Long-term strategic position is enhanced: LTAs with deserved profitability and planned expansion till 2030F or beyond; favorable EMIB-T risk-reward

研报英文原文证据摘录

Long-term strategic position is enhanced: LTAs with deserved profitability and planned expansion till 2030F or beyond; favorable EMIB-T risk-reward

Global Markets Research

Unimicron Technology 3037.TW 3037 TT 29 July 2026

EQUITY: HANDSETS

RatingLong-term strategic position is enhanced Remains Buy

Target priceLTAs with deserved profitability and planned expansion Increased from TWD 1,400.00till 2030F or beyond; favorable EMIB-T risk-reward TWD 1,350.00

Action: reiterate Buy with a higher TP of TWD1,400, implying ~104% upside Closing29 July 2026price TWD 688.00

In 2Q26 earnings meeting, Unimicron management highlighted its discussions for long-term

agreements (LTAs) for future ABF substrate capacity expansion and the technological roadmap Implied upside +103.5%

with multiple strategic customers has been extended till 2030 or beyond. In light of the rising

importance of ABF substrates in advanced AI chips, we believe the management-agreed 50%- Market Cap (USD mn) 33,728.6

60% long-term GM for ABF substrate, eyeing the typically high GM for advanced semi ADT (USD mn) 814.9

materials for ABF substrates, is deserved, if substrates can deliver their unique value amid AI

technology upgrades. Unimicron shared details about EMIB-T, which brings better total costs Relative performance chart

than CoWoS, despite a more complex design on substrates. We believe EMIB-T is favorable

for substrate companies’ technological advancements, with manageable risk-rewards, as

the downside risks are protected by strategic customers’ LTAs. We reaffirm our Buy thesis for the

company. We raise our GM assumptions by 1.9-5.5pp for 2026-28F to reflect the stronger

profitability from ABF substrates (we lift our ABF substrate’s GM assumption to 50-55% by

2028F, in line with management’s comment, vs.