A：The highlights of Amcor's third quarter 2025 earnings include revenue of $1.99 billion and EPS of 51 cents, exceeding the high end of guidance. Revenue increased 31% sequentially driven by robust demand for advanced packaging and record production ramps in both the communications and computing end markets.

A：For the fourth quarter, communications revenue is expected to be up more than 20% year on year, driven by continued strength in Androids and modest sequential decline in Q4 on product mix changes in computing revenue. AI expansion into Edge devices is expected to drive future demand for advanced packaging.

A：The new advanced packaging and test campus in Arizona represents a milestone with the groundbreaking earlier this month. The campus will be a cornerstone of US semiconductor manufacturing and is expected to include 750,000 square feet of clean room space and create up to 3,000 high-quality jobs. Phase 1 construction is expected to be completed in mid-2027 with production beginning in early 2028.

A：Amcor's geographic expansion with facilities in Asia, Europe, and the US is significant as it allows the company to partner more closely with customers and deliver innovative packaging and test solutions aligned with their technology roadmap needs.

A：The performance and financial outlook of Amcor's third quarter were better than expected with revenue of $1.99 billion, representing 31% sequential growth and 7% year-on-year growth. All end markets grew sequentially, profitability metrics expanded, gross profit was $284 million with a margin of 14.3%, operating income was $159 million with a margin of 8%, and EBITDA was $340 million with a margin of 17.1%.

A：To optimize the manufacturing footprint in Japan, the company is aligning factory capacity with market demand to ensure supply for a broad portfolio of automotive products. They are also working with customers to reduce manufacturing costs and adjust terms to cover costs for underutilized production lines. These actions are expected to begin showing results in Q4 2025, with additional adjustments taking effect in the first half of 2026. The company expects to improve corporate gross margins by around 100 basis points by exiting 2027.

A：To enhance liquidity for upcoming investments, particularly for the Arizona campus, the company took several steps. They replaced a $600 million Singapore-based revolver with a new $1 billion U.S. based revolver, executed a $500 million term loan, issued $500 million of senior notes due in 2033, andredeemed $525 million of senior notes due in 2027. As of September 30th, they held $2.1 billion in cash and short-term investments, with total liquidity at $3.2 billion and total debt at $1.8 billion, resulting in a debt to EBITDA ratio of 1.7 times.

A：For the fourth quarter, the expected revenue range is between $1.775 and $1.875 billion, representing an 8% sequential decline at the midpoint and a 12% year-on-year increase. The forecast includes double-digit percentage year-on-year growth for both advanced and mainstream segments. Gross margins are projected between 14% and 15%, factoring in an anticipated benefit from asset sales of around $30 million year over year. Higher material content products and higher manufacturing costs are constraining gross margins as the company scales and invests in leading edge advanced packaging. Operating expenses are expected to be around $120 million, and the full-year effective tax rate is anticipated to be around 20%.

A：The updated 2025 CapEx forecast has increased to $950 million from $850 million to support expanded investment in the Arizona campus. The investments focus on scaling capacity and capabilities for leading edge technologies such as high density fan out, advanced Sip, and test solutions. Further details on CapEx spend levels and timing for the new Arizona facility will be provided when the company issues 2026 CapEx guidance at its next earnings call.

A：The impact of the asset sale on the fourth quarter's gross margin guidance is a reduction by 160 basis points, which puts it below expectations. This is primarily due to higher material content in Q4 compared to the prior year. The significant drop in material content last year due to a semiconductor shortage contributed to the margin improvement in the prior year's quarter.

A：The company's outlook for the communication segment in the fourth quarter indicates a slight decline, with continued strength in the Android ecosystem which is reflected in the guidance. There is a slight tapering off in the iOS ecosystem, but it's difficult to predict the exact impact on the end product outlook since the company is relatively deeper in the supply chain.

A：The company is starting to ship the first products using high-density fan-out technology in the current quarter and has more products lined up with the same customer and an external party. This technology is seen as a solid foundation for future growth, presenting opportunities for AI networking and the utilization of new products with the first tranche of coaz s capacity.

A：In the HAD segment, the outlook is positive with a strong potential pipeline and a review with customers signaling encouraging trends for future product releases. In the consumer segment, there's a predicted sequential decline due to a change in the product portfolio, but the company is encouraged by new products being launched and expects a correction and further slowdown of the existing product.

A：The system and package pipeline, specifically the socket on the communication side, is performing as expected with a ramp into quality assurance (QA) and quality control (QC). The full-year outlook for this socket ramp is in line with expectations shared in February. On the consumer side, there's a forecasted sequential decline in end products due to a change in the product portfolio, but the company is optimistic about new products launching and expects a correction and further slowdown of the existing product.

A：Higher manufacturing costs, which are attributable to leading-edge advanced technology, and unfavorable product mix are constraining the flow-through in the Q&A growths margin year over year. The increase in manufacturing costs is due to higher overhead and capital expenditures needed to support these advanced technologies, which are expected to scale well into 2026 and not be a headwind. The unfavorable product mix is related to the decline in peak material content, which is expected to be around 100 basis points compared to last year's decline of over 300 basis points, primarily due to a more stable SiP and a return to a more normal seasonal pattern.

A：The increase in investment in Arizona reflects the growing interest in US manufacturing, driven by multiple customers. This interest is leading to investments not only in scale for silicon manufacturing in the US but also in advanced packaging. The company is closely working with lead customers and a foundry partner to scale capacity in line with their demand, which justifies the significant investment. The investment is happening in phases, with the scale-up driven by real market demand, and is expected to be justified given the increased interest in US manufacturing and the alignment with the required capacity for the semiconductor business.

A：The recovery of the mainstream portfolio has been positive, with the second quarter reaching a trough and showing improvement into the third quarter, which is expected to continue into the fourth quarter. This is due to a reduction in inventory in the supply chain leading to a more balanced ecosystem. The automotive market is benefiting from advanced packaging, which is expected to increase and drive growth due to the proliferation of ADAS functionality and further electrification, moving more driving functionality and connectivity into cars. The company is well-positioned in this area, working with leading semiconductor companies in the ADAS function and has a strong opportunity pipeline.

A：The baseline for the expected 100 basis point gross margin improvement by next year is set using the Q3 results as the reference point, as benefits from restructuring are expected to begin moving into the fourth quarter. The restructuring in Japan is expected to fully impact the gross margin by the end of 2027, and the associated costs are in line with the company's standard activity when managing rationalizations in Japan, supporting mainly an automotive customer base.

A：The advanced packaging sector is showing some pockets of tight supply, with lines filling up significantly, particularly in the flip chip portfolio and some wafer level packaging. There are also limitations in certain areas like substrates, and suppliers are being closely worked with to ensure a continued supply base.

A：It is difficult to predict the impact of tariffs on the smartphone business and whether the current strength is pull forward related. Emphasizing their confidence in their position in the market, they see an increased evaluation of next generation products that will enable future smartphones with more AI functionality and potentially increase semiconductor content, but they cannot share specific predictions at this moment.

A：S Connect represents a product equivalent to CO integration. The company is working closely with their foundry partner to ensure a complementary supply chain and is currently focusing on high-density fan-out equivalent of CO integration. They are evaluating the on-substrate part of the technology in Asia and ensuring a complementary supply chain in the US. They believe the computing market offers multiple opportunities and are working closely with customers and foundry partners on different technology domains.

A：The seasonality for Amco in the past and now is largely driven by exposure to the communication market, which shows strong seasonality. However, the product launches related to high-density fanout are expected to show significantly less seasonality and more growth in the compute domain, which will help to level out the communication market's seasonality. Despite this, communication will remain the biggest segment for the time being.

A：The increased investment in the new facility in Arizona is exclusively related to the increased capacity being planned. Moving the factory closer to TSMC provides additional land area for potential future expansion. The investment is not related to higher costs but to capacity expansion. The CapEx for 2025 was increased to $950 million, which is driven by more visibility on future spending. A guide for CapEx in 2026 will be provided at the next earnings call, along with timing and expenses for the Arizona facility.

A：A significant portion of the company's CapEx is directed towards the expansion of high-density fanout RDL technology. A large part of capital investments in equipment is fungible between standard and high-density fanout. The ramp for this technology is expected to begin in the early part of the year with significant commitments to customers. This technology will benefit the data center, PC, and mobile communication segments.

A：The key drivers of computing growth include broad-based strength across applications such as PCs, networking, and data center products. This strength is expected to continue into the next quarter, with strength anticipated in both consumer products like PCs and networking and data center products.

A：The company believes there is a positive trend in the Android market, with a shift towards higher-end devices for premium tier smartphones. There was inventory in the supply chain last quarter, but it is believed that this inventory has been digested. Consequently, the company is very positive about the Android players and the persistence of this strength into the next quarter.