Company: AMKR
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001047127-25-000087
Chunk: 206

Company: AMKOR TECHNOLOGY, INC.
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 2
Chunk 206
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 Similarly, our sales, cost of sales and operating expenses will decrease if the U.S. dollar strengthens against these foreign currencies.  We performed a sensitivity analysis of our foreign currency exposure as of March 31, 2025 to assess the potential impact of fluctuations in exchange rates for all foreign denominated sales and operating expenses.  Assuming that all foreign currencies appreciated 10% against the U.S. dollar, our operating income for the three months ended March 31, 2025 would have been approximately $36 million lower.

There are inherent limitations in the sensitivity analysis presented, primarily the assumption that foreign exchange rate movements across multiple jurisdictions would change instantaneously in an equal fashion.  As a result, the analysis is unable to reflect the potential effects of more complex market or other changes that could arise which may positively or negatively affect our results of operations.

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Our Consolidated Financial Statements are impacted by changes in exchange rates at the entity where the local currency is the functional currency.  To mitigate this impact, we started to hedge certain net investment positions in foreign subsidiaries by entering into foreign currency forward contracts that are designated as hedges of net investments beginning in April 2024.  The effect of foreign exchange rate translation for these entities, inclusive of our foreign currency forward contracts, was a gain of $3.9 million for the three months ended March 31, 2025 and a loss of $9.0 million for the three months ended March 31, 2024, respectively, and was recognized as an adjustment to equity through other comprehensive income (loss). 

Interest Rate Risk 

We have interest rate risk with respect to our available-for-sale debt investments.  Our investment portfolio consists of various security types and maturities, with our portfolio primarily having maturities of one year or less.  Our primary objective with our investment portfolio is to invest available cash while preserving capital and meeting liquidity needs.  These securities are subject to interest rate risk and will decrease in value if market interest rates increase.  Due to the relatively short-term nature of our investment portfolio, we believe that an immediate increase in interest rates will not have a material impact on the fair value of our available-for-sale debt investments.  For information regarding our available-for-sale debt investments, see Note 7 to our Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

In addition, we have interest rate risk with respect to our debt.  Our fixed and variable rate debt includes foreign borrowings, revolving credit facilities