Aspeed Technology (5274.TWO): More Upside in 4Q26 and Beyond

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05 Aug 2026 07:11:45 ET │ 11 pages

Aspeed Technology (5274.TWO)

More Upside in 4Q26 and Beyond

CITI'S TAKE

Thanks to better product mix and benefit from E-glass and substrate

support, Aspeed's 2Q26 GM/OPM at 72%/54% beat ours and Street's

estimates. Net profit of NT$1.84bn (up 30% QoQ, 193% YoY) was also

better than expected. With rising AST2700 in 2H26 and new product cycle

of AST1040 in 1H27 and further price hike in the year end, we see more

upside in 4Q26 and beyond. We view the company's previous 3Q26

guidance conservative and await more positive update.

• New Product Cycle Momentum. We see multiple growth drivers supporting

Aspeed’s next upcycle. Growth is expected to be driven by stronger AI data

center and AI-related general server BMC demand, accelerating AI ASIC

deployments with a major US AI customer, and rising AST2700 adoption.

Management now expects AST2700 shipments to reach 10m units in 2027

from 1.2-1.5m units in 2026.

• Gross Margin Outlook Remains Resilient. 2Q26 GM of 72% was a strong

beat vs. management’s 67–68% guidance, reflecting successful passthrough of higher substrate and OSAT costs. We see upside to

management's previous 3Q26 guidance of revenue at NT$4.1-4.3bn and

see GM remaining stable, supported by resilient customer demand.

• Supply Chain Bottlenecks Continue to Ease. Supply constraints at Aspeed

are gradually improving as E-glass qualification is already complete. We

also expect more back-end capacity support, providing additional backend capacity. With solid demand outlook and better supply, together with

better product mix, we expect upside to Aspeed's BMC revenue and

shipments over the next two years. Maintaining Buy.

Buy

Price (05 Aug 26 15:00)

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Laura (Chia Yi) ChenAC

Michael Hung

Jack Chen

Nicholas Lai