Raise PO and reiterate Buy; prices set to rise

研报英文原文证据摘录

Raise PO and reiterate Buy; prices set to rise

Short-term view

• We expect a 2Q OP loss of ¥1.7bn, broadly in line with company guidance of a

¥2.4bn loss. We expect 3Q guidance to indicate an OP loss of ¥2.0-3.0bn. Yen

depreciation, a recovery in demand for 200mm wafers and higher prices should

support earnings. We do not expect a surprise.

• While semiconductor demand is improving and aggressive fab expansion plans

continue to be announced, silicon wafer capacity expansion investment for 2025-26

has declined significantly, increasing the likelihood of supply tightness emerging by

2028. That said, we expect additional supply from Chinese competitors to have

some impact and therefore assume a more conservative 10% price increase.

• On February 19, 2026, SUMCO announced that Formosa SUMCO Technology would

become an equity-method affiliate. Its ownership stake will be reduced from 43.2%

to 38.0%. We expect earnings to be recognized via equity-method investment

income from 3Q. While spot prices for both 300mm & 200mm wafers are expected

to rise, the benefit should be reflected in improved equity-method earnings.

• According to the company, capex is expected to be ¥50bn in 2026 and ¥50-70bn in

2027. Depreciation expense is expected to be ¥130-140bn in 2026, while the 2027

level is expected to fall between the 2025 level (¥116.8bn) and the 2026 level.

o On 27 Mar 2026, the company revised its 300mm wafer supply plan,

cutting investment from ¥225bn to ¥58bn and significantly reducing

capacity expansion; low capex levels are expected near term.

Medium/long-term view

• Increased production of 300mm wafers by Chinese companies and rising market

share of Chinese semiconductor firms using domestic 300mm wafers are factors