In December, Amkor increased its ownership in J-Devices Corporation from 66% to 100% through the exercise of existing options. J-Devices was formed in 2009 as a joint venture to acquire the assembly and test operations of Toshiba. Since that time, it has experienced considerable growth through a number of acquisitions involving other large semiconductor companies in Japan. J-Devices is now the largest outsourced semiconductor assembly and test (OSAT) provider in Japan and the sixth largest in the world. Using the latest wire bond assembly and test technologies, J-Devices specializes in producing high quality and reliable semiconductor packages for the exacting standards of the automotive end market.
“The purchase of the remaining interest in J-Devices has been part of our long term strategic plan to strengthen our relationships with the key semiconductor companies in Japan and enhance our position in the rapidly growing automotive market,” continued Kelley. “As a result, Amkor is now the world’s largest OSAT provider for automotive ICs, with around $750 million in combined automotive application revenue. We believe that consolidating J-Devices with Amkor will facilitate the acceleration of synergies and cost savings across the organization.”
Amkor has invested an aggregate of $202 million since 2009 to acquire its 100% interest in J-Devices, and this investment has generated $84 million of equity in earnings for Amkor through December 31, 2015. For the year ended December 31, 2015, J-Devices had revenues of $813 million, EBITDA of $114 million and net income of $30 million. Cash and cash equivalents were $128 million and total debt was $56 million for J-Devices at December 31, 2015. Amkor’s balance sheet at December 31, 2015 reflects the consolidation of J-Devices, and the operating results of J-Devices will be consolidated beginning in 2016. The reconciliation to the comparable GAAP measure for EBITDA is included below under "Selected Operating Data."
Cash and cash equivalents were $523 million, and total debt was $1.6 billion, at December 31, 2015.
Business Outlook
“Market conditions in Q1 remain sluggish, with particular weakness in the high-end smartphone market,” said Kelley. “Despite challenging market conditions, we expect that Q1 revenues will increase 21% sequentially, driven by incremental revenue from J-Devices. At this time, we expect full year 2016 capital expenditures of around $650 million.”
Based upon currently available information, we have the following expectations for the first quarter 2016, which will include J-Devices’ operating results:
- Net sales of $785 million to $835 million, up 17% to 25% from the prior quarter
- Gross margin of 9% to 13%
- Net loss of ($37) million to ($7) million, or ($0.15) to ($0.03) per diluted share
Conference Call Information
Amkor will conduct a conference call on Thursday, February 11, 2016, at 5:00 p.m. Eastern Time. This call may include material information not included in this press release. This call is being webcast and can be accessed at Amkor’s website: www.amkor.com. You may also access the call by dialing 1-877-645-6380 or 1-404-991-3911. A replay of the call will be made available at Amkor’s website or by dialing 1-855-859-2056 or 1-404-537-3406 (conference ID 39845912). The webcast is also being distributed over NASDAQ OMX’s investor distribution network to both institutional and individual investors. Institutional investors can access the call via NASDAQ OMX’s password-protected event management site, Street Events ( www.streetevents.com).
About Amkor
Amkor Technology Inc. is one of the world’s largest providers of semiconductor packaging and test services. Founded in 1968, Amkor pioneered the outsourcing of IC assembly and test and is now a strategic manufacturing partner for more than 250 of the world’s leading semiconductor companies, foundries and electronics OEMs. Amkor’s operational base encompasses more than 7 million square feet of floor space with production facilities, product development centers and sales & support offices located in key electronics manufacturing regions in Asia, Europe and the USA. For more information visit www.amkor.com.
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AMKOR TECHNOLOGY, INC. Selected Operating Data |
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| Q4 2015 | Q3 2015 | Q4 2014 | 2015 | 2014 | |||||||||||||||||||||
| Net Sales Data: | |||||||||||||||||||||||||
| Net sales (in millions): | |||||||||||||||||||||||||
| Advanced products* | $ | 333 | $ | 365 | $ | 462 | $ | 1,433 | $ | 1,553 | |||||||||||||||
| Mainstream products** | 338 | 369 | 391 | 1,452 | 1,576 | ||||||||||||||||||||
| Total net sales | $ | 671 | $ | 734 | $ | 853 | $ | 2,885 | $ | 3,129 | |||||||||||||||
| Packaging services | 85 | % | 85 | % | 85 | % | 85 | % | 85 | % | |||||||||||||||
| Test services | 15 | % | 15 | % | 15 | % | 15 | % | 15 | % | |||||||||||||||
| Net sales from top ten customers | 64 | % | 61 | % | 64 | % | 63 | % | 61 | % | |||||||||||||||
| Packaged units (in millions): | |||||||||||||||||||||||||
| Advanced products* | 1,196 | 1,305 | 1,174 | 4,965 | 3,776 | ||||||||||||||||||||
| Mainstream products** | 2,492 | 2,750 | 3,001 | 10,616 | 13,112 | ||||||||||||||||||||
| Total packaged units | 3,688 | 4,055 | 4,175 | 15,581 | 16,888 | ||||||||||||||||||||
| End Market Distribution Data (an approximation including representative devices and applications based on a sampling of our largest customers): | |||||||||||||||||||||||||
| Communications (smart phones, tablets, handheld devices, wireless LAN) | 54 | % | 55 | % | 60 | % | 55 | % | 56 | % | |||||||||||||||
| Automotive, industrial and other (infotainment, safety, performance, comfort) | 15 | % | 13 | % | 10 | % | 14 | % | 11 | % | |||||||||||||||
| Consumer (television, set top boxes, gaming, portable media, digital cameras) | 12 | % | 12 | % | 11 | % | 12 | % | 13 | % | |||||||||||||||
| Networking (servers, routers, switches) | 11 | % | 12 | % | 10 | % | 11 | % | 11 | % | |||||||||||||||
| Computing (PCs, hard disk drive, printers, peripherals, servers) | 8 | % | 8 | % | 9 | % | 8 | % | 9 | % | |||||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
| Gross Margin Data: | |||||||||||||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
| Cost of sales: | |||||||||||||||||||||||||
| Materials | 35.8 | % | 36.8 | % | 36.0 | % | 36.6 | % | 36.8 | % | |||||||||||||||
| Labor | 15.8 | % | 14.9 | % | 13.2 | % | 15.1 | % | 14.0 | % | |||||||||||||||
| Other manufacturing | 33.1 | % | 31.1 | % | 27.9 | % | 31.7 | % | 29.1 | % | |||||||||||||||
| Litigation settlement | — | % | — | % | 8.8 | % | — | % | 2.4 | % | |||||||||||||||
| Gross margin | 15.3 | % | 17.2 | % | 14.1 | % | 16.6 | % | 17.7 | % | |||||||||||||||
| *Advanced products include flip chip and wafer-level processing and related test services |
| **Mainstream products include wirebond packaging and related test services |
AMKOR TECHNOLOGY, INC.
