Amkor Stock Under Pressure: Analyst Cuts Rating Due To Trade Policy Concerns, Slowing End Market Growth

On Thursday, Keybanc analyst Steve Barger downgraded Amkor Technology (NASDAQ:AMKR) from Overweight to Sector Weight.

The rerating reflects reduced visibility into demand for mobile phones, automobiles, and consumer products, which stems from fluctuating trade policy.

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Barger noted that it could exacerbate the expected gross margin pressure in the first half of 2025 due to a temporary socket loss in its Mobile end market and expressed concern about Amkor’s inherently lower-visibility but relatively high-capex business model.

The analyst noted that shares will likely remain under pressure until major end markets like Automotive and Mobile show signs of stabilization and growth.

Amkor automotive sales generally track the major automotive semiconductor companies, and while consensus estimates indicate a return to growth in the second half of 2025, Barger noted that company commentary combined with volatile global trade rhetoric suggests a cautious approach to shares in the near term.

In a broader upcycle scenario, the analyst noted Amkor should exhibit substantial operating leverage on higher factory utilization, but that will require recovery and growth across high-volume end markets for that to happen.

As one of a handful of outsourced manufacturing companies able to process 2.5D advanced packages with acceptable yield and throughput, Barger noted Amkor will continue to focus on high-performance computing as a margin-accretive and higher-growth vector.

The analyst noted volumes are still too small to drive consolidated company outperformance, absent participation from traditional end markets. Amkor could remain a “second choice” for leading-edge chip companies behind the technology leader, Taiwan Semiconductor Manufacturing Co (NYSE:TSM).

Barger lowered his estimates to reflect heightened uncertainty in global trade and end demand. The analyst’s 2025 estimate goes to $1.40 from $1.48 (consensus $1.41), reflecting a -2% growth rate at a 6% decremental margin. His 2026 estimate goes to $1.91 from $2.04 (consensus $1.96), reflecting 9% growth on a 34% incremental margin.

Given the recent share price action, Barger acknowledged that his downgrade was reactive. Still, when he noted the market position and the potential impact of reduced demand across mobile phones, autos, and other consumer products, he had less confidence in predicting near-term outcomes for Amkor than for some other names he covered.

For now, Barger noted that the demand for AI-related devices and investments in leading-edge roadmaps should remain resilient, and he is more positive about names exposed to upgrade cycles or where channel inventory has been reduced, like memory. Looking forward, when this macro angst passes and improving cycle dynamics become more apparent, the analyst could be quick to reverse course, but for now, he noted more positive outlooks for Overweight-rated Applied Materials, Inc (NASDAQ:AMAT), Lam Research Corp (NASDAQ:LRCX), Advanced Energy Industries, Inc (NASDAQ:AEIS) and MKS Instruments, Inc (NASDAQ:MKSI).

Price Action: AMKR stock is down 0.33% at $16.10 at last check Thursday.

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