We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Amkor's Capital Spending Surges: Is the Growth Worth the Cost?
Read MoreHide Full Article
Key Takeaways
Amkor expects 2026 CapEx of $2.5-$3B, targeting Arizona, HDFO, test and advanced packaging capacity.
Q2 revenues rose 26% to $1.90B as utilization climbed into the 70s and gross margin expanded to 16.8%.
New capacity adds depreciation and fixed costs, while limited backlog raises execution and utilization risks.
Amkor Technology (AMKR - Free Report) is sharply increasing capital spending to capture growth in advanced packaging, AI and data-center applications, but the higher investment also raises execution and utilization risks. The company spent $688.4 million on capital expenditures in the first half of 2026, up from $226.1 million a year earlier, and expects full-year 2026 CapEx of $2.5-$3 billion. Most spending is targeted at facility expansion, including Arizona, while the remainder is directed toward HDFO, test and other advanced packaging capacity.
The investment is supported by improving demand. Second-quarter revenues rose 26% year over year to $1.90 billion, while gross margin expanded to 16.8% from 12%. Factory utilization improved from the 50s into the 70s, highlighting the operating leverage available as capacity fills. Computing revenues reached a record, increasing 20% sequentially, and are expected to accelerate to nearly 30% in the third quarter, driven by AI data center demand and the HDFO CPU ramp.
However, Amkor’s capital-intensive model carries risks. New capacity adds depreciation and fixed costs, while the company generally has limited backlog and sometimes invests without firm customer commitments. Customer-specific equipment may also be difficult to reuse if demand weakens. As of June 30, Amkor also had $2.5 billion of debt and $1.47 billion of purchase obligations, adding to its financial commitments.
Amkor’s strong revenue growth and improving utilization support its increased capital spending. The Zacks Consensus Estimate projects 2026 and 2027 revenues of $7.64 billion and $8.55 billion, respectively, suggesting continued growth. This outlook supports Amkor’s expansion, although its success will ultimately depend on sustained demand and high utilization of the new capacity.
Are AMKR's Rivals Catching Up in Advanced Packaging?
Intel Corporation (INTC - Free Report) is stepping up advanced-packaging investment as AI demand expands, directly intensifying competition with AMKR. INTC raised 2026 CapEx above $20 billion and said packaging is included, while EMIB-T has a growing backlog and is targeted for high-volume customer ramps in 2027. With INTC also building wafer and packaging capacity, it gives AMKR a formidable capital-backed rival.
GlobalFoundries (GFS - Free Report) is expanding capacity around silicon photonics and advanced packaging for AI data centers, putting GFS into closer competition with AMKR as packaging demand rises. GFS expects 2026 CapEx at the high end of its 15%-20% range, with capacity investment a key driver. Its SCALE platform targets near-packaged and co-packaged, while GFS expands packaging capability and capacity.
AMKR’s shares have gained 35.2% year to date, outperforming the broader Zacks Computer and Technology sector’s 25.6% growth.
AMKR’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AMKR trades at a forward 12-month P/S of 1.59X, lower than the industry average of 5.26X. The company carries a Value Score of B.
AMKR’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $2.60 per share, unchanged over the past 30 days, implying 73.3% year-over-year growth.
View the Zacks #1 Rank List
Image: Bigstock
Amkor's Capital Spending Surges: Is the Growth Worth the Cost?
Key Takeaways
Amkor Technology (AMKR - Free Report) is sharply increasing capital spending to capture growth in advanced packaging, AI and data-center applications, but the higher investment also raises execution and utilization risks. The company spent $688.4 million on capital expenditures in the first half of 2026, up from $226.1 million a year earlier, and expects full-year 2026 CapEx of $2.5-$3 billion. Most spending is targeted at facility expansion, including Arizona, while the remainder is directed toward HDFO, test and other advanced packaging capacity.
The investment is supported by improving demand. Second-quarter revenues rose 26% year over year to $1.90 billion, while gross margin expanded to 16.8% from 12%. Factory utilization improved from the 50s into the 70s, highlighting the operating leverage available as capacity fills. Computing revenues reached a record, increasing 20% sequentially, and are expected to accelerate to nearly 30% in the third quarter, driven by AI data center demand and the HDFO CPU ramp.
However, Amkor’s capital-intensive model carries risks. New capacity adds depreciation and fixed costs, while the company generally has limited backlog and sometimes invests without firm customer commitments. Customer-specific equipment may also be difficult to reuse if demand weakens. As of June 30, Amkor also had $2.5 billion of debt and $1.47 billion of purchase obligations, adding to its financial commitments.
Amkor’s strong revenue growth and improving utilization support its increased capital spending. The Zacks Consensus Estimate projects 2026 and 2027 revenues of $7.64 billion and $8.55 billion, respectively, suggesting continued growth. This outlook supports Amkor’s expansion, although its success will ultimately depend on sustained demand and high utilization of the new capacity.
Are AMKR's Rivals Catching Up in Advanced Packaging?
Intel Corporation (INTC - Free Report) is stepping up advanced-packaging investment as AI demand expands, directly intensifying competition with AMKR. INTC raised 2026 CapEx above $20 billion and said packaging is included, while EMIB-T has a growing backlog and is targeted for high-volume customer ramps in 2027. With INTC also building wafer and packaging capacity, it gives AMKR a formidable capital-backed rival.
GlobalFoundries (GFS - Free Report) is expanding capacity around silicon photonics and advanced packaging for AI data centers, putting GFS into closer competition with AMKR as packaging demand rises. GFS expects 2026 CapEx at the high end of its 15%-20% range, with capacity investment a key driver. Its SCALE platform targets near-packaged and co-packaged, while GFS expands packaging capability and capacity.
AMKR’s Share Price Performance, Valuation & Estimates
AMKR’s shares have gained 35.2% year to date, outperforming the broader Zacks Computer and Technology sector’s 25.6% growth.
AMKR’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AMKR trades at a forward 12-month P/S of 1.59X, lower than the industry average of 5.26X. The company carries a Value Score of B.
AMKR’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $2.60 per share, unchanged over the past 30 days, implying 73.3% year-over-year growth.
Image Source: Zacks Investment Research
AMKR stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.