Nvidia lifts Amkor agreements to $3 billion, on commitments it can still change
Nvidia named Amkor one of six suppliers in its October 21 capacity release, taking their multi-year agreements to $3 billion. Nvidia's own filing says commitments of this kind can be canceled before firm orders; the factories in Arizona and Gwangju cannot be.
Vincent Jiang · 2 min read
Gwangju broke ground first; Berlin signed two days later
On October 19, Amkor Technology+4.32% — Amkor Technology, up 4.32 percent today broke ground on its Gwangju plant expansion in South Korea: 3 trillion won through 2031, more than 2,000 new hires, and 2 trillion won above the first plan 1. Two days later at Nvidia's+1.94% — Nvidia, up 1.94 percent today GTC Berlin event, Nvidia named Amkor one of six supply chain partners and backed a more than 300% rise in Amkor's interposer wafer capacity, the connecting layer inside AI chip packages, by the end of 2028 2. Amkor's multi-year agreements with Nvidia in Arizona and South Korea now total $3 billion 3.
The $279 billion sentence Amkor lives inside
Nvidia's latest quarterly filing shows $279 billion of supply and capacity commitments as of July 26, up from $119 billion a quarter earlier 4. The same filing says some agreements "can be canceled, rescheduled or changed before firm orders," and warns Nvidia "may be unable to reduce these commitments" if demand falls short 4. Amkor took a $1.5 billion prepayment from Nvidia in July 5. The rest is reservations against factories whose estimates keep growing: Peoria, Arizona has climbed from about $2 billion to $12 billion 5.
Three customers, one back end
Apple+1.53% — Apple, up 1.53 percent today said on October 20 it will be one of Peoria's first customers 6, and TSMC+0.59% — TSMC, up 0.59 percent today holds a 10-year packaging agreement with Amkor 7. TSMC is separately paying GlobalFoundries $2 billion to make interposers 7, so two customers now fund the same bottleneck. Amkor's gross margin hit 16.8% last quarter from 12% a year earlier, against 2026 capital spending of $2.5 billion to $3 billion 7. If reservations never become firm orders, the new lines belong to Amkor, at that margin.
Amkor's 4x packaging target ranks behind only SPIL's optics in Nvidia's plan
- Estimate
Data
| Value | |
|---|---|
| SPIL optical engines, mid-2027 (estimate) | 15x |
| Amkor interposers, end-2028 (estimate) | 4x |
| Substrates, 3 years (estimate) | 2.5x |
| Chip testing, 2026 to 2027 (estimate) | 2x |
Amkor's gross margin runs from 12% to 16.8%: a utilization dial, not a pricing one
Data
| Gross margin | |
|---|---|
| Q3 '23 | 15.5% |
| Q4 '23 | 15.9% |
| Q1 '24 | 14.8% |
| Q2 '24 | 14.5% |
| Q3 '24 | 14.6% |
| Q4 '24 | 15.1% |
| Q1 '25 | 11.9% |
| Q2 '25 | 12% |
| Q3 '25 | 14.3% |
| Q4 '25 | 16.7% |
| Q1 '26 | 14.2% |
| Q2 '26 | 16.8% |
The tape argues with the targets
The bullish camp has voices: Jensen Huang says "Demand is extraordinary. Capacity is the constraint" 2; eleven brokers rate AMKR with no sells and a $76.40 consensus target 8; a Stocktwits poster calls the pullback an accumulation setup 9. The stock fell 14.86% in the week to October 16, closing at $41.82, a 60-day low 8. Third-quarter results land on Monday, October 26, with consensus at about $0.78 a share on $2.041 billion of revenue 8. The tell is utilization guidance, because AMKR holders own utilization, not demand.
More about NVIDIA
NVDA · Fiscal Q2 2027Revenue rose 106% to $96.2B, 92.5% of it from Data Center, “driven by the ramp of our Blackwell Ultra infrastructure”. Gains on equity stakes of $7.8B lifted net income to $59.7B.
Show as a table
| Line | Value |
|---|---|
| Revenue | $96.2B |
| Gross margin | 75.0% |
| Operating margin | 66.2% |
| Net income | $59.7B |
| Hyperscale | $48.7B |
| AI clouds & enterprise | $40.3B |
| Data Center | $89.0B |
| Edge Computing | $7.2B |
| Gross profit | $72.1B |
| Cost of revenue | $24.1B |
| Other income | $7.8B |
| Operating income | $63.7B |
| Operating expenses | $8.4B |
| Tax | $11.8B |
| R&D | $7.1B |
| SG&A | $1.4B |
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