Amkor Technology, Inc.

Good day, ladies and gentlemen, and welcome to the Amcor Technology First Quarter 2023 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 a question-and-answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Jennifer Zhu, Head of Investor Relations. Ms. Zhu, please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us for AMCOR's first quarter 2023 earnings conference call. Joining me today, Arheel 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 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 Gil.

Thank you, Jennifer. Good afternoon, everyone, and thank you for joining the call today. MCOR delivered first quarter revenue of $1.47 billion and EPS of 18 cents, both above the midpoint of our guidance. These results demonstrate MCOR's strength in navigating through this industry cycle. Our automotive and industrial end market posted another quarterly revenue record, driven by resilient demand and building on MCOR's leadership position in this market. Our strong footprint in premium tier smartphones also generated positive results. with low single-digit year-on-year growth in our communication business. Challenging macroeconomic conditions and weakening demand in consumer and computing contributed to a total year-on-year revenue decline of 8% for the first quarter. The semiconductor industry is facing near-term headwinds, mainly caused by high inventory and weak end-market demand. most recent market forecasts projecting a further decline for this year. Our advanced packaging portfolio accounted for 73% of first quarter revenue and has a strong project pipeline. We expect to perform better than the market based on this leading position in advanced packaging, our broad and diverse global footprint, and our focus on industry megatrends. Now let me review the dynamics in each of our end markets. Revenue from the communications market was up 2% year-on-year, driven by strength in our advanced SAP portfolio, supporting multiple functions throughout the phone. We observe customers continuing to work through excess inventory, especially within the Android supply chain. Current estimates project smartphone units to be down low single digits this year. However, semiconductor content in premium-tier phones continues to increase, and innovations are improving performance and adding functionality. Emcor holds a leadership position in advanced packaging throughout premium-tier smartphones and has a strong track record as a trusted partner for innovative solutions and for delivering operational excellence. Revenue from the automotive and industrial market increased 14% year-on-year, driven by growth in ADAS, electrification, and industrial applications. Advanced driver assistance systems generate growth in multiple applications, from cameras and high-performance processors through sensors like radar and LiDAR. EV adoption is leading innovations in electrification, especially the introduction of wide bandgap materials like silicon carbide and gallium nitride. These materials enable improvements in power efficiency and charging infrastructure. The trend is accelerated by government initiatives to support a clean energy transition. ADAS, electrification, infotainment, and telematics will drive continued expansion of semiconductor content per car. Market reports project automotive electronics to grow at the mid-teens CAGR for the next several years. one of the highest growth areas in the semiconductor markets. As the leading automotive OSET with qualified manufacturing lines in multiple geographies and a broad technology offering, we expect ongoing strength in this market. Revenue from the consumer end market decreased 43% versus the first quarter last year. We observed multiple near-term headwinds impacting the consumer markets. including product lifecycle changeovers in the IoT wearable markets, reduced consumer demand, and excess inventory. We continue to work on building the pipeline for IoT devices utilizing our advanced SAP solutions and are diversifying our product and customer portfolio. We recently began ramping new products for the emerging AR VR experience and expect the proliferation of IoT devices to drive revenue growth beyond the current semi-cycle. Revenue from the computing end market decreased 17% year-on-year, driven by weakness in personal computing and storage. In data center, we support all areas, from CPU, GPU, memory, and AI accelerators to routers and switches. High-performance computing devices supporting artificial intelligence require the use of the latest silicon nodes and are enabled by advanced packaging solutions such as 2.5D and high-density fan-out. In addition, innovative thermal materials we apply in our packaging solutions help our customers resolve technical challenges. With our broad advanced packaging portfolio and established relationship with lead customers and foundries, Emcor is well positioned to capitalize on opportunities in the computing market. Our global manufacturing organization continues to demonstrate operational excellence and supply reliability across our factories. With lower capacity utilization, the team is focused on managing costs while maintaining our high performance standards. Geopolitical dynamics continue to impact the semiconductor supply chain. With our diversified geographic footprint, Emcor is uniquely positioned to support our customers with reliable and cost-effective manufacturing. We are actively securing new programs with our customers in support of diversifying and de-risking their supply chains. Investments in our new Vietnam factory continue as planned, with the goal to start high-volume manufacturing late this year. Additionally, we are expanding our silicon carbide and power technology capabilities to both our Portugal and Japan factories. In the U.S., we continue to be actively engaged in discussions with customers, partners, and economic development agencies to establish a semiconductor supply chain. Now let me turn to our second quarter outlook. We expect second quarter to be similar to first quarter. with revenue of $1.475 billion at the midpoint of guidance. For the second half of this year, we remain optimistic that demand as well as supply chain inventory will improve. We are poised to accelerate with our leading technology portfolio and diversified manufacturing and end market footprints. We believe that the secular growth drivers for the semiconductor industry remain in place, and we are well positioned to outgrow the markets. With that, I will now turn the call over to Megan to provide more detailed financial information.