J.P. Morgan Taiwan FTM 11 Jun 26 Largan Precision Co Ltd; TSMC; Asian Semis; Foundries; Taiwan Financials and More

Research evidence excerpt

J.P. Morgan Taiwan FTM 11 Jun 26 Largan Precision Co Ltd; TSMC; Asian Semis; Foundries; Taiwan Financials and More

Asia Pacific Equity Research

Taiwan First to Market 11 June 2026

Top Stories

| Largan Precision Co Ltd (William Yang) (3008 TT, N)

Downgrade to Neutral; As good as it gets

After Largan’s 50% share price rise in the past 1M (45% outperformance vs Taiex), we downgrade to Neutral, as we think the

company’s growth potential from variable aperture lens upgrade and solid iPhone demand has been priced in, and the market

has somewhat turned too positive on its co-packaged optics (CPO) progress. Longer term, we still like the company’s efforts

into CPO, as this is a new addressable market for Largan and would require Largan’s expertise in precision requirements.

However, we think there are still uncertainties on how Largan could turn this opportunity into real earnings (at least not in the

next 1-2 years, in our view) given the high competition and the incompatibility of Largan’s FAU product with the current chip

design ecosystem; we suggest waiting on the sidelines for more concrete progress. Our new 2026E/27E EPS are still 7%/5%

above BBGe due to better iPhone demand estimates, but we think valuation would become demanding for further re-rating

(currently already trading at 20x 12M fwd P/E, above historical avg. of 16-17x) as CPO is at least 1.5-2 years away for Largan.

TSMC (Gokul Hariharan) (2330 TT, OW)

May sales on track to reach high end of 2Q26 guidance; tightness in leading-edge capacity persists

TSMC reported May sales of NT$416.9bn, up 30% YoY and 1.5% MoM, reaching ~66% of JPMe and Bloomberg consensus for

2Q26. While April-May tracked a little bit below usual trends, we are confident that the company is on track to reach the high