitments. As of March 31, 2025, the purchase obligations were $497.7 million, with $455.8 million payable within 12 months.

Previous wording

During the nine months ended September 30, 2024, we paid total quarterly cash dividends of $58.2 million, and we currently anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend upon our results of operations, financial condition, cash requirements, debt restrictions and other factors.

Current wording

During the three months ended March 31, 2025, we declared total quarterly cash dividends of $20.4 million, which were paid on April 2, 2025, and we currently anticipate that we will continue to pay quarterly cash dividends in the future. However, the payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend upon our results of operations, financial condition, cash requirements, debt restrictions and other factors.

Previous wording

We make significant capital expenditures in order to service the demand of our customers, which are primarily focused on investments in advanced packaging and test equipment. During the nine months ended September 30, 2024, our capital expenditures totaled $458.1 million.

Current wording

We make significant capital expenditures in order to service the demand of our customers, which are primarily focused on investments in advanced packaging and test equipment. During the three months ended March 31, 2025, our capital expenditures totaled $79.9 million.

Previous wording

We expect that our 2024 capital expenditures will be approximately $750 million. Ultimately, the amount of our 2024 capital expenditures will depend on several factors including, among others, the timing and implementation of any capital projects under review, the performance of our business, economic and market conditions, the cash needs and investment opportunities for the business, the need for additional capacity to service anticipated customer demand, equipment lead times and the availability of cash flows from operations or financing. We expect that our 2024 capital expenditures related to our planned advanced packaging and test facility in Arizona will be primarily for design and construction planning. The primary sources of funds for our capital expenditures are cash flows from operations, current cash and cash equivalents, short-term investments, borrowings under available credit facilities and proceeds from any additional debt or equity financings. Please refer to Note 7 and Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q for additional information on our investments and borrowings, respectively.

Current wording

We expect that our 2025 capital expenditures will be approximately $850 million, approximately 5% to 10% of which we expect to spend on the construction of the Arizona Facility. Ultimately, the amount of our 2025 capital expenditures will depend on several factors including, among others, the timing and implementation of any capital projects under review, including the commencement of construction for the Arizona Facility, the performance of our business, economic and market conditions, the cash needs and investment opportunities for the business, the need for additional capacity to service anticipated customer demand, equipment lead times and the availability of cash flows from operations or financing. The primary sources of funds for our capital expenditures are cash flows from operations, current cash and cash equivalents, short-term investments, borrowings under available credit facilities and proceeds from any additional debt or equity financings. Please refer to Note 7 and Note 11 to our Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q for additional information on our investments and borrowings, respectively.

Previous wording

Net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2024 and 2023, was as follows:

Current wording

Net cash provided by (used in) operating, investing and financing activities for the three months ended March 31, 2025 and 2024, was as follows:

Previous wording

Operating activities: Our cash flow provided by operating activities for the nine months ended September 30, 2024 decreased by $144.9 million compared to the nine months ended September 30, 2023, primarily due to changes in working capital and lower operating profits.

Current wording

Operating activities: Our cash flow provided by operating activities for the three months ended March 31, 2025 decreased by $138.2 million compared to the three months ended March 31, 2024, primarily due to changes in working capital and lower operating profits.

Previous wording

Investing activities: Our cash flow used in investing activities for thenine months ended September 30, 2024 decreased by $195.1 million compared to the nine months ended September 30, 2023, primarily due to lower net payments for short-term investment activity, lower payments for property, plant and equipment and lower net payments for foreign exchange forward contracts in the current year.

Current wording

Investing activities: Our cash flow used in investing activities for thethree months ended March 31, 2025 decreased by $23.0 million compared to the three months ended March 31, 2024, primarily due to net proceeds from foreign exchange forward contracts in the current year and lower payments for property, plant and equipment, partially offset by lower net proceeds for short-term investment activity. Payments for property, plant and equipment can fluctuate based on the timing of purchase, receipt and acceptance of equipment.