Company: AMKR
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001047127-25-000030
Chunk: 74

Company: AMKOR TECHNOLOGY, INC.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 7
Chunk 74
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,153 $1,329,987 $(9,941)$(386,834)Gross margin14.8 %14.5 %18.8 %0.3 %(4.3)%

Our cost of sales consists principally of materials, labor, depreciation and manufacturing overhead.  Since a substantial portion of the costs at our factories is fixed, there tends to be a strong relationship between our revenue levels and gross margin.  Accordingly, relatively modest increases or decreases in revenue can have a significant effect on margin and on labor and other manufacturing costs as a percentage of revenue, depending on product mix, utilization, foreign currency exchange rate movements and seasonality.  We have expanded our business in advanced packaging, which tends to have higher material costs than our other products.  As we continue to increase production of these higher material cost products, there could be an impact on our profitability, depending on overall utilization.

While gross profit decreased for 2024 compared to 2023, gross margin increased primarily due to the extension of the estimated useful life of our test equipment from five years to seven years and net favorable foreign currency exchange rate movements, offset by the decrease in net sales and resulting lower factory utilization.

39

Selling, General and Administrative

Change2024202320222024 over 20232023 over 2022(In thousands, except percentages)Selling, general and administrative$331,806 $295,393 $283,372 $36,413 12.3 %$12,021 4.2 %

Selling, general and administrative expenses increased in 2024 compared to 2023.  The increase was primarily due to increased employee compensation costs and costs incurred during start-up at the Vietnam Facility, partially offset by a reduction in bad debt expense.  In 2024, the costs incurred during start-up at the Vietnam Facility increased approximately $16 million compared to 2023.

Research and Development

Change2024202320222024 over 20232023 over 2022(In thousands, except percentages)Research and development$162,951 $177,473 $149,429 $(14,522)(8.2)%$28,044 18.8 %

Research and development activities are focused on developing new packaging and test services and improving the efficiency and capabilities of our existing production processes.  The costs related to our technology and product development projects are included in research and development expense until the project moves into production.  Once