Amkor Technology Inc. (NASDAQ: AMKR), a leading provider of semiconductor packaging and test services, experienced a pre-market plunge of 16.69% on Monday, October 29, 2024. This steep decline came after the company reported mixed financial results for the third quarter of 2024 and provided a weaker outlook for the current quarter.

Headquartered in Tempe, Arizona, Amkor Technology is a key player in the global semiconductor supply chain, offering advanced packaging solutions and testing services to chip manufacturers and designers. The company's services are crucial for a wide range of end markets, including communications, consumer electronics, computing, automotive, and industrial applications.

For the third quarter, Amkor posted revenue of $1.86 billion, a 27% sequential increase and a 2.2% year-over-year rise, driven by strong demand for its advanced packaging services, particularly in the communications and consumer segments. This figure beat analysts' estimates of $1.84 billion. However, the company's earnings per share (EPS) of $0.49 missed analysts' expectations by a penny, coming in at $0.01 below the consensus estimate of $0.50.

The real disappointment came from Amkor's guidance for the fourth quarter of 2024. The company expects revenue in the range of $1.60 billion to $1.70 billion, lower than analysts' estimates of $1.84 billion. Additionally, Amkor forecasts gross margin of 13.5% to 15.5% and net income of $70 million to $110 million, or $0.28 to $0.44 per diluted share, suggesting further declines in profitability compared to Q3 2024 and the year-ago period.

Amkor's weaker-than-expected guidance and profit outlook appear to be the primary drivers behind the sharp sell-off in its shares. The company has been grappling with rising material costs and margin pressure, with gross margin declining to 14.6% in Q3, down from 15.5% a year ago. Additionally, operating margins contracted to 8.0% from 9.1% in the same period last year, further impacting profitability.