Right. Welcome. Sorry to re-read this so many times, but, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com. slash Research Disclosures. If you have any questions, please reach out to your sales rep. So, with that, I'm Joe Moore, Morgan Stanley Semiconductor Research. Very happy to have with me today from Amkor, Kevin Engel, Chief Operating Officer. All right. Good morning, everybody. Thank you, so let me just jump right into questions. I mean, your historical seasonality has been about 45% of revenue in the first half, 55% in the second half. At the latest earnings call, you talked about a little bit more of a second-half skew. Can you just talk to the trends that are driving that view? Yeah. So a couple of things going on there. So first, you know, we would look back to what we have talked about in some of the other earnings calls. We had a socket loss for the iOS ecosystem. We can talk more about that later. But that definitely is giving us a muted first half. And as we go into the second half and start to recover that socket for the next generation, as well as hopefully some help from other markets, which we can talk about, that'll definitely give us a higher seasonality for that second half. Okay. What are major customers telling you about their order outlooks for this year, and just maybe give us a contrast with what we've seen the last couple of years? Yeah. So I think if we go by market, so if we think about communications market as an example, I'd say that feels about normal, so no major deltas there. When we think about the compute market, again, you know, obviously with AI, still a lot of bullishness there, you know, so compute along with PCs, a little bit of, you know, moderated strength. So I think the compute market feels a little bit better than the last several years. When we think about automotive, that's really, kind of a two different segments we think about there. We think about the more advanced type applications, which are the ADAS and safety functionality, a little more strength in that market. Whereas when we think about the more mainstream project products like MCUs, that type of application space, still a story of inventory correction and when that's going to get consumed. So I think that's an area that automotive in general, we see flattish. And then we think about the consumer market. Obviously, that's, you know, pretty heavily dependent on what the consumer does from a purchasing perspective. But again, that feels about normal from what we've seen for the past couple of years. Okay. Helpful. And then, you know, probably the most asked question we got after your earnings is also probably the most difficult for you to speak to directly. But, you know, you mentioned the socket loss in the Apple ecosystem or iOS ecosystem. You know, how do you think about that in terms of what milestones should we look at to determine your progress around that and just any help you can give us to sort of navigate what you're seeing there? Yeah. So I think there's a few pieces. I mean, if you look at the cell phone, kind of heartbeat or the cycle there, you know, every year you're going back through next-generation products, in some cases new packages, in some cases reusing existing packages. But you have to rebid and continue to stay hungry for each generation of product. If we look at this scenario, a little bit different in that the customer was migrating to a different architecture. And we worked with them basically to talk about Amkor being involved in the next-generation architecture to make sure we had a long pipeline there. And that left us out of the current generation. So, in general, we feel very well-positioned with that customer. If we look actually at our 2023- 2024 revenue, even with that socket loss, we grew with that customer. So, you know, we still feel pretty good about it. Okay. All right. That's helpful. Thank you. You've also talked about a new wearables project that you started ramping last year. Can you give us a sense for the durability of that growth? Yeah. So, you know, they're just like every new product launch. There's cycles there. There's the build-up and then the, you know, how much of the sell-through there is. So we still see that as, you know, looking pretty strong going into this year. And then the consumer market in general we're projecting, you know, kind of low single-digit, you know, growth trajectories. And I think it's important to just highlight that that Amkor in general plays more in that premium-tier wearable space where we can differentiate a little bit more. Okay. Helpful. Thank you. Maybe looking at some of the markets that you talked about, starting with compute, can you kind of clarify your comments on compute growth, you know, ticking down a little bit this last earnings, how much your compute business, how much that was related to China and just in general sense? Yeah. So a couple of dynamics there. So one, again, was the China dynamic. We had a couple of products that we were working with customers to launch. And as we started seeing some of the new restrictions that came in place towards the end of the year, that put the dynamic with the customers where they put some of those projects on hold or canceled. So that created a dynamic to where some of these ramping products slowed down. The other aspect was the, you know, next-generation GPU that we were working on. The transition into that next generation was faster than we or the customer had anticipated. So the current generation, we saw that muted. Still have some legs going into this year, but definitely muted compared to what we were anticipating. If we look forward, you know, we definitely see our strong pipeline for additional products ramping, some of those going into the next-generation technology. If we look at the GPU today that we're working on, that's a 2.5D type technology or similar to CoWoS-S. If we move forward into some of these products that we're launching, they're more RDL, organic RDL type products. So those are exciting for us because that's our first launch of that new type of technology. Great. And I know, you know, again, probably hard for you to be overly precise about the AI GPU part of the business, and the advanced packaging there that kind of was like the product. But can you just give us a general sense for how important that is for multiple-year growth prospects for Amkor? Yeah. So I, you know, when we think about AI in general, you know, it was very important for the growth. And I think there's a lot of legs left there. You know, when we think about AI and data center in general, not just GPUs, you know, we're talking CPUs, XPUs, switches, retimers. So that whole segment for us is going to continue to grow. Yeah. Okay. And then I guess, can you talk about your top couple of customers in this space and maybe, you know, with your primary customer, you know, can you talk about prospects for future platforms and then, you know, maybe give us an indication of how big, you know, the second customer's growth? Yeah. So I'll let me think about it from the perspective of, you know, when we talk to that primary customer that everybody's interested in, we're looking at their total product roadmap and where we participate. And we feel, again, across multiple segments, not just the GPU market. I think we feel very good about our pipeline with that customer specifically. When we think about the other customers, again, we look at roadmaps. And these are, you know, from IDMs to fabless companies to OEMs. And the roadmap for all these customers is pointing towards more advanced packaging in the future. So we definitely feel very well-positioned in that space. Yeah. And I guess a lot of those advanced packaging technologies now, when you talk about, you know, CoWoS-like product or, you know, those kind of chip stacks, it takes you into a little bit of a different domain than you've been in. You know, do you compete with TSMC? Do you help TSMC? Like, how should we think about that as a competitive dynamic? You know, I think of your competitive set usually being other OSATs. Yeah. So yeah, I think there's a few dynamics there. Obviously, we've had several press releases with them related to some technology alignment as well as partnerships in our U.S. manufacturing. So in general, we definitely view them as a partner and a strategic partner, you know, from that perspective. When we think about the technology space, you know, obviously, we're continuing to upscale our technologies. We view TSMC as the technology leader. And we're a fast follower. I think we've seen that with, the CoWoS-S type technologies, our 2.5D. Now we're seeing that with their CoWoS-R, which is similar to our SWIFT technology. And then going into the future, the silicon bridges. So yeah, so I think we feel pretty good about that positioning. Yeah. Okay. Automotive, you talked about kind of a mixed environment. We just had NXP here, talking about kind of a lack of visibility. That's generally the sense. It's maybe, not approaching the worst point, but maybe not visibility on when it recovers. You know, can you talk to that? And can you talk to the business mix that you have your visibility into that? Yeah. So I think that's similar to what we see. If we talk to that customer base and, you know, the customer base is very broad, I'd say the same thing. We think about the mainstream type packages, MCUs, you know, more legacy type devices. Definitely still a story of inventory. You know, what's, when is that inventory going to get burned off? You know, obviously, for us as a service company, first the customer has to burn off the inventory and then start rebuilding again. So that visibility is still unclear. When we think about the more advanced packages, definitely a slightly different dynamic. I mean, we did see a slight drop coming into Q1, but at least that segment we see, you know, a little more legs to the growth going into the year. Okay. And at the latest earnings call, you mentioned a split of your Automotive business, roughly 60% ADAS, 40% infotainment, I believe. Can you talk to the growth rates of those two businesses and the prospects that you have? I think that was 60% advanced and 40% mainstream or. Okay. Vice versa. So not just ADAS, you know. Okay. Again, when we think about that Advanced segment, that's ADAS plus, infotainment, you know, connected car, digitization, that type of application. And then again, the mainstream would be more the MCU market. So, you know, if we look forward, we do anticipate that Advanced segment will continue to grow at a faster rate than the mainstream business. Yeah, and can you talk about the advanced package types that are being sold? So again, I think you have to look. One thing I always try to explain a little bit is when the industry talks about advanced packaging now, it's kind of been skewed a little bit towards TSMC advanced packaging and the CoWoS-type technologies. Traditionally, Amkor has always talked about advanced packaging as, you know, flip chip, you know, flip chip CSP, flip chip BGA, other type products along with these applications that TSMC is talking about. So we look in that connected car space. It's things like, flip chip BGA, MCMs, flip chip CSP, a little bit of SIP, those types of package types. Okay. Helpful. So I guess thinking about CapEx and maybe the strategy there, we're sort of moving from an environment where and I don't want to get too political, but we're moving from a subsidy environment to more of like tariff-concerned kind of environment. But it seems like the goal is still the same, that stuff, you know, there's a desire to have things manufactured in the region where it's being consumed in the U.S. You guys are investing in Arizona, which I have kind of not thought of. The U.S. is being, you know, necessarily the cost structure that you look for in kind of packaging. But, you know, can you talk about the thought behind that facility, the benefits that you guys see from it, and maybe in navigating uncertainty in the political environment, still seems like a pretty big benefit to have that capacity here? Yeah. I mean, so in from a general perspective, you know, if we look at the supply chain and the logistics, so, you know, if there's more front-end fabs here, there needs to be more packaging in the U.S. as well. So I think that's the first baseline. Obviously, the cost here, you know, between labor and other things is elevated. So that's obviously something we're working very closely with. You can imagine customers don't want to pay more. You know, in some cases, maybe there's a little bit of opportunity there, but you're trying to balance a cost structure versus logistics and then a supply chain concern. So if we look at the way that, that's transforming how do we manage that cost delta? Subsidies help. You know, that can be the one way. Obviously, tariffs can basically do the same thing. So I think either one of those mechanisms can help level set some of that. We're focused on, obviously, a lot of automation. You know, that helps to manage the labor cost as well. And then the other aspect would be to look at how we can load the factory to high utilization consistently. You know, we already talked a little bit about our seasonality, first half versus second half. Yeah. If we're able to have a consistent high utilization, that also helps the cost structure. So I think in general, that along with, again, you know, the recent announcement from TSMC to go even bigger in the U.S., you know, obviously other fabs in the U.S. So we have, you know, we feel there's enough of a scale from a front-end fab perspective to drive that packaging in the U.S. When you said customers don't want to pay more, which I guess on the one hand is obvious, but, you know, is there a trade-off between wanting supply chain certainty, wanting things to be manufactured in a region where at an OEM level the customers feel comfortable? Is there a willingness to pay for that or is there just a? I'd say yes. I mean, it's always a put and take, right? Yeah. And what I'm, you know, a lot of customers will look at that as a blended cost. You know, what percentage do you do in the U.S.? Yeah. You know, the higher price and how they blend that and what's the right ratio based on, you know, what their end customers can afford. Yeah. I think that dynamic will continue to shape up. Okay. And it's still a pretty exciting announcement, but still a pretty small part of your CapEx. I think you guided for CapEx of $850 million this year, of which you said 5%-10% is going to that facility. Can you talk about what that looks like going forward? Is the capital density going up an issue? Yeah. So first, let's level set that our normal capital intensity is in the low teens. You know, so I think that's, you know, kind of the benchmark. And then if we look at ramping up and building our Vietnam facility, we're able to maintain that low teens capital intensity. So for the U.S., you're right. So this year, relatively light, 5%-10% of that 850, you know, that's breaking ground, doing some other things. If we look into 2026 and 2027, you know, that spend will go up. Depending on what the overall market does, you know, if we, look to 2026 as a growth year in general or a recovery year that can be a dynamic to where it could push our capital intensity a little bit higher going into 2026 and 2027. Okay. All right. And you mentioned Vietnam. You're up and running there now, can you give us a sense for where you are in that ramp and how much revenue you can ultimately support out of that facility? Yeah. So it's a big facility. I mean, we have one module of four completed. And now we're filling that, you know, as we ramp capacity there. So we're ramping our memory devices as well as some SIP products. So that ramp is going very, very, very well. The yields are, you know, reaching or exceeding our Korea facility. So I think we feel very good about that progress. You know, if we think from a scale perspective, again over time, it will be one of our largest facilities, you know, from a footprint perspective and full build-out. So yeah, a lot of revenue growth potential there in the future. Yeah. Okay. Great. Test, can you talk about, you know, your test business? How are you thinking about tester purchases in 2025? And it seems like there's some availability issues with certain testers. Can you talk generally to the prospects you have around this? Yeah. I mean, lead times are always something we watch and not just with testers, but with other assets depending on, you know, the market dynamics. So I think, you know, that's one checkbox. When we look at the test business in general, there's a few things that we try to do. We're very focused on our turnkey flow. So if we're doing, as an example, assembly but no test, we're constantly looking at how do we bring value to the customer either through logistics or reutilization of existing assets or other ways. You know, if, you know, same thing if we have just a bumping product, but we want to go after probes. So we're really trying to make sure we capture much of that value for every product that's out there. Then when we look at that investment there's a good bit of investment in the test area. If we look at that $850 of capital intensity or capital spend this year, about 70% of that is for assets, you know, for equipment. And if we look at that equipment, the three areas that are the primary spend are for advanced packaging, SIP for specific devices, and then test would be third. So it's definitely a significant area of investment. And that's mostly related to some of the next-generation platforms, you know, with the key two suppliers there. Okay. Helpful, maybe talk to the financials a little bit. Your gross margin in the second half was a little lighter than what people were expecting. You had material content on the SIP, underutilization in Vietnam. Can you just walk us through the puts and takes there? And, you know, you've sort of talked about getting back to 20% gross margin at some point. Yeah. You know, what does it take to get to that? Okay. Yeah. So I think first, it's important to point out that for 2024, our margins were slightly better than 2023. And there's a couple of puts and takes related to that. Obviously, cost optimization is a key area, and making sure we're controlling the cost structure. The other puts and takes are related to we had some FX tailwinds as well as you're probably all aware, we had a modification of our depreciation cycle. Which also was a tailwind. And that helped to offset some of the ramp costs related to Vietnam. So I think we feel pretty good about that. Obviously, with the first half being muted, as we talked about, but we expect for the full year to be flat to slightly up. So that means our second half will be much stronger, as we mentioned earlier. So if we look at the second half compared to, you know, some of our previous quarters, as an example, like Q3, Q4, 2022, those were high revenue, high utilization quarters where we were up in that, you know, high teens, type margin levels. And I think what we can model is that for the second half of the year, we're anticipating those types of margin levels. Okay. Can you talk about the business mix? And I think you've mentioned some of the legacy businesses can actually have higher gross margin at times. Just, how do we think about business mix as impacting that? Yeah. I think in general, we just think about that as it's all utilization. You know, we have, you know, if we look at that automotive space, as an example, we have some factories that are very heavily concentrated in automotive. Today, they're very underutilized, you know. And as that business comes back, you know, that will definitely help the margin in general. You know, across any market or any business, there's different margins here and there. But in general, if we're able to fill those assets, that really benefits us. Yeah, and I know, I mean, you guys have made big investments into advanced packaging and the differentiation that that gives you. You know, what are those negotiations like? Are you able to, you know, you think extract more gross margin over time from that is from the fact that you have more capability that maybe is a little bit more differentiated? Yeah. I mean, I think there's a few dynamics there. Number one, the capital intensity is higher. So, you know, you really need to look at that from a margin perspective. But in general, you're starting to whittle down the supply chain options. You know, when you think about the tier one OSAT space, there's really only a couple companies, maybe three, that can offer these types of advanced packages. So yes, you can, you know, get some benefit out of that. So I think that's a key driver is what that space looks like compared to when you're, you know, dealing with tier two, tier three supply chains with a lot more optionality. Yeah. Okay. Let me stop and see if we have questions from the audience. Just wanted to ask about Silicon Photonics, Co-Packaged Optics, just from like a customer roadmap perspective, just at a high level, what you're seeing there. Yeah. So a few things. I'd say, you know, pluggables are already out there. You know, so I think we're working with the pluggable market. When we think about CPO, still a relatively fragmented type market with a lot of different offerings, a lot of different package structures. So, we'll see how that consolidates over time. But I'd say it's definitely an area that we see a lot of interest from our customers. You know, we're looking at how we can support that, you know, overall different package structure. And to me, it's a matter of timing. You know, we've been talking about CPO for a long time. I think we're between the power and the data center and other things, you know. I think there's definitely, that's an area that will grow pretty soon. It seems like this AI is an accelerant to all these things that we've been talking about for a long time, but it's coming. Yeah. It seems like it's coming much faster. I mean, to me, it's power and electricity in general across everything is a key driver. Yeah. Makes sense. We had a question for him. Can you talk about your opportunity for HBM and memory? What are the, kind of easy aspects of, kind of getting into this space and what are the challenges that you face for that? Yeah. So for memory in general, we participate in NAND and some other areas. For HBM, obviously, we're taking packaged HBM and putting them into packages. You know, at this point, we continue to evaluate whether or not it makes sense to go into actual, you know, NAND or go into the HBM space working with some of the suppliers and their customers in that dynamic. But I think that's still a ways out for Amkor. Hi. Thanks. I guess similar question, but maybe stepping back to your Arizona facility. I think in the past you said it's a partnership potentially with TSMC. Now, recently, they announced two of their own advanced packaging facilities. So how do you see that dynamic play out? A couple things. Number one, this facility was never envisioned to be captive to TSMC and/or Apple. We had press releases with both. Definitely, you know, important key customers. When we look at TSMC's trajectory, obviously, as part of the CHIPS Act, they talked about three facilities: first facility done, second facility wrapping up. That'll progress forward. The recent announcement was another three, you know, front-end fabs. Six fabs is a tremendous amount of scale. You know, so for us, we view that as just continues to show that front-end capability and back-end capability in the U.S. needs to grow significantly. So their announcement, you know, doesn't change our direction today at all. I get that, and then I guess a follow-up. Sorry. Yeah. So in terms of their type of packages, you said there's a bit of a differentiator between what OSAT business used to be, advanced packaging, and what they put in the market. And I think the pushback has been that, you know, scale is important for OSAT to be able to drive the business, to get the margins. Yeah. So is that changing now? You're thinking about, for example, upgrading your cleaning facilities. Hybrid bonding is a term that they'll often use. Is that something that is becoming interesting now because of these huge investments? I mean, again, I mean, I think your comment on scale is right. You know, the application spaces for the most advanced, the volume levels are typically relatively low. And they're obviously more expensive. You know, so I think what will happen over time with, you know, things like hybrid bonding, CoWoS, those types of packages is as they proliferate into the broader market, broader customer base, then that's an area for the OSATs to get into those markets and participate. Oh, good. I'll I'll wrap it up there. Thank you so much. Okay. All right. Thank you, everybody. Thank you for coming. Thanks.