Amkor’s AMKR 0.00%↑ recent weakness post 2Q26 was largely due to weakness in its smartphone market as memory prices affect demand, alongside delays in its SiP qualifications.
That said, the AI story of Amkor is actually strengthening.
Amkor is winning in the server CPU market with Nvidia Vera CPUs ramping and AMD ramping in the 2028 timeline.
Advanced packaging is increasingly becoming an important and fast-growing portion of its business, and this high-value business is helping drive strong margin gains.
While the market sees Amkor as an AI play, it is important to note that 42% of 2Q26 revenues came from the communications end market, which includes smartphones and tablets, while only 22% of revenues came from the computing end market, which includes the data center end market.
In fact, the computing end market currently has the same sales mix as the automotive, industrial and other market.
Due to strong demand for data center applications, the computing end market saw revenue increase 20% sequentially in 2Q26.
Automotive and Industrial and consumer end markets both grew strongly, with revenues up 17% and 15% sequentially as ADAS demand was strong and there was broad-based IoT demand across customers.
The Communications market was weakest in 2Q26, up 6% sequentially.
Within the communications market, growth was driven by double-digit growth in the iOS ecosystem, while Android revenue was down 20% due to the impact of memory supply dynamics.
Communications revenue is expected to deviate from typical seasonal patterns and decline in the high-single-digits sequentially in 3Q26.
The weakness in Communications revenue is due to 3 key factors.
These 3 key factors are the delay in Amkor’s strategic initiative to move SiP to Vietnam to support the communications end market, the constraints in memory supply and high memory prices affecting demand, and build pattern changes.
The strategic initiative to move SiP from South Kora to Vietnam will enable Amkor to free up space to scale its high-value advanced products.
The lighter 3Q26 communications revenue was attributed to 50% from SiP delay qualifications, 35% from slower Android and 15% slower iOS due to memory.
On the other hand, computing growth is expected to accelerate to almost 30% sequential growth in 3Q26, due to strong AI data center demand and ramping of Nvidia’s Vera CPU.
Advanced packaging is Amkor’s most important driver of growth given how important it is for next-generation AI semiconductors as packaging complexity increases.
With that in mind, the company recently signed 2 significant partnership agreements that support growth in this area.
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