汇丰-亚洲科技：ABF基板：人工智能上行周期才刚刚开始-Asia Technology ABF substrate：AI upcycle is just beginning-20260427

HSBCGObalnvestmentResearch27April2026

Equities

ElectronicEquipment&Instruments

AsiaTechnology

ABFsubstrate:AIupcycleisjustbeginning

Taiwan

uWeexpectpricehikestofurtherextendinto1H27

uAcceleratingAIdemandtodriveseveresupplyshortageof

-8%/-27%/-35%in2026/2027/2028

uRetainBuyratingsandraisetargetpricesforUnimicron,Kinsus,andNanyaPCB

Weexpectthepricingupcycletoextendinto1H27:Unimicron,KinsusandNanya

PCBrecentlyreported1Q26preliminaryrevenuesofTWD37.4bn(+8%QoQ,+24%

YoY),TWD11.1bn(+3%QoQ,+29%YoY),andTWD11.2bn(0%QoQ,+32%YoY),

respectively,differentfromourexpectationsby1%/6%/-8%andconsensusby2%/2%/-3%.Weattributethesebetter-than-seasonalityresultstoABF/BTsubstratepricehikesfuelledbyacceleratingAIdemandandanupstreammaterialshortage.Considering:1)ongoingmaterialcostburden,2)sloweryieldramp-upfromsecond-tierlow-CTEglassfibresuppliers,and3)astrongerAIGPU/ASIC/CPUshipmentoutlook,wenowexpecttheABFsubstratepricingupcycletoextendatleastinto1H27(from2H26previously),implyingblended31%/28%pricehikesin2026e/2027e(vsconsensusof18%/19%).

Severeshortagereshapestheindustry:WehaveupdatedourABFsubstratesupply-demandmodel(exhibit2)–wenowexpectthesupplyshortagetohavestartedfrom

2H25andtofurtherextendto-8%/-27%/-35%in2026e/2027e/2028e(witha36%

demandCAGRin2025-28evssupplygrowthof16%).Withincreasingvolumeand

substratedimensiongrowthforAIchipsandserverCPUsubstrates,webelievethe

currentexpansionpaceofsubstratesupplierswouldbehardtokeepupwithoverall

demand.Furthermore,weexpectastructuralshiftinABFsubstrateconsumptionmixbyapplication.WebelievetheweightingofPCsislikelytodecreasefrom61%in2020to

10%in2028;whereasthemixofAIchipsandserverCPUscombinedshouldincrease

from23%in2020to85%in2028.Weseethisphenomenonasaresultofnotonly

strongerdemandfromAIandserverCPU,butalsooftheshorterlifecycleofAIproductsvsconsumerproducts,whichcausesloweryieldandleadstomorecapacity

consumption.Wealsoobservesomepotentialbusinesschangessuchaslong-termagreements(LTA)negotiationsandorderoverflows.

RetainBuyratingsonourthreecoveredcompanieswithhighertargetprices:

UnimicrontoTWD1,060(fromTWD605),KinsustoTWD643(fromTWD300),andNanyaPCBtoTWD1,050(fromTWD480).Weexpectallthreecompaniestobenefitfromthe

substrateupcycle,andseeUnimicronasthebiggestAIbeneficiarywithmultipleprojectsonhandandaleadingmarketshare.

TedLin*

Analyst,TaiwanTechnology

HSBCSecurities(Taiwan)CorporationLimited

ted.ht.lin@.tw

+886266312870

JimmyWu*

Associate,TaiwanTechnology

HSBCSecurities(Taiwan)CorporationLimited

jimmy.fh.wu@.tw

+886266312869

*Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andisnotregistered/qualifiedpursuanttoFINRAregulations

Highconiction,highercaution

The23rdeditionoftheEMSentimentSurey

cicktoiew

Exhibit1:ABFsubstratecoveragesummary

CompanyTickerCMP____TargetPrice__________Rating_____UpsideMarketCap_______P/E______________P/B_______

OldNewOldNew(USDm)2027202820272028

Unimicron

3037TW

790.00

605.00

1060.00

Buy

Buy

34.2%

36,342

19.1x

13.8x

6.5x

4.5x

Kinsus

3189TW

526.00

300.00

643.00

Buy

Buy

22.2%

7,997

24.4x

16.5x

4.6x

3.9x

NanyaPCB

8046TW

874.00

480.00

1050.00

Buy

Buy

20.1%

16,276

27.6x

19.6x

9.1x

6.7x

Source:HSBCestimates,Bloomberg.Pricedatcloseof24Apr2026.CurrencyinTWD

Disclosures&Disclaimer

ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit.

Issuerofreport:HSBCSecurities(Taiwan)CorporationLimited

ViewHSBCGlobalInvestmentResearchat:

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2

ABFsubstrateupcycledrivenbyAI-relateddemand

WeinitiallyobservedsignsofanABFsubstrateshortagestartingin2H25,mainlyowingtothe

criticalupstreammaterialshortageofT-glass.However,withdemandfromAIGPU/ASICand

serverCPUcontinuingtobestrong,wenowexpectthisshortagetofurtherextendto-8%/-27%/-

35%in2026e/2027e/2028e.Comparedwiththepreviouspandemicupcyclewhichwasdrivenby

consumerelectronicsdemand,weestimatethisupcyclecanbemoresolidandsustainablewithAIGPUvendors/majorCSPs’aggressiveAIproductroadmaps.ThestrengthofAIdemandis

supportedbyongoingadvancedpackagingexpansionplansatTSMC,ASE/SPIL,Amkor,andIntel.

Withthissevereshortage,wehaveobservedsomebusinesschanges:1)WenoticethepotentialforAIGPU/ASICsupplierstonegotiatewithsubstratesuppliersonLTAstoensurestablehigh-endABFsubstratesupplytomeettheirAIprojectstimeline.WebelievethepricingandmarginprofileofLTAsthistimeshouldbebetterthantheonesinthepreviouscycles(withpricingadjustment

flexibility).GiventhatsubstratesrepresentalimitedportionoftotalAIinfrastructurecosts,AI

customersshouldbemoreconcernedaboutsubstrateshortagesthanrisingcosts,andthusaremuchmoretolerantofpricehikesthanconsumerelectronicscustomers;2)thetighteningsupplycouldpotentiallyforceend-customerstoapproachtier-2substratesuppliers(suchasZDT,SCC,etc.),creatingopportunitiesforthemtogainshareinlower-endAIchip/CPUprojects(forboth

ABF/BTsubstrateproducts).

Exhibit2:ABFsubstratesupplyvsdemandgap

20.0%17.2%

4.7%4.1%

.7.5%

-15.2%

30.0%

20.0%

10.0%

0.0%

-10.0%-20.0%-30.0%-40.0%

-50.0%

2020202120222023202420252026e2027e2028e

.27.2%

.35.1%

-12.1%

Source:Trendforce,Companydata,HSBCestimates

Onthedemandside,weviewAIGPU/ASICandserverCPUasthemajordemanddrivers.Tomeetstricterdatatransmissionrequirementsandheterogenousintegrationneeds,themigrationofABF

substratestolargerdimensionsandhigherlayercountspecsisaninevitabletrend,inourview.Thedesigncomplexityhasdirectlyincreasedproductiondifficulty,leadingtoaloweryieldrateand

greatercapacityconsumption.Withincreasingshipmentsandlargerformfactors,weestimateAIGPU/ASICandserverCPUsubstratedemandtogrowat64%and45%CAGRin2025-28e,

respectively.Overall,weexpectABFsubstratedemandtogrowat36%CAGRin2025-28e.

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Equities●ElectronicEquipment&Instruments

27April2026

3

Exhibit3:ABFsubstratedemandgrowth

240,000

210,000

180,000

150,000

120,000

90,000

60,000

30,000

0

2020202120222023202420252026e2027e2028e

50%

40%

30%

20%

10%

0%

-10%

PC

AIGPU/ASIC

GamingGPUYoY(%)

ServerOthers

Source:Trendforce,HSBCestimates

Exhibit4:ABFsubstratedemandmix

40%

61%20%

0%

2020

PCServerGamingGPUAIGPU/ASICOthers

45%

18%

2026e

50%

12%

2027e

41%

27%

2025

49%

10%

2028e

100%

80%

60%

62%

2021

53%

2022

47%

2023

42%

2024

9%

10%

34%

5%

10%

33%

10%

32%

36%

4%

31%

5%

27%

7%

11%

23%

12%

21%

21%

8%

Source:Trendforce,HSBCestimates

Onthesupplyside,weobserveaslowercapacityexpansionpaceversusthepandemic

upcycle.Amongpeers,industryleadersIbidenandUnimicronhaveannouncedthemost

aggressiveplanstoexpandat35%/23%CAGRin2025-2028e,respectively,echoingourviewthatthisupcycleisdrivenbyrobustAI-relatedhigh-endsubstratedemand.Besides,Kinsushasalsoannounceda25%capacityexpansionplanin2027,withpotentialadditionalexpansionin2028/2029.Webelievethecurrentexpansionpaceofsubstratesupplierswouldbehardtomeetmarketdemand,andthusexpectmorecapacityexpansionplansfromsuppliersgoingforward.

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Equities●ElectronicEquipment&Instruments

27April2026

4

Exhibit5:ABFsubstratesupplygrowth

(ksqft/year)

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

2020202120222023202420252026e2027e2028e

30%

25%

20%

15%

10%

5%

0%

AT&S

NanyaPCB

UnimicronSEMCO

ShinkoYoY(%)

IbidenKinsus

Source:Companydata,HSBCestimates

Exhibit6:ABFsubstratesupplymix

5%

4%

7%

8%

9%

33%

33%

2028e

6%

5%

8%

9%

10%

28%

33%

2027e

7%

5%

9%

11%

12%

24%

33%

2026e

UnimicronIbidenAT&SShinkoSEMCOKinsusNanyaPCB

100%

80%

60%

40%

20%

0%

8%

6%

11%

13%

14%

21%

28%

2025

9%

6%

12%

11%

15%

20%

28%

2024

9%

6%

11%

10%

15%

22%

27%

2023

14%

5%

9%

11%

12%

25%

24%

2022

15%

6%

9%

13%

8%

26%

23%

2021

17%

6%

8%

15%

7%

22%

25%

2020

Source:Companydata,HSBCestimates

https://www

HSBC

Equities●ElectronicEquipment&Instruments

27April2026

5

Keycharts

Exhibit7:ABFsubstrateASP

3.0x2.5x2.0x1.5x1.0x0.5x

0.0x

1Q191Q201Q211Q221Q231Q241Q251Q26e1Q27e1Q28e

UnimicronKinsusNanyaPCB

Source:Companydata,HSBCestimates.Note:assume1Q19asthebasis

Exhibit9:ABFsubstrateUTR

120%

100%

80%

60%

40%

20%

0%

1Q191Q201Q211Q221Q231Q241Q251Q26e1Q27e1Q28e

UnimicronKinsusNanyaPCB

Source:Companydata,HSBCestimates.

Exhibit11:ABFsubstrateGM

60%

50%

40%

30%

20%

10%

0%

-10%

-20%

1Q191Q201Q211Q221Q231Q241Q251Q26e1Q27e1Q28e

UnimicronKinsusNanyaPCB

Source:Companydata,HSBCestimates.

Exhibit8:BTsubstrateASP

2.5x

2.0x

1.5x

1.0x

0.5x

0.0x

1Q191Q201Q211Q221Q231Q241Q251Q26e1Q27e1Q28e

UnimicronKinsusNanyaPCB

Source:Companydata,HSBCestimates.Note:assume1Q19asthebasis

Exhibit10:BTsubstrateUTR

140%

120%

100%

80%

60%

40%

20%

0%

1Q191Q201Q211Q221Q231Q241Q251Q26e1Q27e1Q28e

UnimicronKinsusNanyaPCB

Source:Companydata,HSBCestimates.

Exhibit12:BTsubstrateGM

60%

50%

40%

30%

20%

10%

0%

-10%

-20%

1Q191Q201Q211Q221Q231Q241Q251Q26e1Q27e1Q28e

UnimicronKinsusNanyaPCB

Source:Companydata,HSBCestimates.

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Equities●ElectronicEquipment&Instruments

27April2026

6

Valuationcharts

Exhibit13:Unimicron–PEchart

50

40

30

20

10

0

2021/42022/42023/42024/42025/42026/4

ForwardP/ERatioaverage(16x)+1STDV(21x)-1STDV(11x)

Source:Bloomberg

Exhibit15:Kinsus–PEchart

50

40

30

20

10

0

2021/42022/42023/42024/42025/42026/4

ForwardP/ERatioaverage(18x)+1STDV(23x)-1STDV(12x)

Source:Bloomberg

Exhibit17:NanyaPCB–PEchart

70

60

50

40

30

20

10

0

2021/42022/42023/42024/42025/42026/4

ForwardP/ERatioaverage(22x)+1STDV(30x)-1STDV(13x)

Source:Bloomberg

Exhibit14:Unimicron–PBchart

10

8

6

4

2

0

2021/42022/42023/42024/42025/42026/4

ForwardP/BRatioaverage(2.8x)+1STDV(4x)-1STDV(1.7x)

Source:Bloomberg

Exhibit16:Kinsus–PBchart

6

5

4

3

2

1

0

2021/42022/42023/42024/42025/42026/4

ForwardP/BRatioaverage(1.8x)+1STDV(2.6x)-1STDV(1x)

Source:Bloomberg

Exhibit18:NanyaPCB–PBchart

12

10

8

6

4

2

0

2021/42022/42023/42024/42025/42026/4

ForwardP/BRatioaverage(3.5x)+1STDV(5.3x)-1STDV(1.8x)

Source:Bloomberg

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27April2026

7

Unimicron(3037TT):maintainBuy;raiseTPtoTWD1,060fromTWD605,implyingc34%upside

WeviewUnimicronasthebiggestAIbeneficiaryamongTaiwanesesubstratesuppliers,withseveralAIGPU/ASICordersonhandandhigh-endsubstrateproductionexperience.TomeetacceleratingAIGPU/ASIC/serverCPUdemand,weexpectthecompanytoexpandABF

substratecapacityby40%yoyin2026e(from15%),especiallyinhigh-endsubstrate.

Additionally,weexpectthecompany’sAIHDIgrossmargintocontinueimprovingto12%/17%in2026e/2027e(vsconsensusof8%/12%)withcapacityramp-upandequipmentupgrades.Weraiseour2026e/2027eEPSby48%/123%toreflectahigherandlongersubstratepricing

upcycledrivenbyAIandmoreaggressivecapacityexpansions.Our2026/2027EPSestimatesare50%/86%aboveconsensus.Weintroduce2028estimatesinthisreport.

Valuation:Weraiseourmultipleto8.7xPB(from7.0x),whichis+5SDabovethe5-year

historicalPBandabovethecompany’speakvaluationduringthepandemic.WebelieveourPBmultipleisjustifiedgivenastrongerandlongerpriceupcycledrivenbyrobustAIdemand.OurnewTPofTWD1,060(fromTWD605)isbasedonour2027eBVPSofTWD122.30(from2H26-1H27BVPSofTWD86.64),implying34%upside.WemaintainourBuyrating.OurTPimpliesa

25.6xPEin2027e.

Downsiderisks:1)Longer-than-expectedGMburdenfromPCB/HDIAIproductramp-up;2)furtherdelayinnext-genserverandPCCPUs;and3)smallerpricehikesthanexpected.

Exhibit19:HSBCestimatechangesandcomparisonwithconsensus

NewOldChangeConsensusHSBCvsCons

(TWDm)2026e2027e2028e2026e2027e2028e2026e2027e2028e2026e2027e2028e2026e2027e2028e

Sales

208,886

320,188383,194

175,280

212,887

19%

50%

173,783

224,016

291,982

20%

43%

31%

-y-o-y

59.2%

53.3%

19.7%

33.6%

21.5%

32.4%

28.9%

30.3%

Grossprofit

50,400

99,310

131,834

38,994

52,572

29%

89%

36,510

59,346

89,527

38%

67%

47%

-GM

24.1%

31.0%

34.4%

22.2%

24.7%

21.0%

26.5%

30.7%

Operatingprofit

32,435

76,199

105,010

23,569

36,605

38%

108%

22,088

42,733

69,757

47%

78%

51%

-OPM

15.5%

23.8%

27.4%

13.4%

17.2%

12.7%

19.1%

23.9%

Netincome

27,376

64,392

88,836

18,443

28,857

48%

123%

18,021

34,078

54,663

52%

89%

63%

EPS(TWD)

17.59

41.37

57.08

11.85

18.54

48%

123%

11.74

22.18

35.55

50%

86%

61%

Source:HSBCestimates,VisibleAlphaconsensus

Exhibit20:Unimicron–quarterlyandannualP&L

(TWDm)20251Q26e2Q26e3Q26e4Q26e2026e1Q27e2Q27e3Q27e4Q27e2027e2028e

Sales131,24137,44647,19957,34766,893208,88667,31277,55287,69587,629320,188383,194

Grossprofit18,2926,96110,34314,83118,26550,40019,45723,14228,35728,35499,310131,834

Opprofit6,6743,7406,2849,89912,51232,43514,54317,48121,95522,22076,199105,010

Netincome6,6733,0145,1768,46110,72527,37612,18214,67918,65318,87864,39288,836

EPS(TWD)4.381.943.335.446.8917.597.839.4311.9812.1341.3757.08

Ratios(%)

GM13.9%18.6%21.9%25.9%27.3%24.1%28.9%29.8%32.3%32.4%31.0%34.4%

OPM5.1%10.0%13.3%17.3%18.7%15.5%21.6%22.5%25.0%25.4%23.8%27.4%

NetMargin5.1%8.0%11.0%14.8%16.0%13.1%18.1%18.9%21.3%21.5%20.1%23.2%

q-o-q

Sales7.9%26.0%21.5%16.6%0.6%15.2%13.1%-0.1%

Grossprofit27.2%48.6%43.4%23.2%6.5%18.9%22.5%0.0%

Opprofit64.3%68.0%57.5%26.4%16.2%20.2%25.6%1.2%

Netincome-12.5%71.7%63.5%26.8%13.6%20.5%27.1%1.2%

EPS-14.5%71.7%63.5%26.8%13.6%20.5%27.1%1.2%

y-o-y

Sales13.8%24.4%45.4%68.7%92.8%59.2%79.8%64.3%52.9%31.0%53.3%19.7%

Grossprofit12.1%72.9%143.6%226.1%233.8%175.5%179.5%123.8%91.2%55.2%97.0%32.7%

Opprofit30.4%195.2%316.3%545.9%449.6%386.0%288.8%178.2%121.8%77.6%134.9%37.8%

Netincome31.3%229.5%17380.7%285.6%211.3%310.2%304.2%183.6%120.4%76.0%135.2%38.0%

EPS31.2%222.2%16995.1%277.1%204.4%301.2%304.2%183.6%120.4%76.0%135.2%38.0%

Source:Companydata,HSBCestimates

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27April2026

8

Financials&valuation:UnimicronTechnologyCorpBuy

12/2024a

12/2025a

270.0

No.ofboardmembers

9

491.0

Averageboardtenure(years)

n/a

Yes

Femaleboardmembers(%)

11.1

12/2024a

Boardmembersindependence(%)

33.3

Employeecostsas%ofrevenues

n/a

Yes

Financialstatements

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Profit&losssummary(TWDm)

Revenue

131,241

208,886

320,188

383,194

EBITDA

25,447

53,235

98,199

129,010

Depreciation&amortisation

-18,773

-20,800

-22,000

-24,000

Operatingprofit/EBIT

6,674

32,435

76,199

105,010

Netinterest

350

280

215

150

PBT

8,827

33,265

76,814

105,560

HSBCPBT

8,827

33,265

76,814

105,560

Taxation

-1,277

-4,990

-11,522

-15,834

Netprofit

6,673

27,376

64,392

88,836

HSBCnetprofit

6,673

27,376

64,392

88,836

Cashflowsummary(TWDm)

Cashflowfromoperations

12,814

37,119

74,894

115,914

Capex

-25,617

-34,000

-40,000

-40,000

Cashflowfrominvestment

-23,018

-34,040

-40,040

-40,040

Dividends

0

0

0

0

Changeinnetdebt

-5,352

-341

-28,415

-66,990

FCFequity

-12,803

3,119

34,894

75,914

Balancesheetsummary(TWDm)

Intangiblefixedassets

24,628

24,668

24,708

24,748

Tangiblefixedassets

125,866

139,066

157,066

173,066

Currentassets

105,298

127,269

189,152

275,137

Cash&others

54,872

56,837

86,876

155,490

Totalassets

255,792

291,003

370,926

472,951

Operatingliabilities

113,921

122,600

142,462

162,371

Grossdebt

34,864

36,487

38,111

39,735

Netdebt

-20,008

-20,349

-48,765

-115,755

Shareholders'funds

100,569

125,477

183,915

264,408

Investedcapital

86,999

111,566

141,588

155,090

Ratio,growthandpershareanalysis

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Y-o-y%change

Revenue

13.8

59.2

53.3

19.7

EBITDA

13.9

109.2

84.5

31.4

Operatingprofit

30.4

386.0

134.9

37.8

PBT

20.6

276.8

130.9

37.4

HSBCEPS

31.2

301.2

135.2

38.0

Ratios(%)

Revenue/IC(x)

1.5

2.1

2.5

2.6

ROIC

6.6

27.8

51.2

60.2

ROE

6.9

24.2

41.6

39.6

ROA

3.4

10.7

20.0

21.5

EBITDAmargin

19.4

25.5

30.7

33.7

Operatingprofitmargin

5.1

15.5

23.8

27.4

EBITDA/netinterest(x)

Netdebt/equity

-18.7

-15.4

-25.6

-42.7

Netdebt/EBITDA(x)

-0.8

-0.4

-0.5

-0.9

CFfromoperations/netdebt

Persharedata(TWD)

EPSRep(diluted)

4.38

17.59

41.37

57.08

HSBCEPS(diluted)

4.38

17.59

41.37

57.08

DPS

0.00

0.00

0.00

0.00

Bookvalue

70.30

84.76

122.30

174.02

Valuationdata

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

EV/sales

9.3

5.9

3.7

2.9

EV/EBITDA

48.1

23.0

12.2

8.8

EV/IC

14.1

11.0

8.4

7.3

PE*

180.2

44.9

19.1

13.8

PB

11.2

9.3

6.5

4.5

FCFyield(%)

-1.0

0.3

2.8

6.1

Dividendyield(%)

0.0

0.0

0.0

0.0

*BasedonHSBCEPS(diluted)

ESGmetrics

EnvironmentalIndicators

GovernanceIndicators

GHGemissionintensity*

Energyintensity*

CO2reductionpolicy

SocialIndicators

n/a

Employeeturnover(%)

Diversitypolicy

Source:Companydata,HSBC;NA–notavailable

*GHGintensityandenergyintensityaremeasuredinkgandkWhrespectivelyagainstrevenueinUSD‘000s

Issuerinformation

Shareprice(TWD)

790.00

Freefloat

84%

Targetprice(TWD)

1060.00

Sector

ElectronicEquipment

RIC(Equity)

3037.TW

Country/Region

Taiwan

Bloomberg(Equity)

3037TT

Analyst

TedLin

Marketcap(USDm)

39,437

Contact

+886266312870

Pricerelative

800.00700.00600.00500.00400.00300.00200.00100.00

0.00

202420252026

UnimicronTechnologyCorpReltoTAIWANWEIGHTEDINDEX

800.00700.00600.00500.00400.00300.00200.00100.00

0.00

Source:HSBC

Note:Pricedatcloseof24Apr2026

https://www

HSBC

Equities●ElectronicEquipment&Instruments

27April2026

9

Kinsus(3189TT):maintainBuy;raiseTPtoTWD643fromTWD300,implyingc22%upside

WebelieveKinsuswillcontinuetoenjoyaproductmiximprovementundertheAItrendwithitsleadingshareinNvidiagamingGPUandlegacyAIGPU/CPUprojects.BesidesNvidia,the

companyisalsoactivelyengaginginotherASICprojectswithsmallmarketshare.Kinsus

recentlyguidedTWD8bn/TWD10bncapexin2026e/2027e,with25%totalcapacityincreaseinitsK6plantby2027e.Consideringtherecentsupplytightness,weexpectKinsustoexpand

morecapacityin2028e/2029etocaptureAIopportunitiesgivenitsrelativelysmallerscale.Weraiseour2026/2027eEPSby24%/76%toreflectahigherandlongersubstratepricingupcycleandcapacityexpansion.Our2026/2027EPSestimatesare11%/32%aboveconsensus.We

introduce2028estimatesinthisreport.

Valuation:Weraiseourmultipleto5.7xPB(from3.0x),whichis+5SDabovethe5-year

historicalPBandabovethecompany’speakvaluationduringthepandemic.WebelieveourPBmultipleisjustifiedgivenastrongerandlongerpriceupcycledrivenbyrobustAIdemand.Our

newTPofTWD643(fromTWD300)isbasedonour2027eBVPSofTWD113.29(from2026e

BVPSofTWD99.56),implying22%upside.WemaintainourBuyrating.OurTPimpliesa29.8xPEin2027e.

Downsiderisks:1)FurtherdeclineinPC/server,andiPhoneorders;2)ramp-upissueswithnewABFsubstratecapacity;and3)smallerpricehikesthanexpected.

Exhibit21:HSBCestimatechangesandcomparisonwithconsensus

NewOldChangeConsensusHSBCvsCons

(TWDm)2026e2027e2028e2026e2027e2028e2026e2027e2028e2026e2027e2028e2026e2027e2028e

Sales

51,798

70,708

86,745

47,811

55,033

8%

28%

50,913

63,876

81,465

2%

11%

6%

-y-o-y

31.6%

36.5%

22.7%

21.5%

15.1%

29.4%

25.5%

27.5%

Grossprofit

14,227

21,514

28,477

12,588

15,384

13%

40%

13,288

18,255

25,760

7%

18%

11%

-GM

27.5%

30.4%

32.8%

26.3%

28.0%

26.1%

28.6%

31.6%

Operatingprofit

7,327

12,816

18,501

5,990

7,899

22%

62%

6,487

10,050

15,856

13%

28%

17%

-OPM

14.1%

18.1%

21.3%

12.5%

14.4%

12.7%

15.7%

19.5%

Netincome

4,988

9,817

14,540

4,036

5,572

24%

76%

4,489

7,436

12,056

11%

32%

21%

EPS(TWD)

10.97

21.58

31.97

8.87

12.25

24%

76%

9.87

16.35

26.50

11%

32%

21%

Source:HSBCestimates,VisibleAlphaconsensus

Exhibit22:Kinsus–quarterlyandannualP&L

(TWDm)20251Q26e2Q26e3Q26e4Q26e2026e1Q27e2Q27e3Q27e4Q27e2027e2028e

Sales39,35111,10512,07913,56015,05551,79816,93117,66218,07518,04070,70886,745

Grossprofit8,3142,8343,3323,8344,22614,2274,9745,286