Little known semiconductor packaging, testing stock poised to gain
Amkor Technology isn’t a household name, but it’s poised to become a big winner as artificial intelligence spreads. Shares of the semiconductor packaging and testing provider have jumped 47% just since the start of the year, and have almost quadrupled over the past 12 months. The S & P 500 is little changed and up 29% in the same period. AMKR YTD mountain Amkor Technology shares are up 40% in the year to date. Amkor’s strong performance comes as data center spending is projected to reach $7 trillion globally by 2030, according to consultant McKinsey & Co. At the same time, products from smartphones to electronic vehicles are also using semiconductor technology to power AI-enabled features. Amid the boom , technology giants have turned to Amkor to assemble and test their chips. The company services customers in the U.S., China and Europe. “What looks like a pocket of strength usually propagates across the industry,” Needham analyst Charles Shi told CNBC. “AMKR is … well positioned to capture some AI-related packaging demand.” Needham rates Amkor a buy with a $65 price target on the stock, 12% above Friday’s close. Amkor specializes in taking several semiconductor components and packaging them into a single, large chip such as a graphics processing unit (GPU). That assembly allows the components to operate faster, cooler and use less power, making them more effective in AI applications. Amkor also tests AI chips, using verification checks to ensure semiconductors meet performance specifications and are durable. High-profile deals Amkor has clinched several high-profile deals to provide its services to semiconductor makers and others companies. In 2023, Amkor struck a deal with Apple to make the iPhone maker the first and largest customer at its packaging plant outside Phoenix. Last year, Amkor was one of at least nine companies to join an Apple-sponsored coalition called the American Manufacturing Program. In 2024, Amkor signed an agreement with Taiwan Semiconductor Manufacturing Co . to provide advanced, turnkey packaging and test services at a chip fabrication plant, also in Arizona. The dealmaking is likely to ramp up for Amkor in the near future as funding for data centers increases, according to UBS. Hyperscalers have already earmarked nearly $700 billion to bolster their AI pushes in 2026, more than was budgeted in 2025. “Amkor’s focus on advanced technology allowed it to capture strong sales during the first wave of AI in [the second half of 2023] and 2024,” UBS analyst Randy Abrams said in a February report. “We are seeing good qualification activity for a second wave of projects,” supported by spending from cloud providers and deals with integrated circuit suppliers for multi-gigawatt build-outs of application-specific integrated circuit and GPU capacity, he wrote. Tailwinds Tailwinds from smartphone and automobile production are also likely to boost Amkor’s sales, according to Melius Research, noting that semiconductor technology undergirds memory and camera capabilities in both cellphones and advanced driver-assistance systems. “Amkor has higher exposure to Apple, who is about to launch a bevy of products that will help it gain share, like a Foldable [smartphone] and the iPhone 20 next year,” Melius analyst Ben Reitzes said in a note to clients this week. “Apple needs these guys if it wants to make its chips in the USA.” Melius rates Amkor a buy with a $60 price target. Amkor’s partnership with Apple could help it outperform some of the Street’s conservative growth forecasts, said Morgan Stanley analyst Joseph Moore, especially as Apple prepares for a late 2026 roll out of several high-end cellphones that will incorporate advanced semiconductors. “AMKR’s smartphone portfolio mix is skewed to the high-end, meaning they should outperform more conservative unit forecasts of down 10-15%,” Moore wrote in a February report. Shipment decline To be sure, iPhone shipments could fall roughly 2% year-over-year due to a shift in Apple’s new product schedule, which may challenge Amkor’s communications unit, according to Moore. Another risk would emerge if the data center boom fails to fully materialize. Power constraints and laws limiting where facilities may be built , for example, could force technology providers to curb their construction plans. Nevertheless, Melius Research expects Amkor shares to grow less volatile as it picks up AI-related business in some form or another in the U.S. and abroad. Right now, Amkor has a beta of 1.74, almost twice as volatile as the S & P 500, according to FactSet data. “Amkor is increasingly well positioned to become less cyclical … driven by the need for advanced packaging in the U.S. and Western-friendly countries,” Reitzes wrote. “The company sits at the intersection of Nvidia ‘s next-generation platforms, chiplet-driven architecture shifts, and U.S. supply-chain realignment, creating a multi-year demand backdrop that extends well beyond traditional smartphone and consumer cycles.”
<
