Surfing the AI wave

Research evidence excerpt

Surfing the AI wave

Macquarie Equity Research Alpha HPA

Investment thesis

Alpha provides direct

exposure to the AI thematic • After a period of research restrictions, we are at Outperform and a price target of $1.05/

sh. Alpha is one of very few Australian-listed companies to provide direct exposure to the

semiconductor industry with its high purity alumina (HPA) product now an input into the

production of advanced semiconductor packaging and in use across wafer polishing (semi

tooling also prospective). Thermal management on AI accelerator chips is a key thematic

as rising compute & power throughput increase latent heat generation in chipsets. Using

HPA as an input material to packaging composites is emerging as a solve for this with

Stage 2 commissioning superior thermal conductivity properties vs incumbent silica-based products. Alpha's

targeted for CY27 HPA product in particular possesses unique characteristics (non-detect radiation emission)

which are a competitive advantage at the bleeding-edge of AI compute and semiconductor

manufacture. This technology advantage is no accident and a result of the company's

novel/low-cost manufacturing process, lending it a significant moat in our view.

• Alpha is building the Stage 2, commercial-scale (10kt pa) HPA plant in Gladstone, QLD,

with target commissioning in CY27. Product marketing to secure demand for the facility

continues in parallel, with ~69% of nameplate capacity under LOI and a number of binding

sales agreements from stage 1 signed. Aside from the semiconductor end market, Alpha

has cultivated customer relationships across a variety of industries incl minerals (HPA in

direct lithium extraction), batteries/EVs (alumina nitrate salts for anode coating & EV-