Semiconductor OSAT stocks

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777

Thoughts on stocks like AMKR.and.ASX?

OSAT = Outsourced Semiconductor Assembly and Test
 
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The bottleneck in semiconductor capacity is in wafer manufacturing, not in assembly and test. Which is why companies like Amkor do not really profit from the current market upheaval.
 
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HobbyTrading said:
The bottleneck in semiconductor capacity is in wafer manufacturing, not in assembly and test. Which is why companies like Amkor do not really profit from the current market upheaval.
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Thank you.

If inflation runs hot for two or more years, how do you see that affecting these stocks?
 
wafer fab requires a very heavy investment & operating cost is very high.



assembly and test require relatively low investment.
the operating cost is just a tiny fraction of the wafer fab operating cost.
It is relatively easy to expand the operation and can be done in many countries.


definitely, when the wafer fab operation expands, assembly and test operation will also expand.


but don't expect a spectacular performance from semiconductor assembly and test stocks.
 
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777 said:
If inflation runs hot for two or more years, how do you see that affecting these stocks?
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Inflation? You and I don't go to shops to buy semiconductors and complain that the prices are increasing. What you do do is to buy stuff which contain semiconductors (phones, cars, computers, fridges, etc). Will you buy less of those due to inflation? That's the question you'll need to answer, and I don't have the answer to that.
 
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maxinger said:
wafer fab requires a very heavy investment & operating cost is very high.
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Indeed. And it is a slow process: building a new fab, installing all equipment and get it running profitably takes easily 2 ~ 3 years. Invest a few $B today, and have a suitable location already available, and the wafers start coming out in Q4 2023, or early 2024.
Building back-end capacity (assembly&test) is much faster and thus can respond quicker to changes in front end capacity.
 
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777 said:
@maxinger and @HobbyTrading are giving me quite and education. Thank you!

Do either of you have thoughts specially on Amkor (AMKR)?
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You're welcome. I used to work in the semiconductor industry (not anymore though). My comments in this thread are based on that work experience.
I have no thoughts on Amkor specifically.
 
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