Company: AMKR
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001047127-25-000030
Chunk: 2

Company: AMKOR TECHNOLOGY, INC.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1
Chunk 2
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 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. 

Outsourcing Trends in Semiconductor Manufacturing

Semiconductor companies outsource their packaging and test needs to service providers such as Amkor for the following reasons:

Packaging and test service providers have developed expertise in advanced technologies.

The increasing demands for miniaturization, greater functionality, lower power consumption and improved thermal and electrical performance are driving the continuous development of semiconductor packaging and test technologies that are more sophisticated, complex, capital intensive and customized.  This trend has led many semiconductor companies and OEMs to view packaging and test as enabling technologies that can benefit from the technological innovation expertise found in the leading outsourced assembly and test companies.  At the same time, these companies are often looking to reduce their internal manufacturing and research and development costs for packaging and test solutions.  As a result, many of these companies are increasingly relying on packaging and test service providers as key sources for new package designs and advanced interconnect technologies.  

Packaging and test service providers can facilitate a more efficient supply chain and help shorten time-to-market for new products.

We believe that semiconductor companies, together with their customers, are seeking to shorten the time-to-market for new products and that an efficient supply chain is a critical factor in facilitating timely and successful product introductions.  Packaging and test service providers have the resources and expertise to timely develop and implement new packaging technology in high volume.  For this reason, semiconductor companies and OEMs are leveraging the capabilities of outsourced packaging and test service providers to bring new high quality products to market more quickly.

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High quality packaging and test service providers enable semiconductor manufacturers to focus their resources on semiconductor design and wafer fabrication.

As semiconductor process technology migrates to larger wafers and smaller feature sizes, the cost of building a state-of-the-art wafer fabrication factory has risen significantly.  The high cost of investing in next generation silicon technology and equipment is causing many semiconductor companies to adopt or maintain a “fabless” or “fab-lite” strategy to reduce or eliminate their investment in wafer fabrication and associated packaging and test operations.  As a result, these companies are increasing their reliance on outsourced providers of semiconductor manufacturing services, including high quality packaging and test solutions.

Packaging and test service providers offer a cost-effective solution in a cyclical, capital intensive industry.

The semiconductor industry is