J.P. Morgan Taiwan FTM 16 Jun 26 GUC; Alchip Technologies and More

Research evidence excerpt

J.P. Morgan Taiwan FTM 16 Jun 26 GUC; Alchip Technologies and More

Asia Pacific Equity Research

Taiwan First to Market 16 June 2026

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GUC (Gokul Hariharan) (3443 TT, N)

AI CPU expectations rise, Tesla outlook mixed; stay Neutral and raise PT to NT$4400

We raise estimates to reflect upward revisions in GUC’s AI CPU projects (primarily Google Axion) due to strong demand from

agentic AI workloads and increased bundle rates for CPUs. GUC is likely to remain the back-end logistics partner for the next

generation Google CPU project as well, which should drive continued growth into 2028, even though gross margins remain

under pressure. For Tesla, we believe that the AI5 project should be largely handled by GUC with mass production ramp in mid

2027, but AI6 is likely to move back to Samsung Foundry. Future allocation for AI projects is more uncertain, given that Tesla is

engaging TSMC (AI 6.5), Samsung and Intel/TeraFab for this project. While GUC’s revenue outlook remains strong, led by

Google CPUs, we remain Neutral due to (1) continued downward pressure on gross margins due to lower margin CPU

engagement, (2) increasing competition for CPU projects as design service space sees more aggressive pricing, and (3) lack of

any CoWoS-based ASICs in GUC’s pipeline. Key upside risks are (1) upside to Microsoft MAIA projects, especially if GUC is

able to find a role for MAIA400, (2) more clarity on Tesla’s future AI series engagement; while key downside risks are (1) more

competition in ARM CPUs, given the lack of strong moat around this business, especially for Google CPUs, given recent

indications of attempt towards further Foundry diversification; and (2) smaller volume for Tesla AI5, if Samsung’s AI6 project

can ramp up on time.