Amkor Tech (NASDAQ:AMKR) reported first-quarter financial results on Monday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://event.choruscall.com/mediaframe/webcast.html?webcastid=83oloXM1
Summary
Amkor Tech reported record first quarter revenue of $1.68 billion, a 27% increase year-on-year, driven by growth across all end markets, with communications showing the strongest growth.
The company continues to invest in advanced packaging platforms, including hdfo, flip chip, and test, and is expanding its geographic footprint with new facilities in Arizona and Korea.
Amkor Tech expects second-quarter revenue between $1.75 and $1.85 billion, with projected gross margins of 14.5% to 15.5% and a full-year CapEx estimate of $2.5 to $3 billion.
Management highlighted strong demand in the semiconductor industry, while closely monitoring risks such as geopolitical tensions and material supply constraints.
The company is preparing for a multi-year value creation journey, with a focus on advanced packaging and strategic partnerships, and anticipates a significant ramp-up in the compute segment driven by AI and data center applications.
Full Transcript
OPERATOR
Good day ladies and gentlemen and welcome to the Amkor Technology first quarter 2026 earnings 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 Ju, Head of Investor Relations. Ms. Ju, please go ahead.
Jennifer Ju (Head of Investor Relations)
Good afternoon and welcome to Amcor’s first quarter 2026 earnings conference call. Joining me today are CEO Kevin Engle and CFO Megan Faust. 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 comparable GAAP financial measures in the slides. We will make forward looking statements today based on our current beliefs, assumptions and expectations. Please refer to our press release for a disclaimer on forward looking statements and our SEC filings for a discussion on the risk factors and uncertainties that may affect our future results. I will now turn the call over to Kevin.
Kevin Engle (Chief Executive Officer)
Thank you Jennifer Good afternoon everyone. Thank you for joining us today. Amkor delivered a strong start to the year, achieving record first quarter revenue of $1.68 billion, up 27%. Year on year we saw growth across all end markets and we’re encouraged by the breadth of demand we’re seeing across our technology platforms. Communications delivered the strongest growth and mainstream posted its fourth consecutive quarter of both sequential and year on year growth. Leading chip companies continue to trust us for their advanced packaging and test needs. We are clearly benefiting from our partnerships and our leading technology as we execute on a growing set of advanced packaging programs. Earnings per diluted share were $0.33, significantly higher than last year, reflecting disciplined execution and continued progress on our margin initiatives. Overall, this was a quarter that reflected momentum and demand, disciplined execution by our teams and continued preparation for the advanced packaging ramps we expect in the second half of the year. As we discussed last quarter, overall semiconductor demand is robust. The industry backdrop remains dynamic. We are closely monitoring export controls and evaluating trade policies. We see supply dynamics around advanced silicon, advanced substrates and memory and are managing these risks with agility alongside our customers and suppliers. Some customer supplied materials are being delayed causing nonlinear loading. This has been expected and we are prioritizing production where materials are available to minimize impact. Uncertainty related to the geopolitical events in the Middle East have increased over the last few months to date, we have not seen any supply disruptions related to these dynamics. However, conditions in the region are putting additional pressure on material pricing. We’re working closely with our customers to offset these increases across the supply chain. Now let me share an update on our strategic initiatives. First, elevating technology leadership. We continue to invest in advanced packaging platforms including HDFO, flip chip and test. These are critical to next generation AI and high performance computing as discussed last quarter. We are engaged on several HDFO programs this year and the newest Data Center CPU program is expected to begin ramping this quarter. Our preparations in Korea remain on track to scale this program into high volume the second half of the year. Overall, we see increasing opportunities for the compute market from a diverse customer base. Second, expanding our geographic footprint in 2026. Our priorities include meeting construction milestones of our Arizona facility and expanding manufacturing space in Korea. In Arizona, we are excited to see the progress as we wrap up foundation work and move towards building steel construction. Construction of phase one is planned to be completed in 2027 in Korea. The new test building is on track for completion at the end of this year. This will provide incremental space to support data center demand going into 2027. Third, enhancing our strategic partnerships in key markets, we continue to strengthen collaboration with customers across the ecosystem including foundries, fabless companies, IDMs and OEMs. As part of our partnership engagement model, our customers are making contributions that help align technology roadmaps, support our capital investment and enable rapid ramps as new capacity comes online. Across all three pillars, we remain focused on margin improvements driven by operational excellence, increased utilization, favorable pricing and a sustained mix shift towards higher value advanced packaging. Our mainstream factories in the Philippines are seeing improving demand and we’re continuing to optimize cost. In Japan, utilization of our advanced sites in Korea and Taiwan is increasing, improving profitability. In just over three weeks, we will host our 2026 Investor Day. This will give us an opportunity to provide deeper view into our strategic pillars. We will explain Amcor’s position as the semiconductor industry turns to advanced packaging for value creation. We are well positioned for this shift and we are at the beginning of a multi year value creation journey. We’re excited about our future. We look forward to sharing more of our story at the event on May 21st. I’ll now turn the call over to Megan to provide more details on our first quarter performance and near term outlook.
Megan Faust (Chief Financial Officer)
Thank you Kevin and good afternoon everyone. Amkor delivered record first quarter revenue of $1.68 billion, increasing 27% year on year revenue was above the midpoint of guidance driven by stronger than expected performance across all end markets except computing where we saw softness in PCs and laptops. The communications end market was the largest contributor to our year on year growth increasing 42%. We saw healthy demand across premium tier smartphones, especially iOS due to our strong footprint in the current generation. Android demand also remained healthy for the second quarter. Communications revenue is expected to be stronger than seasonal increasing mid to high single digits sequentially driven by continued strength in the iOS ecosystem. Revenue in the computing end market increased 19% year on year. Record revenue within AI data center applications was driven by broad based strength across multiple customers. This was partially offset by softness in PCs and laptops. Computing is expected to grow mid single digits sequentially in the second quarter driven by the ramp of the new HDFO data center CPU device that Kevin mentioned. Automotive and industrial revenue increased 28% year on year. ADAS and infotainment demand drove record revenue for advanced technology in this end market. The recovery in the mainstream portion of automotive and industrial continued with Q1 marking the fourth consecutive quarter of sequential growth. Revenue within the automotive and industrial end market is expected to grow mid single digits sequentially in Q2. Consumer revenue increased 4% year on year due to broad based improvement in demand across customers. Revenue in Q2 is expected to grow low teens percent sequentially driven by wearable products. Gross margin of 14.2% exceeded the high end of our Q1 guidance range primarily due to favorable product mix. Gross profit for the quarter was $239 million, up 52% from last year due to increased volume and focused cost management. Operating expenses for $139 million for Q1 operating income was $100 million and operating income margin was 6%, an improvement of 360 basis points year on year. Our effective tax rate for the quarter was 12.8% lower than our full year target of 20% due to discrete tax benefits recognized in the quarter. Net income was $83 million and EPS was $0.33. EBITDA was $285 million and EBITDA margin was 16.9%. As we have grown revenue by delivering high value advanced packaging technology to our customers, we are benefiting from the operating leverage in our model. In addition, our actions to structurally manage costs are showing up in our results demonstrating our ability to drive sustained margin improvement. As of March 31st we held $1.8 billion in cash and short term investments and total liquidity was $2.9 billion. Total debt was $1.4 billion and our debt to EBITDA ratio was 1.1 times. Our strong balance sheet provides the financial flexibility and liquidity for this next investment cycle. Now Turning to our second quarter outlook, building on the strong momentum in the first quarter, Q2 revenue is expected to be between 1.75 and $1.85 billion, representing a 7% sequential increase at the midpoint. Gross margin is projected to be between 14.5 and 15.5%. We expect operating expenses of approximately $120 million, which includes a gain on the sale of real estate of approximately $20 million. Our full year 2026 effective tax rate is expected to be around 20%. Net income is forecasted to be between 105 and $130 million, resulting in EPS between 42 and 52 cents. Our 2026 CapEx estimate remains at 2.5 to $3 billion. As a reminder, 65 to 70% is projected for facilities expansion including phase one of our Arizona campus. About 30 to 35% is projected for HDFO test and other advanced packaging capacity. The remaining spend is projected for R and D and quality programs. We anticipate elevated CAPEX spend for facilities expansion through 2027 as we complete phase one of our Arizona campus. At that point we will begin recognizing depreciation and other startup costs as we build and train the workforce ahead of production in 2028. Similar to our Vietnam ramp up phase, these preparation costs will be recognized in OPEX until programs are qualified for production, at which point they will transition to cost of goods sold. As a result, we anticipate this will start to dilute operating income margin by approximately 1 to 2% beginning in 2027 and improving in 2028. Once at full scale, we expect Arizona will be a significant driver of operating income margin expansion reflecting the benefits of high value advanced packaging at what is planned to be our most automated factory to wrap up we are pleased with our first quarter performance and the momentum we are building in 2026. We remain confident in the full year outlook we provided last quarter with revenue growth driven by acceleration in computing and strong growth in advanced automotive. Our focus and discipline as we execute on our strategic pillars positions us well to continue generating improved financial results and sustained shareholder value. I would like to emphasize Kevin’s remarks regarding our upcoming Investor Day. We are embarking on a multi year value creation journey, investing today to drive materially stronger earnings power in the future. We look forward to sharing more with you at our event on May 21st. This concludes our prepared remarks. We will now open the call up for your questions. Operator.
OPERATOR
Thank you. And at this time we will conduct our question and answer session. In order to get through as many questions in the time allotted, please limit yourselves to one question and one follow up question. To ask your question, press Star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. And our first question comes from Jim Schneider with Goldman Sachs. Please state your question. Good afternoon. Thanks for taking my question. Given your commentary on some of the customer supply materials being delayed as well as some pricing pressure that you expect could happen, can you maybe kind of discuss what on net you expect to happen in terms of gross margins in the back half of this year? It seems like there are some things very much in your favor. Increased loadings, better mix. Maybe talk about from the Q2 baseline. You just guided to what the sort of puts and takes are in terms of net impact on gross margins in the back half. Thank you.
Kevin Engle (Chief Executive Officer)
Maybe let me. And thanks Jim. So let me start maybe with a little bit more detail on the material supply dynamics and then Megan can cover the margin and profitability perspective. So, you know, I think when we look at the materials, you know, obviously we’ve highlighted that, you know, memory, advanced silicon, you know, substrates, we are seeing dynamics there, you know, different, slightly different dynamics. I’d say the one that we were able to kind of, you know, really see from a supply perspective is the advanced silicon. You know, sometimes, you know, when it comes to memory, we’re not quite sure how customers are moving demand around, you know, depending on their supply. But we definitely see that from advanced silicon. So basically what dynamics going on there is, you know, we have these situations where there’s forecasted material, the wafers or the memory doesn’t show up. And then we, luckily we’re in such a demand profile situation such that we have other material that we can typically load. So we haven’t really seen a utilization impact, but that is creating a dynamic to where some of the demand is getting pushed forward. So we’re definitely seeing that. And overall, you know, we feel that this supply dynamic for Q2 will be similar as Q1 and we’ll continue to manage that way. But Megan, can you talk a little bit about the margin profile?
Megan Faust (Chief Financial Officer)
Sure. So given that environment, we’re also in what we would say A constructive pricing environment. So we have been working with our customers to manage some of these pricing pressures. So considering that aspect, we expect that would cover most of those cost increases. So as we look out to the second half of the year, we’re still seeing our gross margins being able to rise in that mid to high teens level. Given the increase in utilization as well as the ramp expected for our compute segment surrounding the data center, that will have a favorable impact on product mix in addition to that being more high value advanced packaging. So those three elements, pricing, utilization and product mix, are all going to support that lift in the second half.
Kevin Engle (Chief Executive Officer)
Yeah. And maybe let me add a little bit more on pricing to give you a little color there. So when we go back to Q1, you know, we started some pricing activities then that was early on focused on Japan. We had talked about some of the dynamics for Japan in the past, but what we’ve been doing over the last quarter, working with most if not all of our customers to look at pricing dynamics throughout the course of the year. I think in general customers understand that the environment is such that costs are going up and we’re seeing some ability and willingness from customers to help us in those dynamics. So we expect to see pricing will kind of increase as we go throughout the year. So that will just help offset some of these cost increases that we’re seeing on the material side.
Jim Schneider (Equity Analyst)
That’s great. Color. Thank you. And then just to clarify, in terms of the computing ramp you’re expecting in the back half, should we expect that to inflect in Q3 or is that more of a kind of Q4 weighted event? Thank you.
Kevin Engle (Chief Executive Officer)
So it’s going to continue to ramp throughout the year. I’d say the ramp specifically for the CPU device will start this quarter, but we’ll start seeing meaningful revenue contribution in the third quarter and then just continues to ramp beyond that even going into 2027 and beyond.
OPERATOR
Great, thank you. Your next question comes from Ben Reitzis with Melius Research. Please take your question. Yeah. Hey, how are you doing guys? Thanks. I wanted to clarify your comments around the 1 to 2 point hit that comes at some point in 2027 due to the ramp of, I believe Arizona. And when exactly should we think about that timing to OP Inc. And then how should we be thinking about the offsetting revenue impacts there? Because I assume that there’s quite a bit, but I’m not sure if it hits right on time or if there’s a delay. And I know you only guide 1/4 at a time here or not that far out, but wondering how you would advise us to model that as we look into 27, which is going to be a really strong year for the space.
Megan Faust (Chief Financial Officer)
Yeah. So thanks Megan. Will go through a little bit of the details on the timing. I wanted to kind of step back a little bit and give you our color here. We wanted to make sure that the investment community understood the way we were looking at the dilution and the cost impacts. And part of that is thinking about obviously the building depreciation versus the equipment depreciation. And obviously the equipment depreciation cycle is only a seven year cycle. So that will have a larger impact as we really bring in equipment. So we wanted to just make sure that the investment community understood these dynamics and understood the timing. And then Megan, can you give me some more color there?
Kevin Engle (Chief Executive Officer)
Sure. So you know Ben, as far as the exact timing for when in 2027 that’s expected to hit, it’s a bit too early. Our estimates can shift based on the timing of equipment delivery as well as the speed of qualification process. So as a reminder, you know, this impact is really following the same framework as what we experienced in Vietnam where those costs will begin in opex and then once we qual our first program, those costs move to cost of goods sold and then those will be in margin. So as far as that 1 to 2% impact on operating income margin, that was anticipated to be a full year impact based on our estimate of currently when we believe those costs will begin. And then we see that improving in 2028, which is when we’re going to start scaling. And that leads to your second part of the question. We will see some modest revenue in 2028 that will then scale in 2029 where we believe exiting 29 we will have meaningful revenue such that moving into 2030 we would expect experience, you know, the full impact from the Arizona facility and all that obviously is subject to customer qualification, et cetera, but that’s what our current plan shows.
Ben Reitzis (Equity Analyst)
Okay, thanks for that color. And then just with regard to the CPU ramp, you know, this is a new product and whatnot. You’ve talked about it being higher margin. How should we think about. You already mentioned, Kevin, that it’s going to sustain and get bigger in 27. Do you see a strong pipeline for the CPU business, both ARM and maybe even x86? And just how would you characterize that win? Is it the first one? Is that the only one you have visibility on or is this a category that could become a meaningful contributor even beyond the big one? That you got.
Kevin Engle (Chief Executive Officer)
Yeah, yeah, thanks for that. Yeah. I would say in general, you know, strong tailwinds, obviously the one device that will ramp first, you know, we see a lot of opportunity there. Again, really ramping, you know, even beyond 2026. Other customers we are engaged. So there are other activities going on there even in some of the more advanced package types, you know, kind of, again, kind of looking more into 2027 for the, you know, the more advanced packages. But if we look at our, this HDFO platform in general, you know, whether this is a swift technology similar to TSMC’s COAS R or whether it’s a COAS L, you know, amcor’s S Connect technology, you know, the customer engagements are broadening, you know, so for those platforms now we have over five customers that we’re engaged with, you know, different levels of qualification. And then obviously just to go back to the 2,5D, you know, the silicon interposer type technologies, again, while we’re, you know, ramping down the legacy volume customer, we continue to see more customers engaging there. So that that customer base we had talked about before being, you know, half a dozen. I would say we’re over half a dozen now. So across that whole platform, that’s what we’re really looking at. The, you know, we look at our investments in equipment for this year. Vast majority of that investment is going into these types of platforms, you know, in Korea and then some of the other wafer based activities in Taiwan.
Randy Abrams (Equity Analyst)
Thank you. Your next question comes from Randy Abrams with ubs. Please state your question. Yes. Okay, thank you. Yeah, I wanted to ask a follow up question on your loading level. With IT picking up across mainstream advance, if you could give a sense utilization or headroom to grow to take on projects both in Korea, Vietnam just ahead of Arizona. And then if we look at the phase one, it looks like it adds about 10% to your network. In terms of floor space, should we think that approximate revenue power or doing advanced packaging, should we take a different approach to revenue as you bring on Arizona?
Kevin Engle (Chief Executive Officer)
Okay, yeah, thanks, Randy. So first utilization. So at a high level, our Q1 utilization was in the low 70s. And if you compare that to Q1 last year we were in the 50s. So you know, pretty significant improvement year on year. When we think about Q2, you know, we’ll still be in the 70s, it’ll be a slight improvement, but a little bit of an increase from Q1. And then when we kind of think about how that’s that split, you know, I think we talked about this a Little bit last quarter, the advanced lines are filling up, you know, in some of these areas are getting to levels of high utilization. And then we still have some factories, you know, more on the mainstream side where utilization is low. I think we’re seeing improvements in the Philippines and mainstream, but some other factories where we have some additional space to improve utilization. Then when we think about these more advanced programs, prior to the US Factory coming online for Korea, space is something that we’re monitoring very closely. You may recall we’re building a new facility there now. That facility will be completed the end of this year. So that’ll give us some headroom going into 2027 to continue to ramp. And then when we look at Vietnam, you know, we talked a little bit about this in the past. We’re migrating some of our SIP products from our Korea facility over to Vietnam. That will help provide additional room in Korea. And then we’re also obviously improve our utilization in Vietnam. So we have continued room in Vietnam to grow. From a space perspective, you know, that building, we even have some clean room space that’s yet to be facilitized. So we have headroom there. And then just to summarize again, you know, Korea, we’re expanding aggressively. You know, I think that’s an area where we see, you know, just a tremendous amount of demand, you know, going through this year and into next.
Randy Abrams (Equity Analyst)
Great. Appreciate the color on that. And then for the Arizona, maybe just to follow up to the first question, Arizona, if you could run through a bit on the scale that that could add. And then second question, wanted to ask on the just a bit more on the computing. I think one side with the traction that intel seeing on eMib, if you could talk about opportunity, timing or potential to take on either foundry or internal business, if that’s an opportunity. And. And then just curious a bit more on the Coass l or S connect how that’s coming together with a lot more projects seem to be moving in that direction.
Kevin Engle (Chief Executive Officer)
Okay. Okay. Yeah, Randy. So for Arizona, you’re thinking right. You know, I think we had mentioned, you know, roughly from a revenue perspective, we can be in the billion dollar run rate kind of range about 10%, you know, of our, of our 2025 revenue to 20 to a little 10 over 10%. So I think you’re thinking along the right levels then when it comes to emib. You know, I don’t want to talk too much about that. You know, obviously we had talked about how in the past that, you know, there is a collaboration with Amkor and Intel Related to providing some additional, you know, outsource modeling for emib, I’d say that activity is continuing. I don’t think I want to go too much more into detail. There’s. And then on the coas L, you know, as I mentioned a little while ago, we do have one CPU product that we’re working on with a customer. You know, I think I would say we’re still a little bit early in the development cycle with that customer, so it’s going to take some time. I would say that’s more likely a 2027 discussion. But you know, because of the constraints in general in the supply chain and in the packaging space, you know, these customers are very motivated to try to move as quickly as they can to develop new technologies and new supply chain options. So we really feel that’s a positive benefit for us.
Peter Pang (Equity Analyst)
Okay, great. Thanks a lot. Kevin. Your next question comes from Peter Pang with JPMorgan. Please state your question. Hey guys, thanks for taking my question. Just on your AI events packaging, I think last quarter you mentioned that it can grow three times year over year. To what extent is that a demand number or is that a supply constraint number? I just want to get a sense of how much you guys can improve that number over the course of this year.
Kevin Engle (Chief Executive Officer)
Okay. Hey, Peter. So, yeah, I’d say we’re still on track for tripling. I’d say, you know, the opportunities are there to grow beyond that. I’d say there’s several dynamics that can affect it. You know, like you said, potentially, you know, silicon supply, memory supply, you know, also just our ramp profile. Obviously we’re bringing in equipment as rapidly as we can to support these ramps, you know, so I think, you know, either one of those could affect it. You know, we’ll see how the year progresses. But I think at this point we’re still very confident about tripling.
Peter Pang (Equity Analyst)
Got it. And then I think we’ll ask Gord. You guys mentioned that, you know, the computer is going to grow 20% and then, you know, the high end of the automotive going to grow pretty strong and then rest of the business is kind of this low single digits. But if you kind of look at your communications, right, you guys are, you know, setting up for strong, strong growth. So one is, do you still see low single digits as a reasonable assumption for the remainder of business? And if so, does that imply that you guys are probably baking in some sort of deterioration in your communication markets for the second half of the year?
Kevin Engle (Chief Executive Officer)
Yeah. So I would say if we look at communications today a little bit Stronger than we were thinking last quarter. So I’ll say that I think we guided single digits. I don’t know that we said low or mid, but we said single digits. I’d say, you know, now we’re, we’re feeling a little more confident that, that that market’s going to be higher into low double digits. So I think that’s, that’s positive. You know, we are obviously looking at first half versus second half. The dynamics there. You know, typically, you know, that that second half lift is very high. You know, we’re anticipating potentially a slightly, you know, less boost in the second half related to, you know, that this was a very strong cycle. We’re coming off of, you know, the first half we’re seeing a little bit of strength, you know, a little bit more than we would have anticipated. So, you know, we’re a little bit hesitant to say that the first half, second half dynamic will be the same for this year.
Craig Ellis (Equity Analyst)
Got it. Thank you. Your next question comes from Craig Ellis with B. Riley Securities. Please state your question. Yeah, thanks for taking the question, Kevin. I’ll start with one there and just dig a little bit deeper into what you guys are saying. So I think in the data that we track, it sure looks like the supply chain built above seasonal for both smartphones mid to high end and PCs mid to high end through the first quarter. And our read is that that’s persisting in the second quarter and some of that relates to memory and other component availability and there are some other things that are at play. So the question is this, can you quantify the extent to which the communications business, it may be tracking a little bit better. And are you hearing any concern from your customers about the build intensity in the back half of the year? And I was a little bit surprised to see that the notebooks weren’t a little stronger. Intel’s client computing group comes to mind as an area of strength there. Is there something programmatic that’s happening inside of that business or what do you see going on?
Kevin Engle (Chief Executive Officer)
Okay, Craig, I’ll actually start with that one and I’ll ask Megan to help me a little bit on the communication side. So on the PC, yeah, I’d say there’s something a little bit different going on there. If we look at the unit volumes that we’re seeing from the customers that we’re supporting is still, it’s still holding in there. So, you know, we’ve talked in the past about how the transition to ARM based PCs, how you know, more of a preference towards a premium tier that we think that will buffer us somewhat from the material constraints and I’d say we’re seeing that one of the biggest dynamics that we’re seeing is we have a customer where they were were rebalancing their supply chain a bit and so we saw increases in a different market and then slight decreases in the computing in the PC space. So overall that customer is growing significantly but they decided to prioritize a slight different market. So I’d say that’s a bigger dynamic than the actual PC unit volume. So I definitely don’t want to signal that we’re seeing strong PC sales. So that’s the first one. Megan, can you comment a little bit on.
Megan Faust (Chief Financial Officer)
Yeah Craig. So if I understood the question around comms, I mean we did. We are seeing Both with our Q1 actuals and our Q2 guide, the communications market coming in stronger than we expected last quarter. And just to reiterate Kevin’s comments about the full year shape for comms because of that strength coming off a very successful last fall launch we don’t anticipate that the second half growth over the first half will be as pronounced because we see the first half being, I’m going to say much stronger and then for the full year we do see a better outlook on comms rising into the high single digit plus. Did that answer your question Craig?
Craig Ellis (Equity Analyst)
Yeah it does, thanks. And then the follow up I’ll direct to you Megan. So we’re looking for 2.75 billion in CapEx this year. It looks like we spent about 275 million in the first quarter. So how should we think about the linearity through the year with the balance of the Capex investment?
Megan Faust (Chief Financial Officer)
Yeah, sure. So the first quarter came in a little bit lower than what we were expecting. I will point you to the balance sheet. Our Capex payable did increase 200 million so that’s really just timing of when those payments will be made. But as far as the shape of the year it looks like it’s going to be more of a 30% first half, 70% second half year for Capex.
OPERATOR
Really helpful. Thanks Megan. Thanks Kevin. Your next question comes from Dennis Piathanen with Needham and company. Please take your question. Great, thank you. I think this was maybe partially answered in the previous question but maybe for your end markets could you please like rank order the expected growth or visibility going through the rest of 2026 and for all of these end markets are high memory prices showing any impacts on demand at all?
Kevin Engle (Chief Executive Officer)
Okay, thanks Dennis. So where do I want to Start. So if we look at the, trying to rank them a little bit. So the compute segment or market as an example, you know, we’re still seeing plus 20% in that kind of a rate for the full year. Again, couple things there as we mentioned, tripling on the advanced side for the data center and then muted on the PC side. Related to the dynamics we just spoke about for auto industrial, we had talked about pretty strong growth there, definitely on the advanced side, a little bit modest growth on the mainstream. So that’s the wire bond type packages and again what’s going on there? The dynamics. You’re aware of increases in ADAs, in car computing, those types of applications and then the more traditional drive, drivetrain type CPU or those types of products, just a little bit more muted but at least recovering. Then when we look at the rest of the market, we had signaled again single digit growth. We’ve been talking about how comms is looking a little bit better, potentially approaching double digits. So we feel better there. But in general, still a lot of different dynamics. It’s hard to gauge how memory is going to impact things. I’d say, you know, a lot of customers obviously are talking about memory prioritizing, you know, looking at different supply chain options, you know, optionality for them. But in general we’re still seeing pretty strong demand. If we look at impacts related to material supply, you know, I would try to give that a range of around 50 million to 100 million for Q1 and again that likely is just a push out of materials and then we would expect a similar level in Q2. But again, we’ll see how that develops over time.
Dennis Piathanen (Equity Analyst)
Great, thank you. And then regarding the operating margin impact from the Arizona facility. Maybe. So if we look at the positive side going into 2028, how big of an impact can we expect there? Like what are your expected co op product margins? Are they significantly higher than the current corporate average? Maybe like on a related note, what are we thinking about the financing mix for the overall $7 billion outlay?
Megan Faust (Chief Financial Officer)
Sure, I can take that. So as far as the business that we are operating in our Arizona facility, that will be at a, I would say meaningfully higher than our corporate average. So as far as impact on 28, we don’t want to give too much detail here. We’ll save that for our investor day and long term outlooks. And then your second part of that question was about funding. So you know, we had outlined a $7 billion investment for the two phases in Arizona. We have several, I would say opportunities to help fund that just as a reminder, we do have government incentives in the form of chips, grant funding of 400 million, as well as the 35% investment tax credit. So together, that’s a pretty meaningful support of 2.8 billion. In addition, we are working with our customers on different forms of, of support. And so that is a second part. We have some that have been executed and others that are currently in discussion. And then on the AMCOR side, you know, we have quite a bit of liquidity. We have, I would say, debt capacity. And so we’re evaluating what we may need to do there as well in the future. But as far as our 20, 26 investments, our current liquidity provides ample flexibility for us to manage that.
Joe Moore (Equity Analyst)
Understood, thank you very much. Your next question comes from Joe Moore with Morgan Stanley. Please state your question. Great, thank you. You talked about export controls as a factor you’re considering. Can you talk about what the variables might be there? Is that more around the AI centric stuff or anything else that we should be aware of?
Kevin Engle (Chief Executive Officer)
Yeah. Hey, Joe, you know, I think what we were trying to signal more there was around pricing, you know, that basically, you know, between, so the, well, I guess two dynamics, you know, one related to the Middle east and what’s going on there and you know, as oil prices continue to rise and just commodity pricing in general, whether it’s, you know, precious metals, things like that, you know, those are putting pricing dynamics in play for our suppliers. So that’s one dynamic that we’re watching very closely. And then the other one is just in general, whether it’s trade discussions going back and forth between the US and China related to different AI products. But I’d say that is at least become more normalized now for us, we see the demand and fluctuations, but you know, for us there’s, you know, whether it accelerates from a restriction perspective or it loosens, I think we’re ready to kind of balance that. It’s not a, not a dynamic that has a huge impact on what we’re looking at today.
Joe Moore (Equity Analyst)
Okay, great. Thank you. Thank you. And at this time, I’m showing no further questions. I would like to turn the call back over to, to Kevin for closing remarks.
Kevin Engle (Chief Executive Officer)
Thank you. Now for a recap of our key messages. Amcor delivered a strong start to the year, achieving record first quarter revenue of $1.68 billion, up 27% year on year with growth across all markets. Utilization is improving even as material supplies are constrained in the industry. Over the past couple quarters, we have been preparing for growth in our advanced packaging portfolio. We are ready to Support a strong Q2 key product ramps are coming in the second half of the year. Our footprint is expanding to meet customer needs going into 2027 and beyond. Thank you for joining the call today and we look forward to seeing you at our Investor Day. Goodbye.
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