Company: AMKR
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001047127-25-000168
Chunk: 234

Company: AMKOR TECHNOLOGY, INC.
Filing Date: 2025-07-29
Form: 10-Q
Item: Part I, Item 2
Chunk 234
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 services are substantially dependent upon our customers’ demand in that quarter.  Generally, our customers do not commit to purchase any significant amount of packaging or test services or provide us with binding forecasts of demand for packaging and test services for any future period, in any material amount.  In addition, we sometimes experience double booking by customers, and our customers often reduce, cancel or delay their purchases of packaging and test services for a variety of reasons, including industry-wide, customer-specific and Amkor-specific reasons.  This makes it difficult for us to forecast our capacity utilization and net sales in future periods.  Since a large portion of our costs is fixed and our expense levels are based in part on our expectations of future sales, we may not be able to adjust costs in a timely manner to compensate for any sales shortfall.  If we are unable to adjust costs in a timely manner, our margins, operating results, financial condition and cash flows could be materially and adversely affected.

Historically, there has been downward pressure on the prices of our packaging and test services.

Prices for packaging and test services have generally declined over time, and sometimes prices can change significantly in relatively short periods of time.  We expect downward pressure on average selling prices for our packaging and test services to continue in the future, and this pressure may intensify during downturns in business.  If we experience declining average selling prices and are unable to offset such declines by developing and marketing new packages with higher prices, reducing our purchasing costs, recovering more of our material cost increases from our customers and reducing our manufacturing costs, our business, liquidity, results of operations, financial condition and cash flows could be materially and adversely affected.

Packaging and test processes are complex, and our production yields and customer relationships may suffer from defects in the services we provide or if we do not successfully implement new technologies. 

Semiconductor packaging and test services are complex processes that require significant technological and process expertise, and in line with industry practice, customers usually require us to pass a lengthy and rigorous qualification process that may take several months.  Once qualified and in production, defective packages primarily result from one or more of the following:

•contaminants in the manufacturing environment;

•human error;

•equipment malfunction;

•changing processes to address environmental requirements;

•defective raw materials; or

•defective plating services.

Test is also complex and involves sophisticated equipment and software.  Similar to many software programs, these software programs are complex and may contain programming errors or “bugs.”  The test equipment is also subject