They quadrupled 2.5D revenue in 2024 and just guided Q1 gross margins to a distressed 10-13%.
Thesis: Amkor is a capital-intensive service bureau trapped between TSMC's pricing power and Apple's cost controls. The 'AI' growth story is a margin-dilutive illusion. Material content rising to 55% has permanently impaired their operating leverage, forcing them to spend $850M in CapEx just to tread water. This isn't a cyclical trough. It's a structural squeeze.
Verdict: AVOID — Conviction: MEDIUM
Catalyst: Q3 iOS socket regain. If they miss or delay, the back-half recovery thesis collapses.
Key Risk: Apple effectively forces the socket regain to maintain dual-source leverage against competitors, bailing out the revenue line.
The Tell: CFO Megan Faust admitted the financial model has degraded. Incremental flow-through dropped from 40-50% to 30-40% because material content rose to 55%. They are becoming a pass-through entity.
Friction Level: MODERATE_FRICTION — The Street buys the 'trough' narrative and Q3 recovery. We see structural margin degradation that volume won't fix.
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