Applied Materials and Amkor Technology are both benefiting from AI-driven semiconductor demand, but they operate at different stages of chip production and carry distinct risks. Applied Materials manufactures equipment for chip factories and reported FY 2025 revenue of $28.4 billion（約4.5兆円） with a net margin of 24.7%, but faces export control exposure and recently paid $252 million（約400億円） to settle export violation claims. Amkor provides assembly and testing services with FY 2025 revenue of $6.7 billion（約1.1兆円） and a net margin of 5.6%, but depends heavily on a few major customers—Apple and Qualcomm represent 40.9% of revenue. While both stocks have surged on AI enthusiasm, Amkor trades at lower valuation multiples (Forward P/E of 34.7x vs. Applied Materials' 49.5x) and may offer better value for investors.
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Applied Materials reported FY 2025 revenue of $28.4 billion（約4.5兆円） (up 4.4% year-over-year) and net income of $7.0 billion（約1.1兆円）, while Amkor Technology posted FY 2025 revenue of $6.7 billion（約1.1兆円） (up 6.2%) and net income of $373.9 million（約600億円）. Both companies are benefiting from AI-driven demand: Applied Materials anticipates its semiconductor equipment business to grow more than 30% this year, and Amkor expects revenue to reach $11 billion（約1.8兆円） by 2030.
Why it matters
Applied Materials manufactures the machinery used to build semiconductor wafers, while Amkor handles final assembly and testing—each filling a critical role in the chip supply chain. However, the companies carry very different risk profiles: Applied Materials faces international export controls and recently settled export violation claims for $252 million（約400億円） in February 2026, while Amkor's top ten customers account for 72% of sales (Apple and Qualcomm alone represent 40.9%), creating concentration risk. For investors comparing the two, Amkor trades at substantially lower valuation multiples (P/S ratio of 2.7x vs. Applied Materials' 17.0x, and Forward P/E of 34.7x vs. 49.5x), suggesting it may offer better value.
What to watch
Applied Materials' debt-to-equity ratio is 0.3x with free cash flow of $5.7 billion（約9100億円）; Amkor's is 0.4x with free cash flow of $191.0 million（約310億円）. Amkor recently finalized a 10-year agreement to expand advanced testing capabilities in Arizona, while Applied Materials signed a new 10-year partnership with Taiwan Semiconductor Manufacturing Company. Both companies posted strong recent quarterly results driven by AI demand, with Applied Materials up 11% year-over-year in Q2 FY 2026 to $7.9 billion（約1.3兆円） in sales, and Amkor up 27% year-over-year in Q1 to $1.7 billion（約2700億円）.
Applied Materials and Amkor Technology operate at distinct stages of semiconductor manufacturing, giving investors two different exposures to the AI-driven chip boom. Applied Materials sits upstream, supplying the complex equipment and software that foundries (chip factories) use to manufacture wafers, while Amkor operates downstream, providing the assembly and testing services that turn raw silicon into finished, packaged chips ready for deployment. This structural difference shows up starkly in their financial profiles: Applied Materials is highly profitable with a 24.7% net margin and generates $5.7 billion（約9100億円） in annual free cash flow, reflecting the premium pricing power of essential manufacturing equipment. Amkor, by contrast, operates at a 5.6% net margin in a more commoditized service business, though its recent revenue growth of 6.2% outpaced Applied Materials' 4.4%.
Both companies are riding the AI wave, but with different near-term trajectories. Applied Materials is guiding for semiconductor equipment business growth of more than 30% this year, supported by a freshly inked 10-year partnership with Taiwan Semiconductor Manufacturing Company that aims to lock in its role in advanced AI packaging. Amkor posted 27% year-over-year revenue growth in Q1 and projects full-year revenue will climb from $6.7 billion（約1.1兆円） in FY 2025 to $11 billion（約1.8兆円） by 2030, driven by AI's insatiable demand for advanced packaging solutions. However, the companies face materially different risks. Applied Materials remains exposed to international export controls and regulatory scrutiny—it recently settled export violation claims for $252 million（約400億円） in February 2026, a reminder that its China exposure creates ongoing compliance and geopolitical headwinds. Amkor's vulnerability is more concentrated: its top ten customers represent 72% of sales, with Apple and Qualcomm alone making up 40.9%, so a loss of orders from either customer could substantially damage results. Additionally, Amkor is betting on a 10-year Arizona expansion agreement while navigating CHIPS Act funding requirements and construction hurdles.
On valuation, Amkor trades at a significant discount: its P/S ratio of 2.7x is less than one-sixth of Applied Materials' 17.0x, and its Forward P/E of 34.7x trails Applied Materials' 49.5x by nearly 15 points. This gap reflects both the profitability difference and the market's perception of Amkor as a lower-quality business—a service provider in a more fragmented, lower-margin industry. The valuation spread suggests Amkor may offer better entry value for investors, though Applied Materials' superior financial fortress (0.3x debt-to-equity vs. Amkor's 0.4x, and 2.6x current ratio vs. 2.3x) reflects its structural durability in the AI cycle.
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