Taiwan PCB & Laminates: ABF/BT Sector: GM/pricing Upcycle Underway; Buy with Higher TPs

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Taiwan PCB & Laminates: ABF/BT Sector: GM/pricing Upcycle Underway; Buy with Higher TPs

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30 Jun 2026 10:10:46 ET │ 31 pages

Taiwan PCB & Laminates

ABF/BT Sector: GM/pricing Upcycle Underway; Buy with Higher TPs

CITI'S TAKE

Jack Chen AC

Both ABF and BT substrate demand are rising on AI applications. With rising +886-2-8726-9091

AI GPU/ASIC/CPU demand, we expect the ABF supply tightness to continue jack1.chen@citi.com

throughout 2027 with continued price hikes. For BT, we also see improving

S/D status, given peers’ less willingness in BT production. T glass is likely to Laura (Chia Yi) Chen

still be a constraint throughout 2027, if new capacity ramps slower than +886-2-8726-9090

expected. We expect substrate makers to enjoy GM expansion cycle laura.cy.chen@citi.comevidenced by recent monthly earnings release. We raise TPs of NYPCB (new

TP NT$1,550), Kinsus (new TP NT$1,100) and Unimicron (new TP NT$1,500) Nicholas Lai

and reiterate our Buy ratings. In the short term, we prefer NYPCB and Kinsus +886-2-8726-9093

on more aggressive pricing strategies. We open 30-day upside CWs for

NYPCB and Kinsus on potential sales/GM upbeat on price hikes. nicholas.lai@citi.com

ABF substrate: tight supply evidenced by improving China UTR — Besides rapid

recovery in UTR of non-China capacity, we observe UTR in China ABF capacity is

improving with peers like Zhen Ding announcing further capacity expansion. To note

that, China ABF capacity is the least favorable option to US customers given

geopolitical risk. However, it seems US customers are adopting it given lack of

choices. Meanwhile, domestic AI demand for China is also improving, competing for

capacity as well. Unless there is any sign of loosening demand in China capacity, we