Due to weak demand, US packaging and testing company Amkor Technology is reportedly closing its Hakodate, Japan plant. Amkor's stock price plummeted yesterday (14th).
According to MoneyDJ XQ Global Winner system quotes, Amkor shares plummeted 6.31% on the 14th, closing at $48.67. Year-to-date, Amkor's stock price has surged approximately 23%.
Nikkei reported on the 14th that Amkor is reportedly closing its Hakodate plant (located in Nanaie, Hokkaido). The plant will close by December 2027, after which its production capacity will be integrated into its existing plant in Kyushu.
The Hakodate plant employs 380 people and is responsible for packaging general-purpose semiconductors used in automotive and other applications. Demand for automotive products has been weak due to sluggish sales of electric vehicles (EVs) since 2023.
Amkor Japan responded that "the future demand outlook for products manufactured at the Hakodate plant is lower than originally expected, and a recovery is anticipated to be difficult." Production of some products at the Hakodate plant will cease, and the remaining products are targeted to be transferred to other plants by April 2027, with completion expected by the end of 2027 at the latest.
It hit a 25-year high just a week ago
About Amkor Technology
Amkor Technology, Inc. is a leading global provider of semiconductor packaging and testing outsourcing services. The company offers wafer bumping, package design, back-side grinding, system-level testing, and advanced packaging solutions such as flip chip and wire bonding, MEMS, and fan-out packaging. It serves semiconductor and electronics manufacturers worldwide. Founded in 1968, Amkor Technology, Inc. is headquartered in Tempe, Arizona.
Recently, analysts raised their target price for Amkor Technology, a US-based packaging and testing company, predicting Amkor will become a winner in the CoWoS (Co-Waste Semiconductor Onboarding) field. This drove Amkor's stock price up by over 10%, reaching a new high in over 25 years (since June 2000).
According to MoneyDJ XQ Global Winner system quotes, Amkor surged 12.14% on January 5th, closing at $48.13, a new closing high since June 2000; Amkor's stock price is projected to surge 53.68% by 2025.
Kabutan reported on the 6th that analysts raised their target price for Amkor from $37 to $50 and reiterated their "buy" rating. Analysts pointed out that Amkor will become a clear winner in the advanced CoWoS packaging field over the next five years.
The report indicated that to meet the demand from TSMC in Taiwan, Amkor is expected to build a CoWoS production capacity of approximately 50,000 wafers per month over the next five years. If this capacity reaches full capacity, it will significantly contribute to Amkor's revenue.
Key sales drivers of Amkor
The semiconductor industry is undoubtedly Amkor's primary sales driver, accounting for 34.57%. This is no coincidence, as Amkor has positioned itself as an advanced packaging supplier and collaborates with Nvidia, a global leader in artificial intelligence infrastructure. Nvidia is estimated to control approximately 60% of global CoWoS demand. The recent successful example of the first Blackwell wafer being manufactured in the US is a testament to the ongoing US push for the return of the semiconductor supply chain. The only remaining issue is packaging, in which the US still relies on Taiwan.
Looking ahead, Amkor's $7 billion Peoria, Arizona plant is preparing for advanced packaging technologies beyond Blackwell chips. To this end, Amkor will receive $407 million in incentive funding under the US Chip and Science Act to encourage its relocation of operations back to the US. The company plans to complete Phase 1 construction by mid-2027 and achieve mass production in early 2028. This demonstrates that Amkor is well-positioned to directly benefit from packaging services as the semiconductor market grows.
It should be noted that this is a long-term optimistic outlook. A short-term catalyst is expected to arrive in 2026, when the US is anticipated to begin mass production of advanced packaged chips, with the H200 chip being a key driver of short-term growth. Amkor will benefit from increased chip demand.
As Amkor's market share in advanced packaging is comparable to Intel's, the potential for more orders from Nvidia will lay a solid foundation for higher revenue for Amkor in 2026. In fact, Intel is collaborating with Amkor, outsourcing its EMIB packaging business to them. Intel hopes to increase capacity through this, which will further boost Amkor's revenue.
AMKR's revenue growth momentum is weak
AMKR's revenue growth has been weak over the past three years, declining from 15.5% year-over-year growth in 2022 to -8.3% in 2023 and -2.9% in 2024. This was primarily due to the cyclical downturn in the mainstream semiconductor market. However, driven by the development of artificial intelligence (AI), the semiconductor industry has experienced rapid growth, with year-over-year revenue growth rebounding from -8.3% in 2023 to 0.14% in 2025. The rebound in year-over-year revenue growth in 2025 indicates that the booming development of AI is expected to drive revenue growth. Therefore, total revenue for fiscal year 2025 is projected to reach $6.65 billion, representing a year-over-year increase of 5.31%. As mentioned earlier, the transformation and upgrading of the semiconductor industry since fiscal year 2023 has also driven sustained revenue growth.
The company's revenue has exceeded expectations in the past four quarters, with a 20.75% exceedance in the third quarter of 2025, demonstrating its strong execution. The company expects revenue for the fourth quarter of 2025 to be between $1.775 billion and $1.875 billion. Analysts, using a median forecast of $1.825 billion, project revenue of $1.8 billion, in line with the company's expectations. Given the strong revenue performance in fiscal year 2025, the likelihood of the company exceeding revenue expectations in 2025 has increased, as the revenue growth potential for the fourth quarter of 2025 is approximately 12.96%.
As mentioned earlier, fundamentals indicate that 2026 will be a year full of opportunities, primarily due to potential additional orders from Nvidia. Therefore, 2026 revenue is projected to reach $7.27 billion, representing a year-over-year increase of 9.29%.
In terms of profitability, the company currently has a negative net profit growth of 15.89%, which is understandable given its aggressive investment in its $7 billion factory in Arizona, aiming to advance the localization of the semiconductor supply chain in the United States by securing a foothold in advanced packaging. Let's also look at the revenue contraction between 2022 and 2025. This explains why the company's earnings per share are projected to grow to $1.70 in 2026, up from $1.24 in the past 12 months (a 16.2% year-over-year decrease) (a 36.66% year-over-year increase).
Source: Compiled from moneyDJ
