Amkor Technology, Inc.

And welcome to the Amcor Technology second quarter 2022 earnings conference call. My name is Diego, and I will be your conference facilitator today. At this time, all participants are in a listen-only mode. After the speaker's remarks, we will conduct the question and answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Jennifer Ju, head of investor relations. Ms. Ju, please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for AMCOR's second quarter 2022 earnings conference call. Joining me today are Gil Rutin, our chief executive officer, and Megan Faust, our chief financial officer. Our earnings press release was filed with the SEC this afternoon and is available on the investor relations page of our website, along with the presentation slides that accompany today's call. During this presentation, we will use non-GAAP financial measures, and you can find the reconciliation to the US GAAP equivalent on our website. We will make forward-looking statements about our expectations for AMCOR's future performance based on the environment as we currently see it. Of course, actual results could differ. Please refer to our press release and other SEC filings for information on risk factors, uncertainties, and exceptions that could cause actual results to differ materially from these expectations. Please note that the financial results discussed today are preliminary, and final data will be included in our Form 10-Q. And now I would like to turn the call over to Hugh.

Thanks, Jennifer. Good afternoon, everyone, and thank you for joining the call today. MCOR delivered record second quarter revenue of $1.5 billion, and EPS of 51 cents. Demand for advanced packaging remained strong and drove our revenue in the automotive and industrial market to 16% year-on-year growth and a new record. Revenue increased 14% year-on-year in the first half and advanced packaging grew 18% despite the COVID-19 lockdown in our Shanghai factory. While the industry is facing macroeconomic headwinds and market forecasts have weakened in some areas, we continue to see a robust demand for our services, notably for advanced packaging. mCore's strategic focus and leadership position in advanced packaging enable us to leverage the growth catalyst in 5G premium smartphones, automotive electronics, high-performance computing, and IoT. Now let me review the dynamics in our end markets. In the first half of this year, our communication business grew 10% compared to the first half of last year. Although overall forecasts for smartphone units have weakened to a mid-single-digit year-on-year decline, 5G unit volume is expected to grow and reach an estimated 50% penetration this year, up from around 35% in 2021. Semiconductor content for premium-tier 5G phones continues to increase. And with our leading position in this market, we expect further growth through this transition to 5G. The density and size advantages of our proven package-on-package technology for high-end processors and modems and the SIP technology for integration of RF sensors and display components positions us well to capture this growth. Solid performance in the automotive and industrial markets drove first-half growth of 16% versus last year. Although material constraints throughout the automotive supply chain persist, we observe improvement in lead times and anticipate a more balanced supply chain by the end of this year. We expect the automotive semiconductor market to outgrow the overall industry. Average semiconductor content per car is expected to increase 50% by 2025, from around $500 in 2020 up to $750 per car in 2025. Market forecasts shows mid-teens CAGRs over the next several years, driven by adoption of ADAS, electrification, infotainment, and telematics. These new and expanding features require the use of advanced packaging to obtain the required performance, quality, and reliability needed in the automotive industry. As the leading automotive OSAT with a global manufacturing footprint and advanced packaging solutions throughout the vehicle, we are well positioned to profit from this market growth. MCOR's 40 plus year track record as a trusted partner for leading automotive customers has built a solid foundation to enable technology innovations and to support the reliable automotive supply chain. Continued strong momentum in the computing market drove revenue for the first half up by 27% compared to the first half of 2021. This robust growth was driven by data centers, infrastructure, and PCs. In data centers, the introduction of AI is driving investments in high-performance computing utilizing advanced packaging technology. We see similar technology requirements in wired and wireless infrastructure markets, notably in support of 5G infrastructure. Although the PC market is softening, the trend to ARM-based PC architectures opens new business opportunities for mCore. Besides the technology shift in the PC market, we observe a continued trend towards an outsourced semiconductor supply chain, with the big data-producing companies taking an active role in developing key semiconductors for hyperscale data centers. These companies tend to utilize a fully outsourced supply chain and are partnering with foundries and OSATs like mCore to accelerate innovation. With our broad advanced packaging portfolio, and establish relationships with lead customers and foundries, we are well positioned to capitalize on opportunities in these growing computing applications. And we continue to invest in advanced technology and manufacturing scale for this market. Our consumer business increased 8% in the first half, supported by strength in traditional consumer products and a broad portfolio in IoT wearables. Our advanced SIP assembly and test platform offers a complete turnkey solution for the IoT wearable market by enabling high levels of integration in a single SIP module with small form factor. IoT wearables continue to be an important driver for growth, although we expect that this emerging product category is more prone to quarterly variability due to supply constraints and varying product life cycles. With an advancing digital economy and increased proliferation of connected wearable devices, mCore has the technology, scale, and expertise to support this trend. We continue to invest in our test business to broaden the scope, scale, and capability of our test services. With increasing complexity and cost of our assembled products, multistage testing becomes an important part of our test portfolio. EMCOR offers customers a broad range of test solutions, from wafer probe and final test to system level test, to ensure quality and reliability of the final product. Our ability to support full turnkey services, from wafer FEP to final product shipment, reduces cycle time and customer resources to manage each individual service. Our global manufacturing organization continued to demonstrate EMCOR's commitment to operational excellence in support of our customers. Our Quality First program is widely deployed in the organization and close collaboration with our supply chain partners further improved supply reliability. In the supply chain, we observe improvements in lead times of substrates, lead frames and components, and we expect a more balanced supply chain towards the end of the year. The mandated COVID-19 lockdown of our Shanghai factory required the utmost inflexibility of the team to return to normal output levels in the second quarter. Our team was focused on supporting our people and keeping them safe, while closely cooperating with local government and customers to minimize the impact. Now let me turn to our third quarter revenue outlook. Although market forecasts have weakened in some areas, we are expecting a strong third quarter with revenue of $1.93 billion at the midpoint of our guidance. This would represent a sequential increase of 28% and a year-on-year increase of 15%. We expect solid demand across all end markets, especially driven by new product ramps in support of 5G premium-tier phone models and the continued strength in computing, automotive, and consumer markets. Megan will now provide more detailed financial information.