Taiwan PCB/Substrates "Still at the early innings of a multi-year upcycle" Chang

Research evidence excerpt

Taiwan PCB/Substrates "Still at the early innings of a multi-year upcycle" Chang

Global Research

22 May 2026ab

Taiwan PCB/Substrates Equities

GlobalStill at the early innings of a multi-year upcycle

Technology

Diana Chang

Tailwinds for substrates to strengthen further Analyst

We lift estimates for all three substrate makers to factor in accelerated growth from diana.chang@ubs.com

capacity expansion and stronger than expected pricing amid industry undersupply +886-2-8722 7335

dynamic with meaningful uplift in margins; and raise PTs to factor in more margin upside Randy Abrams

and earnings power expansion. Substrates stocks have rallied on accelerated AI demand Analyst

that are driving pricing and margins to move up, but has taken a breather post Q1 results randy.abrams@ubs.com

and likely factored in concerns on oversupply from capacity expansions. We note that +886-2-8722 7338

most of the major substrate companies are looking to expand capacity by only 20-50%

in the coming years, suggesting further upside risk to pricing has yet to be priced in. We

believe there's still more upside to come in a structurally different cycle driven by AI

which we anticipate much more favourable pricing among imbalance supply/demand

and valuation should drift higher as margins/earnings start to manifest. We lift our PTs

for Unimicron/Kinsus/NYPCB by 94%/70%/52% on earnings upward revisions and

moving from a P/BV-based approach to a P/E-based methodology, reflecting improving

earnings visibility and higher ROE that are expected to be stronger for longer.

Unimicron (Buy, lift PT to NT$1200): We continue to like Unimicron as the clear

technology leader as key suppliers across NVDA GPU and major ASIC platforms. We now

forecast '26/'27/'28 sales to grow 37%/38%/25% YoY (up 4%/13%/13% from prior