Amkor Technology Inc (NASDAQ:AMKR) Q3 2020 Earnings Conference Call - Final Transcript
Oct 26, 2020 • 05:00 pm ET
Thank you. Ladies and gentlemen, at this time, we will be conducting our question-and-answer session. [Operator Instructions] Our first question comes from Randy Abrams with Credit Suisse. Please state your question.
Okay. Yeah. Thank you, and good result, and also encouraging to see the dividend implemented. I wanted to ask the first question about the comment you made on the capex, if you could talk a little more about that 2021 the opportunities you're looking at? And also, it looks like more specific growth over [Phonetic] the past year has been in the advanced packaging. If you're getting to a point of getting tight on capacity into next year, you may have to start accelerating some of the investments. So if you could give an initial view on the, at least, at where it stands now, the capex into next year?
Hi, Randy. This is Giel. Randy, with respect to the capex and the potential increase of 5% going into the fourth quarter, we see a fairly strong pipeline of, specifically, our advanced SiP portfolio in the consumer IoT market, but also in the communication market, and there we work on a couple of programs that may ramp up in the first -- ramp up in the first quarter, and that will drive capex in our fourth quarter. So depending on the exact timing of these programs, there will be a slight increase of about 5% towards the end of the year.
That was at least the first part of the question. What was again the second part of your question?
Okay. Yeah, it was two-part, but it's more of a direction for next year, and it's more factoring the advanced capacity that has been growing quite well. If that's getting to that point, you're getting pretty full and need to start to accelerate some investments.
Yeah, I mean, we expect that the cyclicality of some of the markets will not fundamentally change. So if you look to our first and second quarter, we expect that to be slightly lower than our third and fourth quarter. That's a regular seasonality. So we don't expect a significant capex to be ramping in the first half. However, with some of the phone launches changing their schedule, it may drive some incremental capacity required in the second quarter. So we are open for that, but currently I don't expect and anticipate huge ramp in capacity spending or capital spending in the first two quarters of next year.
Okay. And maybe -- and talking about, I guess, from maybe a rough sense for next year that capital intensity then you're still expecting low teens for the capital intensive at this stage?
Yes, I think that's our target, that's our anticipation that we share. We keep our capex spending at the low-teens, and that's where we're currently budgeting for.
Okay, and I want to ask one more question on the tightness. The -- I'm curious if you're seeing any limitations on things like the high-end ABF