Semiconductor/Tech Materials: Feedback from meetings with European and US investors

研报英文原文证据摘录

Semiconductor/Tech Materials: Feedback from meetings with European and US investors

utsourcing

expands among customers that previously used in-house testers. During the Apr-Jun

results briefing, we want to see the latest trends in CPU testers and whether management

raises its SoC tester TAM outlook.

• Nittobo (3110; Overweight): Interest among US and European investors is generally

high, and there was much discussion of the reasons behind the stock’s recent weakness

and catalysts for a turnaround. Reasons for the stock's upside resistance may include (a)

management’s denials of additional price hikes this fiscal year, (b) concerns about a

loosening supply-demand balance (intensifying competition) for T-glass, (c) the impact

of the emergence of PTFE on the growth outlook for NE/NER-glass, and (d) a lack of

near-term catalysts. First, regarding the first and fourth factors, we think the TAM for

T-glass could expand further with the spread of multi-layer-cores (MLC) and applications

such as DDR for AI, and management could soon announce major investments to meet

demand in FY2028 onward (our main scenario is the Jul-Sep quarter; management has

already announced plans to triple T-glass production capacity by end-FY2027 compared

with the amount at end-FY2023). We expect the announcement to include price hikes to

cover the increased investment costs. Regarding the second factor, talk of competitors’

moves into the business might continue, but improving yield takes time (it took several

years even for Nittobo with its high technological capabilities), so we think any near-term

catch-up will be limited. The third factor needs to be closely monitored, but there is also

talk of PTFE + NER-glass, which could be viewed as an expansion of new opportunities.