ABF载板：看好未来供需向好

Raise PO on Unimicron/NYPCB/Kinsus; reiterate Buy We raiseour POs on Unimicron/NYPCB/Kinsus to NT$1,300/NT$1,170/NT$695 (fromNT$1,100/NT$1,100/NT$590) along with 10-20%/4-11%/14-28% increases in our EPSestimates across 2026-28, which are resulted from 1) the positives we have seenrecently (discussed below); and 2) ongoing supply addition by these companies to meetthe robust demand growth, via the capacity ramp in new factories or debottlenecking inthe existing ones. Our valuation methods applied to the three names remain unchanged(Exhibit 2), and we reiterate Buy on these names in view of the structural benefits fromprolonged supply/demand tightness into 2027-28. EquityTaiwanTech Hardware Mike Yang>>Research AnalystMerrill Lynch (Taiwan)+886 2 2376 3729mike.c.yang@bofa.com AI–artificial intelligence Structural demand strength from AI CPU/GPUAcross different generations of CPU/GPU used in AI servers, the consumption of ABF substrate keeps increasing at a rapid pace (Exhibit 4). Further, the content values fromthese CPU/GPU are all much higher vs that in PC (personal computer) processor. In ourview, this supports our estimates that 54%/61%/66% of the industry demand comesfrom server CPU and accelerators in 2026/27/28, as discussed in our report (see,ABFsubstrate supply/demand update.) CPU/GPU–central/graphicprocessing unit NYPCB–Nan Ya Printed CircuitBoard Positive read from AMD recently Furtheron industry S/D (supply/demand), we see positives from theinitiative/commentary by AMD’s management recently, including 1) its recent visit toTaiwan to reassure the substrate supply; and 2) a reaffirmed 35% CAGR for server CPUTAM (total addressable market) toward 2030. For the names (Unimicron, NYPCB, Kinsus)we discuss in the report, we note all of them are the substrate suppliers to AMD. Constructive view on S/D shared by peers For the industry peers globally, we noteAT&S guided 30-35% revenue YoY inFY2026/27 (vs EUD1.8bn in FY2025/26), while the growth rate is capped by theupstream glass cloth supply tightness. In our view, such comments are similar to whatwe learnt from Kinsus previously, and it implies further revenue upside if the substratemakers can secure more T-glass supply. On the demand side, we note a structuralincrease in package substrate consumption along with bigger reticle size and a morecomplicated process, as shared by Ibiden (Exhibit 5). This research report provides general information only. No part of this report maybe usedor reproduced or quoted in any manner whatsoever in Taiwan by the press or otherpersons without the express written consent of BofA Securities.>> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.BofA Securities does and seeks to do business with issuerscovered in its research reports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 10 to 13. Analyst Certification on page 8. PriceObjective Basis/Risk on page 7. Our valuation methods on the threenamesare unchanged Exhibit3:Table ofrecommendationStocksmentionedwith ratings in this report Exhibit4:ABFsubstrateconsumption by applications (by indexing PC processor to 1.0)There is a structural growth ofABFsubstrate demand across generations of AI CPU/GPU Exhibit6:Earningsestimate change-UnimicronWe raise2026-28E EPS by 10-20% after baking in the assumption of stronger revenue growth and gross margin Exhibit7:BofAe vsconsensus-UnimicronWe are 7% ahead ofconsensusfor 2026-27E EPS, given the assumption of stronger revenue growth and operating leverage Exhibit9:Earnings estimate change–NYPCBWe raise2027-28E EPS by 4-11% after baking in the assumptions of stronger revenue growth andgross margin Exhibit10:BofAe vs consensus-NYPCBWe are 6-23% ahead ofconsensusfor 2026-28E EPS, due partly to the assumptions of stronger revenue growth and gross margin Exhibit12:Earnings estimate change-KinsusWe raise 2026-28EEPS by 14-28% after baking in the assumption of stronger gross margin and operating leverage We are 16% ahead ofconsensusfor 2027E EPS, due mainly to the assumption of stronger operating leverage Price objective basis & risk Kinsus (KNSUF) We set our PO at NT$695 based on 28.5x 2H27-1H28E P/E, which is at mid-high-endlevel in its historical trading range since 2013. In our view, the multiple is backed by ROEand operating margin recovery to 32% and 28% in 2027-28E. Upside risks to our PO are (1) tighter ABF supply, (2) increasing adoption of SiP and AiP,(3) lower competition pressure and (4) slow development of alternative technology. Downside risks are (1) grea