Amkor Technology (AMKR) risk factors, FY2025 10-K

Risks Related to Our Business, Operations and Industry

1. 01Our packaging and test services are used in volatile industries, and industry downturns and declines in global economic and financial conditions could harm our performance
2. 02Our business may suffer if the cost, quality or supply of materials or equipment changes adversely
3. 03Our operating results and cash flows have varied and may vary significantly as a result of factors that we cannot control
4. 04We compete against established competitors in the packaging and test business as well as internal capabilities of IDMs and face competition from foundries and contract manufacturers31% rewritten
5. 05If we experience a significant loss of IDM or foundry business, it could have a material adverse effect on our business, liquidity, results of operations, financial condition and cash flows, especially during a prolonged industry downturnNew
6. 06We also face competition from contract manufacturers and electronic manufacturing service providers, many of which are larger than us, have lower cost structures, and may be willing or able to sell their services at lower margins. These competitors have increased and could increase pricing and competitive pressures
7. 07We make substantial investments in equipment and facilities to support the demand of our customers, which may materially and adversely affect our business if the demand of our customers does not develop as we expect or is adversely affected21% rewritten
8. 08Our packages are incorporated into a number of end products. If our packages fail, our business may be exposed to warranty claims, product return and liability risks, economic damage claims and negative publicity
9. 09Due to our high percentage of fixed costs, we may be unable to maintain satisfactory gross margins if we are unable to achieve relatively high-capacity utilization rates
10. 10The lack of contractually committed customer demand may materially and adversely affect our sales
11. 11Historically, there has been downward pressure on the prices of our packaging and test services
12. 12Packaging and test processes are complex, and our production yields and customer relationships may suffer from defects in the services we provide or if we do not successfully implement new technologies
13. 13Test is also complex and involves sophisticated equipment and software. Similar to many software programs, these software programs are complex and may contain programming errors or “bugs.” The test equipment is also subject to malfunction, and the test process is subject to operator error
14. 14A significant portion of our revenue is derived from customers in the automotive industry. A downturn or lower sales to customers in the automotive industry could materially affect our business and results of operations
15. 15The loss of certain customers or reduced orders or pricing from existing customers may have a material adverse effect on our operations and financial results
16. 16For example, as seen in the automotive end market in 2020, the Covid-19 pandemic and restrictions imposed by governmental authorities to mitigate the spread of Covid-19 decreased demand for our customers’ products and services, thereby adversely impacting their demand for our services
17. 17We may have difficulty funding liquidity needs
18. 18The trading price of our common stock has been, and is likely to continue to be, highly volatile and could be subject to wide fluctuations. Such fluctuations could impact our decision or ability to utilize the equity markets as a potential source of our funding needs in the future
19. 19We face challenges as we integrate diverse operations

Risks Related to Our International Sales and Operations

1. 20Our factories and operations, and those of our customers and vendors, are located in various foreign jurisdictions, which exposes us to risks arising from international trade restrictions and regional conflict

Risks Related to Cybersecurity, Data Privacy and Intellectual Property

1. 21Our business will suffer if we are not able to develop new proprietary technology, protect our proprietary technology and operate without infringing the proprietary rights of others
2. 22We face risks in connection with the continuing development and implementation of changes to, and maintenance and security of, our information technology systems25% rewritten

Risks Related to Our Indebtedness

1. 23Covenants in the indentures and agreements governing our current and future indebtedness could restrict our operating flexibility
2. 24Our substantial indebtedness could have a material adverse effect on our financial condition and prevent us from fulfilling our obligations
3. 25If interest rates increase, our debt service obligations under our variable rate indebtedness would increase, which could have a material adverse effect on our results of operationsNew
4. 26We are exposed to fluctuations in interest rates and changes in credit risk, which could have a material adverse impact on our earnings as it relates to the market value of our investment portfolio

Risks Related to Our Common Stock

1. 27Susan Y. Kim and members of her family can effectively determine or substantially influence the outcome of all matters requiring stockholder approval
2. 28We may decrease or suspend our quarterly dividend, and any decrease in or suspension of the dividend could cause our stock price to decline

Risks Related to Human Capital and Management

1. 29We face risks trying to attract, retain or replace qualified employees to support our operations

Risks Related to Regulatory, Legal and Tax Challenges

1. 30If we fail to maintain an effective system of internal controls, we may not be able to accurately report financial results or prevent fraud24% rewritten
2. 31Environmental, health and safety liabilities and expenditures could have a material adverse effect on our business, results of operation and financial condition

General Risk Factors

1. 32Our business and financial condition has been adversely affected, and could be adversely affected in the future, by natural disasters and other calamities, health conditions or pandemics, political instability, hostilities or other disruptions
2. 33In addition, some of the processes that we utilize in our operations place us at risk of fire and other damage. For example, highly flammable gases are used in the preparation of wafers holding semiconductor devices for flip chip packaging