Supply chain reporting yesterday. Amkor (packaging) reported revenue +27% YoY and Cadence (chip design) revenue of +19% YoY and a record backlog. Elsewhere, POET stock was down 50% (!!!) on a Marvell order cancellation. Ouch. Last but not least, OpenAI. Sam is untethering from Microsoft, plus a WSJ piece on missed targets ahead of the IPO. Lots to get into.
— Austin & Vik
Record Q1s from Amkor and Cadence
Amkor reported a record Q1 yesterday.Q1 net sales of $1.685B, up 27% YoY. Advanced packaging is now 89% of revenue ($1.37B). Gross margin expanded to 14.2% from 11.9% a year ago. If you’re new to semiconductor manufacturing… yeah, OSAT margins are low, but improving as packaging gets more complex.
On the spend: 2026 CapEx guided to $2.5–$3.0B, with 65–70% going to the Arizona facility ($7B program backed by a $400M CHIPS grant and $2.8B in tax credits). HDFO (High Density Fan-Out) for datacenter CPUs ramps in Q2. From the call: “material supply constraints (advanced silicon, memory, substrates) causing nonlinear loading and potential revenue pushouts.”
Austin: Amkor in AZ makes a ton of sense as an American HQ advanced packaging arm for TSMC AZ. And hey, if Intel Foundry gets crazy busy, Amkor can do EMIB too and take some overflow capacity.
Also, datacenter CPU packaging is normally not an exciting topic for investors… but it is now. Server CPU chiplet counts keep rising, and advanced packaging keeps getting more complex. Check out Amkor’s roadmap:
OSAT gross margins look razor-thin next to a foundry like TSMC, but Amkor is climbing the packaging-complexity ladder and margin should follow.
Lastly, the substrate bottleneck call-out reads through to Japanese ABF suppliers like Ibiden and Shinko.
Design side, same picture. Cadence reported Q1 revenue of ~$1.5B (+19% YoY) with a record $8B backlog. IP +22%, Core EDA +18%, System Design & Analysis +18%. Per the call, EDA’s share of customer R&D has moved from ~7% historically to ~11% currently, and is expected to expand further with new agentic design tools.
Cadence also signed its largest-ever IP deal at a 2nm node. Per CEO Anirudh Devgan: “one of the largest ones at a leading global foundry... a new advanced node, more specifically 2-nanometer.” Presumably TSMC, given that Anirudh used explicit 18A/14A terminology on the call, too.
2026 revenue guide raised to $6.125–$6.225B.
Austin: EDA’s share of R&D jumping from 7% to 11% is thought-provoking. Was that number capped all along by the number of design engineers companies could hire? If yes, agentic EDA removes the cap, and that number could go even higher. Recall what Jensen said on the Dwarkesh Podcast the other day:
JH: “It’s very likely that the number of instances of Synopsys Design Compiler is going to skyrocket, along with the number of agents using the floor planners, our layout tools, and our design rule checkers. Today we’re limited by the number of engineers. Tomorrow, those engineers are going to be supported by a bunch of agents. We’re going to be exploring the design space like you’ve never seen before, and we’re going to use the tools that we use today.”
POET -50% on a Marvell order cancellation
POET Technologies plunged ~50% intraday Monday (closing $7.95, after-hours $7.23) after Marvell cancelled all POET purchase orders tied to its Celestial AI subsidiary. Gaetano sums it up well on X:
Austin: Pump and get dumped?
OpenAI: a multi-cloud announcement and a WSJ piece
Two OpenAI items hit on Monday. Sam Altman tweeted that OpenAI is now free to ship across all clouds; Microsoft remains the primary cloud, keeps revenue share through 2030, and keeps product access through 2032. Later in the day, the WSJ reported that OpenAI missed internal targets for ChatGPT users and revenue, that CFO Sarah Friar has raised concerns about the company’s ability to fund its $600B in compute commitments, and that the board has been scrutinizing data-center deals more closely. Yet the same article has a rebuttal joint statement from Altman + Friar: “We are totally aligned on buying as much compute as we can and working hard on it together every day.”
Austin: Microsoft is a fantastic partner to take a coding agent to market with. Microsoft has GitHub, too. If I’m Dario, I’m continuing to press in here and take advantage of Claude’s coding momentum.
On the CFO skepticism… CFOs are supposed to ask the hard questions. That’s their job. Especially heading into an IPO, there’s a unit economics story that needs to be told much better than Sam did with Brad Gerstner last October. Sounds like Friar and the board are double-checking Altman, which is expected.
