Amkor Technology, Inc. Investor Presentation

Transcription

1 Amkor Technology, Inc. Investor Presentation June 2017 Connecting People and Technology 1

2 Disclaimer Forward-Looking Statement Disclaimer All information and other statements contained in this presentation, other than statements of historical fact, constitute forward-looking statements within the meaning of federal securities laws. These forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could affect our future results and cause actual results and events to differ materially from our historical and expected results and those expressed or implied in these forward-looking statements. Our historical financial information, and the risks and other important factors that could affect the outcome of the events set forth in these statements and that could affect our operating results and financial condition, are contained in our filings with the Securities and Exchange Commission, including our Form 10-K for the 2016 year and subsequent filings. We undertake no obligation to review or update any forward-looking statements to reflect events or circumstances occurring after this presentation. Policy Regarding Prior Guidance and Forward-Looking Statements From time to time we may provide financial guidance in our earnings releases and make other forward-looking statements. Our financial guidance and other forward-looking statements are effective only on the date given. In accordance with our policy, we will not update, reaffirm or otherwise comment on any prior financial guidance or other forward-looking statements in connection with this presentation. No reference made to any prior financial guidance or other forwardlooking statements in connection with this presentation should be construed to update, reaffirm or otherwise comment on such prior financial guidance or other forward-looking statements. Non-GAAP Measures This presentation contains certain measures that are not defined terms under U.S. generally accepted accounting principles ( U.S. GAAP ). These non-gaap measures should not be considered in isolation or as a substitute for, or superior to, measures of liquidity or performance prepared in accordance with U.S. GAAP, and may not be comparable to calculations of similarly titled measures by other companies. See Financial Reconciliation Tables, Non-GAAP Measures and End Notes in the Appendix. 2

3 Amkor Trusted OSAT partner since 1968 A leader in advanced packaging 10 million sq. ft. of manufacturing space $3.9 billion sales in 2016 Recent acquisitions: J-Devices and NANIUM 3

4 The Amkor Value Proposition Economies of Scale Broad Geographic Footprint World Class Service Quality Oriented Operation Technology Leadership 4

5 Amkor in the Semiconductor Supply Chain Original Equipment Manufacturers Semiconductor Companies Wafer Manufacturing Packaging & Test Smartphone & tablet Automotive Fabless IDM Wafer foundry IDM fab OSAT IDM factory Consumer electronics 5

6 Balanced Growth Strategy Increase revenues in markets other than smartphone (e.g. Automotive) Expand smartphone customer base Greater China Multiple tiers Gain share in ios and Android Advanced SiP MEMS Focus on flexible manufacturing lines, better planning, higher efficiency 6

7 Broad Geographic Footprint 10 million square feet of manufacturing space in Asia and Europe TAIWAN 0.9M sf PHILIPPINES 1.3M sf KOREA 2.9M sf CHINA 1.3M sf JAPAN/ J-DEVICES 2.6M sf PORTUGAL 0.5M sf MALAYSIA 0.4M sf 7

8 NANIUM Acquisition: Wafer-Level Fan-Out Provides best-in-class WLFO capacity Proven technology High yields Key customers Amkor will provide expansion capital and customer breadth WLFO production capacity in Portugal and Asia 8

9 End Markets: LTM 1Q17 44 % COMMUNICATIONS 25 % AUTOMOTIVE & INDUSTRIAL 14 % CONSUMER 10 % NETWORKING 7 % COMPUTING Smartphone Tablet Handheld Device Infotainment Safety Performance Television Set-Top Box Personal Electronics Server Router Switch PC/Laptop Hard Disk Drive Peripherals 9

10 High Amkor Content in Smartphones & Tablets Applications Processor Memory Digital Baseband fccsp SiP WLCSP SiP CABGA WLCSP MLF Display Touch- Screen Touch Screen Controller PoP/fcSCSP GPS WiFi /BT WLCSP MLF SiP Connectivity (WiFi, Bluetooth, FM Radio) Power Management SiP Antenna Switch Filters FEM Duplexer Power Amplifier Multiband/ Mode Transceiver Battery Baseband Processor PMIC Application Processor NAND Mobile DDR MEMS Audio Processor SCSP RF and FE Modules Camera MEMS & Fingerprint Sensors SiP fccsp WLCSP Touch Screen Controller 10

11 Adjacent Markets Benefit from Advances in the Smartphone & Tablet Market Automotive Networking Wearables 11

12 Greater China Expansion Cumulative CapEx of $1.1B in Amkor Shanghai factory Expansion of Shanghai factory to 1.3M sq. ft. of manufacturing space Shipping 2.2 billion units per year from Shanghai factory Most advanced OSAT factory in China Advanced SiP WLCSP, 8 and 12 bumping MEMS 12

13 World s Largest OSAT for Automotive ICs $1 billion in combined Amkor Sales in Camera Modules Body Systems Info-Center MEMS & Sensors Safety Systems 13

14 The Big 5 Packaging Platforms for Smart Phones and Tablets 1 Low-Cost Flip Chip 2 MEMS 3 Advanced System in Package (SiP): Laminate 4 Wafer-Level Packaging (WLCSP, WLFO) 5 Advanced SiP: Wafer-Based 14

15 Advanced System-in-Package (SiP) $775 million Sales in 2016 Radio Modules Sensory Modules Connectivity Modules Automotive Modules 15

16 Wafer-level Packaging Platforms WLCSP Wafer-level Chip Scale Package (Fan-In) Eliminates substrate Common form factor for flagship smartphones WLFO Wafer-level Fan-out (Low density fan out) Stretch small die to accommodate bond pads SWIFT Silicon Wafer Integrated Fan-out Technology (High density fan-out) Ideal for high pin count and SiP applications 16

17 Body size Wafer-level Package Platforms 12x12 mm + 10x10 mm 8x8 mm 6x6 mm WLCSP WLFO SWIFT AP/BB GPU 4x4 mm PMIC, Transceivers, CODEC 2x2 mm Audio Amplifier, Touch Panel Controller ,000 1,100+ I/O 17

18 WLP: Key Success Factors Portfolio of key technologies Capital investment Engineering expertise Service infrastructure 18

19 Research & Development Technology Leader Low-cost Flip Chip SWIFT /SLIM technology Fusion MEMS Advanced SiP Cost Innovator Engineering lower cost materials New low cost manufacturing methods Innovating lower cost package structures 19

20 2016 OSAT Revenue $ in Billions $5.0 $3.9 $7.2 Amkor 15% Share $2.9 $2.6 $1.5 $0.8 $0.7 $0.7 $0.6 ASE (ATM) Amkor JCET SPIL PTI Tianshui TongFu UTAC Chip Mos All Other Top 5 61% Share Source: Company press releases. [Gartner Market Share Analysis. Semiconductor Packaging and Test Services, Worldwide, December 2016] 20

21 Appendix 21

22 1Q17 and 2Q17 Summary (In Millions, Except per Share Data) 2Q 2017 Guidance As of April 27, 2017 (3) 1Q Q 2016(4) 1Q 2016 Net Sales $955 - $1035 $914 $1,022 $869 Gross Margin 16% - 20% 15.6% 22.2% 14.1% Net Income (Loss) $86 $125 ($10) $100 ($1) Earnings per Diluted Share $0.36 $0.52 ($0.04) $0.42 $0.00 EBITDA (1) - $154 $280 $155 Net Cash Provided by Operating Activities - $103 $238 $138 Free Cash Flow (2) - $17 $117 ($61) (1), (2), (3) and (4): See notes on page 32 22

23 Profitability Trends Revenue, Gross Profit and Gross Margin $ in Millions $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $3,894 $3,939 $3,129 $2,885 18% 18% 18% 17% $553 $479 $695 $ * LTM 1Q17 Revenue Gross Profit Gross Margin % (1) 25% 20% 15% 10% 5% 0% *Non-GAAP Gross Margin was 20%. See page 30 for reconciliation of Non-GAAP measures. 23

24 EPS Trends $0.81 $0.69 $0.65 $ * 2015* 2016 LTM 1Q17 *Non-GAAP Earnings per Diluted Share. See page 30 for reconciliation of Non-GAAP measures. 24

25 Free Cash Flow and EBITDA Free Cash Flow (2) $ in Millions $140 $217 EBITDA (1) $ in Millions $739 $659 $852 $851 $54 ($63) LTM 1Q LTM 1Q17 (1) and (2): See notes on page 32 25

26 Capital Expenditures and Capital Intensity $ in Millions $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 22% 19% 17% $38 $170 $154 $643 $480 $500 $ Guidance (3) 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Expect 2017 Capital Expenditures (3) of Around $500M Capital Expenditures K5 Spending Capital Intensity % (5) (3) and (5): See notes on page 32 26

27 Credit Profile Total Debt and Cash $ in Millions Debt/EBITDA (1) $1,531 $1,587 $1,475 $1, $450 $523 $550 $ LTM 1Q17 Total Debt Cash LTM 1Q17 (1): See note on page 32 27

28 Debt Maturities Maturity Profile as of March 31, 2017 $ in Millions $400 $525 $615M Cash $256 $183 $128 $ Term Loans and Other Senior Notes $350M In Available Credit Lines 28

29 Financial Reconciliation Tables $ in Millions LTM 1Q Q17 4Q16 1Q16 Net Income (Loss) $155 $164 $51 $130 ($10) $100 ($1) Plus: Interest Expense (including Related Party) Plus: Income Tax Expense Plus: Depreciation & Amortization EBITDA* $851 $852 $659 $739 $154 $280 $155 Debt $1,523 $1,475 $1,587 $1, Debt / EBITDA* Net Cash Provided by Operating Activities $694 $729 $585 $615 $103 $238 $138 Less: Payments for Property, Plant and Equipment (540) (650) (538) (681) (88) (168) (199) Plus: Proceeds from Sale of and Insurance Recovery for.,...property, Plant and Equipment Free Cash Flow* $217 $140 $54 ($63) $17 $117 ($61) * See discussion of non-gaap measures on page 31 29

30 Financial Reconciliation Tables Gross Margin 17.7% Plus: Litigation settlement charges divided by net sales 2.4% Non-GAAP Gross Margin* 20.1% Earnings per Diluted Share $0.22 $0.55 Plus: Litigation settlement charges per diluted share Plus: Net loss on acquisition of J-Devices per diluted share Plus: Loss on early extinguishment of debt per diluted share Less: Gain on sale of subsidiary to J-Devices per diluted share - (0.07) Non-GAAP Earnings per Diluted Share* $0.32 $0.81 * See discussion of non-gaap measures on page 31 30

31 Non-GAAP Measures Generally, a non-gaap financial measure is a numerical measure of a company s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Free cash flow is not defined by U.S. GAAP. We define free cash flow as net cash provided by operating activities less payments for property, plant and equipment, plus proceeds from sale of and insurance recovery for property, plant and equipment. We believe free cash flow to be relevant and useful information to our investors because it provides them with additional information in assessing our liquidity, capital resources and financial operating results. Our management uses free cash flow in evaluating our liquidity, our ability to service debt and our ability to fund capital expenditures. However, free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other, non-discretionary expenditures, such as mandatory debt service, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. This measure should be considered in addition to, and not as a substitute for, or superior to, other measures of liquidity or financial performance prepared in accordance with U.S. GAAP, such as net cash provided by operating activities. Furthermore, our definition of free cash flow may not be comparable to similarly titled measures reported by other companies. EBITDA is not defined by U.S. GAAP. We define EBITDA as net income before interest expense, income tax expense and depreciation and amortization. We believe EBITDA to be relevant and useful information to our investors because it provides additional information in assessing our financial operating results. Our management uses EBITDA in evaluating our operating performance, our ability to service debt and our ability to fund capital expenditures. However, EBITDA has certain limitations in that it does not reflect the impact of certain expenses on our consolidated statements of income, including interest expense, which is a necessary element of our costs because we have borrowed money in order to finance our operations, income tax expense, which is a necessary element of our costs because taxes are imposed by law, and depreciation and amortization, which is a necessary element of our costs because we use capital assets to generate income. EBITDA should be considered in addition to, and not as a substitute for, or superior to, operating income, net income or other measures of financial performance prepared in accordance with U.S. GAAP. Furthermore our definition of EBITDA may not be comparable to similarly titled measures reported by other companies. In the presentation, we provide non-gaap gross margin and non-gaap earnings per diluted share for certain periods. We present these non-gaap amounts to demonstrate the impact of the acquisition of J-Devices, the sale of our subsidiary to J-Devices, the early extinguishment of debt and the charges we recognized related to the settlement of our litigation with Tessera. These measures have limitations, including that they exclude the charges for the settlement payments, which are amounts that the company will ultimately have to pay in cash, and should be considered in addition to, and not as a substitute for, or superior to, gross margin and earnings per diluted share prepared in accordance with U.S. GAAP. 31

32 Endnotes 1) EBITDA is defined as net income before interest expense, income tax expense and depreciation and amortization. Please see reconciliation of non-gaap measures on page 29. 2) Free cash flow is defined as net cash provided by operating activities less payments for property, plant and equipment, plus proceeds from sale of and insurance recovery for property, plant and equipment. Please see reconciliation of non-gaap measures on page 29. 3) This financial guidance is from our April 27, 2017 earnings release and is reproduced here for convenience of reference only. This reference is not intended, and should not be relied upon, as a reaffirmation or other commentary with respect to such financial guidance. Please see page 2. 4) Fourth quarter 2016 results include approximately $26 million (250 basis points to gross margin) of insurance proceeds related to the second quarter 2016 Japan earthquakes. 5) Capital intensity is defined as capital expenditures as a percentage of net sales. 32