Amkor Expands Advanced Packaging: Can Its $12B Arizona Bet Pay Off?

Amkor Technology AMKR is expanding its Arizona advanced packaging and test campus, raising the project’s planned investment to approximately $12 billion. Phase 2 is expected to add 60,000 square meters of cleanroom capacity, taking the campus to about 93,000 square meters. Importantly, customer commitments have already surpassed the 33,000 square meters planned for Phase 1, providing a strong demand signal for the expansion.

The Arizona campus is designed to provide wafer bump, probe, assembly and test capabilities, while Phase 2 will further expand manufacturing scale. This expansion also aligns with Amkor’s strategic partnerships with TSMC and NVIDIA. Its 10-year advanced packaging agreement with TSMC is designed to expand packaging and test capacity and strengthen the U.S. semiconductor supply chain, while its multi-year NVIDIA partnership focuses on advanced packaging and test for next-generation AI infrastructure.

Phase 1 is progressing and is now fully committed, underscoring strong customer interest in U.S.-based semiconductor manufacturing. However, Phase 2 construction is anticipated to begin in late 2027, with completion expected by the end of 2029, creating a lengthy period before the expanded capacity becomes operational.

The primary risks involve substantial capital expenditure and capacity utilization; Amkor must convert customer demand into sustained capacity utilization and profitability. Overall, this Arizona-based initiative appears highly promising, and the company is expected to generate attractive returns on its $12 billion investment by leveraging strong customer commitments and growing demand for advanced packaging and test capabilities.

How INTC and FORM Challenge AMKR in Advanced Packaging

Intel Corporation INTC is challenging AMKR through its EMIB-T advanced-packaging technology, which targets AI silicon solutions and has a growing backlog. The company is investing in packaging capacity alongside higher 2026 CapEx. Intel expects EMIB-T to ramp to high volume in 2027, directly intensifying competition for advanced AI packaging demand.

FormFactor FORM is leveraging its strength in semiconductor testing and challenging AMKR in the broader advanced-packaging ecosystem. FORM highlights SmartMatrix for high-speed HBM4 stack testing and is expanding its manufacturing footprint with Farmers Branch, positioning it to support increasingly complex GPU, CPU and custom-ASIC ramps.

AMKR’s Share Price Performance, Valuation & Estimates

AMKR’s shares have gained 28.4% year to date, outperforming the broader Zacks Computer and Technology sector, which has returned 18.5%.

AMKR’s YTD Price Performance

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From a valuation standpoint, AMKR trades at a forward P/E of 17.83X, higher than the industry average of 13.62X. The company carries a Value Score of B.

AMKR’s Valuation

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The Zacks Consensus Estimate for AMKR’s 2026 and 2027 earnings is pegged at $2.60 and $2.72 per share, respectively. Despite recent downward revisions, the estimates imply year-over-year growth of 73.3% and 4.3%.

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AMKR stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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