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# Amkor Expects $1.9 Billion In Customer Prepayments Within A Year As Capital Spending Drains Free Cash Flow
- URL: https://www.bullished.co/amkor-expects-1-9-billion-in-customer-prepayments-within-a-year-as-capital-spending-drains-5c2f919f/
- Published: 2026-10-27T19:11:11.000Z
- Updated: 2026-10-27T19:11:11.000Z
- Description: Customer advances are becoming a second funding source for Amkor's $2.5 billion build-out, alongside debt, as nine-month free cash flow stays negative.
- Author: Matteo Parrino
- Tags: SEC Filings, AMKR, Industry: Technology

[Amkor Technology](https://www.bullished.co/tag/amkr/), which provides outsourced semiconductor packaging and test services, now expects about [$1.9 billion of customer advance payments](https://www.sec.gov/Archives/edgar/data/0001047127/000104712726000052/amkr-20260930.htm?ref=bullished.co) over the next 12 months, according to its quarterly report filed Tuesday. Three months earlier the company had guided to about $300 million over two years, and it is spending far faster than it earns: free cash flow for the first nine months was negative $319.1 million.

## From $300 million to $1.9 billion

The [prior quarter's filing](https://www.sec.gov/Archives/edgar/data/0001047127/000104712726000046/amkr-20260630.htm?ref=bullished.co) projected about $300 million of advances over two years, all requiring standby letters of credit, which are bank guarantees backing the customer's money. The new filing says only $200 million of the $1.9 billion will need one.

In October, Amkor also signed an advance payment agreement with a customer covering about $1.3 billion expected in 2027\. The earlier filing had cited a $1.5 billion agreement for 2027.

Contract liabilities, which hold customer money received ahead of work, rose to $547.6 million at September 30 from $393.0 million at June 30 and $390.8 million at the end of 2025.

## Capital spending outruns cash flow

Amkor spent $1,236.8 million on capital projects in the first nine months, against $472.5 million a year earlier, mostly on advanced packaging and test equipment and its Arizona facility. Operating cash flow rose to $868.3 million from $451.1 million, but free cash flow came in at negative $319.1 million, versus negative $13.2 million a year before.

Construction contract commitments rose to $1,951 million from $991 million. The company expects about $2.5 billion of capital spending for 2026.

Total debt stood at $2,467.2 million after a $1.15 billion convertible note sale in May. Amkor also repurchased 0.7 million shares for $32.3 million during the nine months.

## Sales flat, margins wider

Third-quarter sales edged up 0.2% to $1,990.6 million as communications sales fell 28%, which the company attributed to timing of moving system-in-package programs from Korea to Vietnam. Computing and automotive and industrial sales each grew 37%. Gross margin rose to 18.3% from 14.3% a year earlier.

Amkor shares rose about 7% to $39.37 in Tuesday trading, for a market value of $9.1 billion.

Whether the roughly $1.9 billion arrives on schedule will show up in contract liabilities in the next quarterly report.

### Sources

- [10-Q Filing — Amkor Technology (AMKR)](https://www.sec.gov/Archives/edgar/data/0001047127/000104712726000052/amkr-20260930.htm?ref=bullished.co) — SEC EDGAR
- [10-Q Filing — Amkor Technology (AMKR), Q2 FY2026 filed 2026-07-28 (comparison basis)](https://www.sec.gov/Archives/edgar/data/0001047127/000104712726000046/amkr-20260630.htm?ref=bullished.co) — SEC EDGAR
- [Earnings release (8-K Item 2.02, amkr9302026erex-991.htm) — Amkor Technology, filed 2026-10-26](https://www.sec.gov/Archives/edgar/data/0001047127/000104712726000049/amkr9302026erex-991.htm?ref=bullished.co) — SEC EDGAR
- [These Analysts Slash Their Forecasts On Amkor Technology After Q3 Results](https://www.benzinga.com/analyst-stock-ratings/price-target/26/10/62619380/these-analysts-slash-their-forecasts-on-amkor-technology-after-q3-results?ref=bullished.co) — benzinga.com
- [Amkor Technology: Q3 Earnings Snapshot | 9news.com](https://www.9news.com/article/syndication/associatedpress/amkor-technology-q3-earnings-snapshot/616-591c006a-eff2-4e4a-8d42-0c24683b864a?ref=bullished.co) — Associated Press
- [Is Amkor Technology (AMKR) Undervalued Following Mixed Q3 Results And Weak Guidance?](https://finance.yahoo.com/markets/stocks/articles/amkor-technology-amkr-undervalued-following-060847896.html?ref=bullished.co) — Yahoo Finance
- [Amkor inks dozen customer deals for Arizona packaging plant - Phoenix Business Journal](https://www.bizjournals.com/phoenix/news/2026/10/26/amkor-third-quarter-financial-results.html?ref=bullished.co) — bizjournals.com
- [Amkor Q3 Earnings Call Highlights AI Growth and Capacity Expansion](https://finance.yahoo.com/technology/ai/articles/amkor-q3-earnings-call-highlights-101700845.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance

### More on Amkor Technology

- [Amkor CEO Says Slower 25% Computing Growth Was Not About Supply — A 300-Step Line Takes Time To Fill](https://www.bullished.co/amkor-ceo-says-slower-25-computing-growth-was-not-about-supply-a-300-step-line-takes-time-2ec2b598/)
- [Amkor Has Signed A Dozen Customers To Advance Payments As 2027 Capex Climbs](https://www.bullished.co/amkor-has-signed-a-dozen-customers-to-advance-payments-as-2027-capex-climbs-76a88bf4/)
- [Amkor's Third-Quarter Profit Climbs To $191 Million On Wider Margins, But Sales Stay Flat](https://www.bullished.co/amkors-third-quarter-profit-climbs-to-191-million-on-wider-margins-but-sales-stay-flat-1bce5c3d/)

[All Amkor Technology (AMKR) coverage →](https://www.bullished.co/tag/amkr/)