PDF 原檔：報告_Daiwa_智原3035_3Q26_20261027_original.pdf
圖片清單（已驗證 2026-10-28）
| 檔名 | size | 分類 | 親眼所見內容 |
|---|---|---|---|
報告_Daiwa_智原3035_3Q26_20261027_001.png |
25KB | 真資料圖 | 股價走勢小圖（<40KB，僅確認為股價圖，未列入 lib 嵌圖） |
報告_Daiwa_智原3035_3Q26_20261027_002.png |
19KB | 真資料圖 | 智原各季營收組合 100% 堆疊柱狀圖，1Q20–4Q27E，分 IP／NRE／MP 三色，MP 約占 75–85%，2026 起 3Q26 以後為預估（財務圖，不嵌 lib） |
報告_Daiwa_智原3035_3Q26_20261027_003.png |
40KB | 真資料圖 | 股價（TWD）與 4 季 forward P/E 倍數帶（10x–35x）疊圖，橫軸 2010 年 1 月至 2027 年，來源標示「Company, TEJ, Daiwa forecasts」（財務圖，不嵌 lib） |
原始內容
Faraday Technology (3035 TT)
Target price: TWD220.00 (from TWD220.00)
Shareprice(27Oct):TWD191.50 | Up/downside:+14.9%
Turnaround confirmed (II)
- 3Q26 results a mixed bag; 4Q26 guidance broadly intact
- Firing on all cylinders into 2027 after near-term hiccups
- Reiterating our Buy (1) call and 12M TP of TWD220
What's new: Faraday released a mixed set of results and guidance on 27 October. 3Q26 core results missed consensus on an unfavourable product mix and higher opex, while 4Q26 guidance was broadly intact on delayed MCU business rebalancing. Regardless of the near-term hiccup, management expects its 3 product lines of mass-production (MP), IP and non-recurrent engineering (NRE) to fire on all cylinders into 2027 for a double-digit % YoY revenue growth. This concurs with our turnaround story for the counter, and we reiterate our Buy (1) rating and 12M TP of TWD220.
What's the impact: Results mixed, guidance intact. Faraday's 3Q26 net profit came in at TWD279m, 9% above our estimate and beating consensus by a meaningful 38%. Despite the beat, dynamics were mixed (table on p.2). Core operations missed despite a higher top line, which was spurred by MP on stronger-than-expected MCU sales from its 50%-owned Artery (6907 TT, not rated) for a lower gross margin (GM) due to an unfavourable revenue mix as MP carries a lower GM than the other 2 lines. Higher opex, as a result of salary hikes and employee bonuses, further pressured core operations with operating profit missing our/consensus estimates by 36%/11%, but non-operating gains from marked-to-market investments more than offset the miss. Guidance calls for a roughly flat 4Q26 top line with a 45% GM, broadly in line with our expectation.
Firing on all cylinders across all 3 lines. In our previous note, we expected rebalancing in the MCU business due to demand pull-in on price hikes and supply chain uncertainties. It failed to happen in 3Q26 thanks to early pull-in of OSAT capacity support, thus pushing back the rebalancing to 4Q26 - a key reason why top line was guided to be flat despite the other 2 lines of IP and NRE growing QoQ. That said, management expects the MCU business to return to a growth track in 2027 after the near-term hiccup. Its delayed advanced packaging (AP) ramp on design complexity and supply constraint looks set to accelerate in 2027 on OSAT capacity improvement which, together with a milestone of 2nm/GAA design-win for a cloud ASIC, should add to upside for the NRE and MP business next year. All in, we lower our 2026-27E EPS by 9-13% to factor in the higher opex.
What we recommend: Despite our forecast revisions, we keep our 12M TP for Faraday unchanged at TWD220 as we maintain our 4-quarter forward PER target of 37x. We reaffirm our Buy (1) rating with key downside risks of silicon inflation and geopolitical overhangs leading to global inflation and prolonging a non-AI recovery.
How we differ: Our 2026-28E EPS are 6-9% below the consensus forecasts likely on the street's lower opex assumptions.
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2
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(unchanged)
Rick Hsu (886) 2 8758 6261 rick.hsu@daiwacm-cathay.com.tw
Sam Weng (886) 2 8758 6255 sam.weng@daiwacm-cathay.com.tw
Forecast revisions (%)
| Year to 31 Dec | 26E | 27E | 28E |
|---|---|---|---|
| Revenue change | 3.6 | 3.6 | 5.6 |
| Net profit change | (9.1) | (12.9) | (0.4) |
| Core EPS (FD) change | (9.1) | (12.9) | (0.4) |
Source: Daiwa forecasts
Share price performance
| 12-month range | 139.00-233.00 |
|---|---|
| Market cap (USDbn) | 1.53 |
| 3m avg daily turnover (USDm) | 25.55 |
| Shares outstanding (m) | 261 |
| Major shareholder | UMC (13.8%) |
Financial summary (TWD)
| Year to 31 Dec | 26E | 27E | 28E |
|---|---|---|---|
| Revenue (m) | 13,193 | 16,024 | 18,391 |
| Operating profit (m) | 942 | 2,263 | 3,083 |
| Net profit (m) | 808 | 1,532 | 2,164 |
| Core EPS (fully-diluted) | 3.103 | 5.878 | 8.304 |
| EPS change (%) | 10.5 | 89.4 | 41.3 |
| Daiwa vs Cons. EPS (%) | (6.4) | (5.7) | (8.6) |
| PER (x) | 61.7 | 32.6 | 23.1 |
| Dividend yield (%) | 0.9 | 1.0 | 2.1 |
| DPS | 1.8 | 2.0 | 4.0 |
| PBR (x) | 3.7 | 3.4 | 3.1 |
| EV/EBITDA (x) | 21.3 | 11.5 | 8.6 |
| ROE (%) | 6.1 | 10.8 | 14.0 |
Source: FactSet, Daiwa forecasts
Faraday: quarterly P&L estimates and forecasts
| TWDm | 1Q26 | 2Q26 | 3Q26 | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 2,589 | 3,314 | 3,664 | 3,627 | 3,580 | 3,782 | 4,256 | 4,406 | 17,993 | 13,193 | 16,024 | 18,391 |
| COGS | -1,364 | -1,815 | -2,107 | -1,996 | -1,969 | -2,038 | -2,280 | -2,374 | -13,135 | -7,282 | -8,662 | -9,970 |
| Gross profit | 1,224 | 1,499 | 1,557 | 1,631 | 1,611 | 1,744 | 1,976 | 2,032 | 4,857 | 5,911 | 7,362 | 8,420 |
| Opex | 1,129 | 1,228 | 1,343 | 1,270 | 1,260 | 1,267 | 1,281 | 1,291 | 4,305 | 4,969 | 5,099 | 5,337 |
| Operating profit | 96 | 271 | 214 | 361 | 350 | 477 | 695 | 741 | 552 | 942 | 2,263 | 3,083 |
| Non-op gains (losses) | 83 | 111 | 266 | 21 | 32 | 35 | 36 | 36 | 449 | 481 | 139 | 168 |
| Pretax profit | 179 | 382 | 480 | 382 | 382 | 512 | 731 | 777 | 1,002 | 1,424 | 2,402 | 3,251 |
| Income taxes & MI | -75 | -184 | -202 | -155 | -84 | -113 | -161 | -171 | -270 | -615 | -528 | -1,088 |
| Net profit | 104 | 198 | 279 | 227 | 227 | 306 | 486 | 513 | 731 | 808 | 1,532 | 2,164 |
| EPS (TWD, fully diluted) | 0.40 | 0.76 | 1.07 | 0.87 | 0.87 | 1.17 | 1.87 | 1.97 | 2.81 | 3.10 | 5.88 | 8.30 |
| Revenue mix* | ||||||||||||
| MP | 63% | 73% | 79% | 77% | 77% | 75% | 76% | 76% | 79% | 74% | 76% | 76% |
| NRE | 21% | 14% | 8% | 10% | 11% | 11% | 11% | 11% | 13% | 13% | 11% | 11% |
| IP | 16% | 13% | 12% | 12% | 12% | 14% | 13% | 13% | 8% | 13% | 13% | 12% |
| Margin | ||||||||||||
| Gross | 47.3% | 45.2% | 42.5% | 45.0% | 45.0% | 46.1% | 46.4% | 46.1% | 27.0% | 44.8% | 45.9% | 45.8% |
| Opex | 43.6% | 37.1% | 36.7% | 35.0% | 35.2% | 33.5% | 30.1% | 29.3% | 23.9% | 37.7% | 31.8% | 29.0% |
| Operating | 3.7% | 8.2% | 5.9% | 10.0% | 9.8% | 12.6% | 16.3% | 16.8% | 3.1% | 7.1% | 14.1% | 16.8% |
| Pretax | 6.9% | 11.5% | 13.1% | 10.5% | 10.7% | 13.5% | 17.2% | 17.6% | 5.6% | 10.8% | 15.0% | 17.7% |
| Net | 4.0% | 6.0% | 7.6% | 6.3% | 6.3% | 8.1% | 11.4% | 11.6% | 4.1% | 6.1% | 9.6% | 11.8% |
| Growth (QoQ) | ||||||||||||
| Revenue | -8% | 28% | 11% | -1% | -1% | 6% | 13% | 4% | ||||
| Gross profit | 3% | 22% | 4% | 5% | -1% | 8% | 13% | 3% | ||||
| Operating profit | 19% | 182% | -21% | 69% | -3% | 36% | 46% | 7% | ||||
| Net profit | -50% | 90% | 41% | -19% | 0% | 35% | 59% | 5% | ||||
| EPS (FD) | -50% | 90% | 41% | -19% | 0% | 35% | 59% | 5% | ||||
| Growth (YoY) | ||||||||||||
| Revenue | -65% | -27% | 13% | 29% | 38% | 14% | 16% | 21% | 63% | -27% | 21% | 15% |
| Gross profit | -19% | 37% | 45% | 38% | 32% | 16% | 27% | 25% | -4% | 22% | 25% | 14% |
| Operating profit | -74% | 324% | nm | 349% | 266% | 76% | 224% | 105% | -48% | 71% | 140% | 36% |
| Net profit | -70% | 666% | 84% | 10% | 118% | 54% | 74% | 126% | -30% | 11% | 89% | 41% |
| EPS (FD) | -70% | 667% | 84% | 10% | 118% | 54% | 74% | 126% | -31% | 11% | 89% | 41% |
Source: Company, Daiwa estimates and forecasts
Note: * MP = mass-production, which includes HBM consigned revenue in 1H25, thus deflating organic GM; NRE = non-recurrent engineering; IP = intellectual property
Faraday: 3Q26 results and 4Q26 guidance check
| TWDm | 3Q26 - Actual | 3Q26 - Daiwa | 3Q26 - Consensus | 3Q26 - Daiwa | Variance Growth - Consensus | Variance Growth - QoQ | Variance Growth - YoY | 4Q26E - Guidance | 4Q26E - Daiwa (previous) |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 3,664 | 3,194 | 3,235 | 15% | 13% | 11% | 13% | c.flat QoQ | c.flat at TWD3.6bn |
| MP | 2,907 | 2,320 | na | 25% | na | 20% | 25% | ||
| NRE | 448 | 425 | na | 5% | na | -1% | -9% | ||
| IP | 309 | 449 | na | -31% | na | -29% | -25% | ||
| Gross profit | 1,557 | 1,448 | 1,446 | 8% | 8% | 4% | 45% | GM c.45% | GM = 45% |
| Opex | 1,343 | 1,115 | 1,206 | 20% | 11% | 9% | 30% | opex down single-digit % QoQ | opex down 9% QoQ |
| Operating profit | 214 | 333 | 240 | -36% | -11% | -21% | 442% | ||
| Pretax profit | 480 | 354 | 290 | 36% | 66% | 26% | 126% | ||
| Net profit | 279 | 255 | 202 | 9% | 38% | 41% | 84% | ||
| FD EPS (TWD) | 1.07 | 0.98 | 0.78 | 9% | 38% | 41% | 84% | ||
| Margin | |||||||||
| Gross | 42.5% | 45.3% | 44.7% | -2.8% | -2.2% | ||||
| Operating | 5.8% | 10.4% | 7.4% | -4.6% | -1.6% | ||||
| Net | 7.6% | 8.0% | 6.2% | -0.4% | 1.4% | ||||
| Revenue mix* | |||||||||
| IP | 8% | 14% | |||||||
| NRE | 12% | 13% | |||||||
| MP | 79% | 73% |
Source: Company, Bloomberg, Daiwa estimates and forecasts
Note: * IP = intellectual property, NRE = non-recurrent engineering, MP = mass-production
Faraday: revenue mix by business
Faraday: 4-quarter forward PER band
Source: Company, Daiwa estimates and forecasts
Note: * IP = intellectual property, NRE = non-recurrent engineering, MP = mass-production
Source: Company, TEJ, Daiwa forecasts
Financial summary
Key assumptions
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| IP revenue growth (%) | 26.5 | 26.4 | 4.5 | 11.3 | (2.8) | 15.0 | 18.1 | 11.3 |
| NRE revenue growth (%) | 32.4 | 22.1 | 0.2 | 30.4 | 1.7 | (27.1) | 5.7 | 18.1 |
| MP revenue growth (%) | 56.3 | 78.2 | (11.6) | (17.9) | 95.6 | (31.1) | 24.7 | 14.9 |
Profit and loss (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| NRE | 1,410 | 1,721 | 1,725 | 2,250 | 2,289 | 1,669 | 1,765 | 2,083 |
| MP | 5,614 | 10,002 | 8,839 | 7,255 | 14,188 | 9,780 | 12,199 | 14,013 |
| Other Revenue | 1,062 | 1,342 | 1,402 | 1,560 | 1,516 | 1,744 | 2,061 | 2,294 |
| Total Revenue | 8,085 | 13,065 | 11,966 | 11,065 | 17,993 | 13,193 | 16,024 | 18,391 |
| Other income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| COGS | (3,995) | (6,690) | (6,658) | (6,013) | (13,135) | (7,282) | (8,662) | (9,970) |
| SG&A | (726) | (1,018) | (983) | (989) | (1,114) | (1,405) | (1,449) | (1,502) |
| Other op.expenses | (1,962) | (2,436) | (2,369) | (2,991) | (3,191) | (3,564) | (3,650) | (3,835) |
| Operating profit | 1,402 | 2,921 | 1,956 | 1,071 | 552 | 942 | 2,263 | 3,083 |
| Net-interest inc./(exp.) | 7 | 27 | 52 | 100 | 83 | 88 | 99 | 128 |
| Assoc/forex/extraord./others | 93 | 109 | 63 | 173 | 366 | 394 | 40 | 40 |
| Pre-tax profit | 1,502 | 3,057 | 2,070 | 1,343 | 1,002 | 1,424 | 2,402 | 3,251 |
| Tax | (212) | (547) | (509) | (271) | (229) | (333) | (528) | (715) |
| Min. int./pref. div./others | (134) | (56) | 28 | (30) | (42) | (283) | (342) | (372) |
| Net profit (reported) | 1,156 | 2,455 | 1,589 | 1,041 | 731 | 808 | 1,532 | 2,164 |
| Net profit (adjusted) | 1,156 | 2,455 | 1,589 | 1,041 | 731 | 808 | 1,532 | 2,164 |
| EPS (reported)(TWD) | 4.651 | 9.876 | 6.395 | 4.042 | 2.807 | 3.103 | 5.878 | 8.304 |
| EPS (adjusted)(TWD) | 4.651 | 9.876 | 6.395 | 4.042 | 2.807 | 3.103 | 5.878 | 8.304 |
| EPS (adjusted fully-diluted)(TWD) | 4.651 | 9.791 | 6.379 | 3.995 | 2.807 | 3.103 | 5.878 | 8.304 |
| DPS (TWD) | 1.000 | 3.300 | 5.000 | 4.341 | 3.000 | 1.800 | 2.000 | 4.000 |
| EBIT | 1,402 | 2,921 | 1,956 | 1,071 | 552 | 942 | 2,263 | 3,083 |
| EBITDA | 1,807 | 3,394 | 2,457 | 1,880 | 1,481 | 2,046 | 3,562 | 4,579 |
Cash flow (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Profit before tax | 1,502 | 3,057 | 2,070 | 1,343 | 1,002 | 1,424 | 2,402 | 3,251 |
| Depreciation and amortisation | 405 | 473 | 502 | 810 | 929 | 1,103 | 1,299 | 1,496 |
| Tax paid | (212) | (547) | (509) | (271) | (229) | (333) | (528) | (715) |
| Change in working capital | (256) | (2,368) | 1,487 | 1,331 | (1,123) | (846) | 243 | (761) |
| Other operational CF items | 1,067 | 584 | (543) | (312) | 351 | 0 | 0 | 0 |
| Cash flow from operations | 2,506 | 1,200 | 3,007 | 2,901 | 930 | 1,349 | 3,416 | 3,270 |
| Capex | (41) | (86) | (49) | (148) | (162) | (132) | (160) | (184) |
| Net (acquisitions)/disposals | (842) | 1,082 | (670) | 0 | 0 | 0 | 0 | 0 |
| Other investing CF items | 295 | (1,373) | 16 | (2,414) | (938) | 0 | 0 | 0 |
| Cash flow from investing | (588) | (377) | (704) | (2,562) | (1,100) | (132) | (160) | (184) |
| Change in debt | 0 | 127 | (30) | (70) | 0 | (46) | (37) | (29) |
| Net share issues/(repurchases) | 0 | 0 | 0 | 3,720 | 0 | 0 | 0 | 0 |
| Dividends paid | (249) | (820) | (1,243) | (1,118) | (782) | (469) | (521) | (1,042) |
| Other financing CF items | 49 | (89) | (148) | (354) | (50) | (564) | (46) | (37) |
| Cash flow from financing | (200) | (782) | (1,421) | 2,178 | (832) | (1,078) | (603) | (1,108) |
| Forex effect/others | (3) | 69 | (40) | 80 | (28) | 0 | 0 | 0 |
| Change in cash | 1,715 | 110 | 842 | 2,596 | (1,030) | 138 | 2,652 | 1,978 |
| Free cash flow | 2,465 | 1,114 | 2,958 | 2,752 | 768 | 1,217 | 3,255 | 3,086 |
Source: FactSet, Daiwa forecasts
Financial summary continued …
Balance sheet (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Cash & short-term investment | 4,823 | 4,899 | 5,741 | 8,337 | 7,293 | 7,431 | 10,084 | 12,062 |
| Inventory | 1,321 | 3,017 | 1,187 | 1,074 | 955 | 1,439 | 1,409 | 1,869 |
| Accounts receivable | 939 | 1,354 | 1,559 | 1,054 | 1,726 | 1,383 | 2,130 | 1,901 |
| Other current assets | 310 | 485 | 386 | 560 | 1,227 | 1,227 | 1,227 | 700 |
| Total current assets | 7,392 | 9,754 | 8,873 | 11,024 | 11,201 | 11,480 | 14,849 | 16,533 |
| Fixed assets | 518 | 514 | 553 | 582 | 617 | 583 | 548 | 732 |
| Goodwill & intangibles | 505 | 615 | 683 | 2,115 | 1,761 | 1,099 | 319 | 20 |
| Other non-current assets | 3,621 | 2,629 | 3,309 | 4,609 | 5,354 | 5,354 | 5,354 | 5,354 |
| Total assets | 12,037 | 13,513 | 13,418 | 18,330 | 18,932 | 18,516 | 21,070 | 22,639 |
| Short-term debt | 0 | 127 | 95 | 448 | 589 | 71 | 62 | 54 |
| Accounts payable | 1,372 | 1,129 | 999 | 1,675 | 1,649 | 944 | 1,903 | 1,375 |
| Other current liabilities | 2,134 | 2,899 | 2,142 | 1,750 | 2,447 | 2,447 | 2,447 | 2,447 |
| Total current liabilities | 3,506 | 4,156 | 3,236 | 3,872 | 4,685 | 3,462 | 4,412 | 3,875 |
| Long-term debt | 0 | 0 | 0 | 416 | 228 | 183 | 146 | 117 |
| Other non-current liabilities | 376 | 388 | 328 | 569 | 491 | 600 | 700 | 1,000 |
| Total liabilities | 3,881 | 4,544 | 3,564 | 4,857 | 5,403 | 4,244 | 5,258 | 4,992 |
| Share capital | 2,486 | 2,486 | 2,486 | 2,606 | 2,606 | 2,606 | 2,606 | 2,606 |
| Reserves/R.E./others | 5,354 | 6,114 | 7,048 | 10,469 | 10,451 | 10,911 | 12,110 | 13,572 |
| Shareholders' equity | 7,840 | 8,599 | 9,533 | 13,075 | 13,056 | 13,517 | 14,716 | 16,177 |
| Minority interests | 315 | 369 | 321 | 399 | 472 | 755 | 1,097 | 1,470 |
| Total equity & liabilities | 12,037 | 13,513 | 13,418 | 18,330 | 18,932 | 18,516 | 21,070 | 22,639 |
| EV | 45,388 | 45,493 | 44,570 | 42,821 | 43,892 | 43,472 | 41,116 | 39,474 |
| Net debt/(cash) | (4,823) | (4,772) | (5,646) | (7,473) | (6,476) | (7,178) | (9,876) | (11,891) |
| BVPS (TWD) | 31.543 | 34.597 | 38.356 | 50.743 | 50.111 | 51.878 | 56.479 | 62.089 |
Key ratios (%)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Sales (YoY) | 47.1 | 61.6 | (8.4) | (7.5) | 62.6 | (26.7) | 21.5 | 14.8 |
| EBITDA (YoY) | 210.0 | 87.8 | (27.6) | (23.5) | (21.2) | 38.1 | 74.2 | 28.5 |
| Operating profit (YoY) | 840.3 | 108.4 | (33.1) | (45.3) | (48.4) | 70.6 | 140.2 | 36.2 |
| Net profit (YoY) | 330.6 | 112.3 | (35.2) | (34.5) | (29.8) | 10.5 | 89.4 | 41.3 |
| Core EPS (fully-diluted) (YoY) | 332.1 | 110.5 | (34.8) | (37.4) | (29.7) | 10.5 | 89.4 | 41.3 |
| Gross-profit margin | 50.6 | 48.8 | 44.4 | 45.7 | 27.0 | 44.8 | 45.9 | 45.8 |
| EBITDA margin | 22.4 | 26.0 | 20.5 | 17.0 | 8.2 | 15.5 | 22.2 | 24.9 |
| Operating-profit margin | 17.3 | 22.4 | 16.3 | 9.7 | 3.1 | 7.1 | 14.1 | 16.8 |
| Net profit margin | 14.3 | 18.8 | 13.3 | 9.4 | 4.1 | 6.1 | 9.6 | 11.8 |
| ROAE | 16.4 | 29.9 | 17.5 | 9.2 | 5.6 | 6.1 | 10.8 | 14.0 |
| ROAA | 11.4 | 19.2 | 11.8 | 6.6 | 3.9 | 4.3 | 7.7 | 9.9 |
| ROCE | 19.3 | 33.9 | 20.5 | 8.8 | 3.9 | 6.5 | 14.8 | 18.2 |
| ROIC | 37.3 | 63.7 | 35.1 | 16.7 | 6.5 | 10.2 | 27.1 | 41.1 |
| Net debt to equity | net cash | net cash | net cash | net cash | net cash | net cash | net cash | net cash |
| Effective tax rate | 14.1 | 17.9 | 24.6 | 20.2 | 22.8 | 23.4 | 22.0 | 22.0 |
| Accounts receivable (days) | 36.8 | 32.0 | 44.4 | 43.1 | 28.2 | 43.0 | 40.0 | 40.0 |
| Current ratio (x) | 2.1 | 2.3 | 2.7 | 2.8 | 2.4 | 3.3 | 3.4 | 4.3 |
| Net interest cover (x) | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. |
| Net dividend payout | 92.6 | 71.0 | 50.6 | 69.7 | 75.1 | 64.1 | 64.5 | 68.0 |
| Free cash flow yield | 4.9 | 2.2 | 5.9 | 5.5 | 1.5 | 2.4 | 6.5 | 6.2 |
Source: FactSet, Daiwa forecasts
Company profile
Founded in 1993, Faraday is a hybrid design service provider offering IP and ASIC design services to fabless, foundry and system houses. It has R&D and marketing locations in the US, Japan, China, India, and Vietnam.
ESG analysis
ESG risks
| Risks | Management | Analystcomments |
|---|---|---|
| Executive/board quality | 2 | Faraday's Board of Directors (BoD) consists of 10 members, including 4 independent directors, representing 40% of the board-significantly above the regulatory minimum of 20%. Three of the 10 directors are female, reflecting progress toward gender diversity at the board level. The roles of Chairman and President are separated, supporting stronger governance checks and balances. However, most non independent directors concurrently serve as executive managers, which may elevate concerns regarding board independence and management oversight from an ESG governance perspective. |
| G Capital | management 1 | Over the past 10 years, Faraday has kept its dividend payout ratio at above 70%most of the time, in spite of an up or down cycle. As an IC design service company without capex for manufacturing fabs, Faraday's high dividend payout is appropriate, in our view. |
| Related party & transaction | 1 | UMC, which is Faraday's largest shareholder, is Faraday's major foundry for its turnkey business. For IC design service companies, a close relationship with foundries is essential since their design should build on a foundry's process node and their turnkey businesses also require a foundry's capacity support. UMC's support offers Faraday a competitive advantage, in our view. Faraday has developed many standard cell and I/O libraries for UMC, covering logic and mixed-signal specialty processes across 0.5μ to 22nm. |
| S Supplychain management | 1 | Faraday has set several evaluation standards for its existing and new suppliers and it requires all suppliers to get ISO9001 and ISO14001 certifications for quality and environmental management. In 2024, 100% of its wafer, packaging and testing providers had ISO9001 and ISO14001 certifications. In addition, Faraday also has on-site audits (quality system and process quality audit, CSR evaluation and environment management system) for its suppliers with a mid- to-long term target of conducting annual onsite audits for 100% of its suppliers. |
| E Water&wastewater management | 1 | As an IC design service company, Faraday outsources its manufacturing and thus has no own production sites. As such, Faraday's water use is primarily for general operations, not for production. Faraday continues to conduct several water reduction measures to manage water usage. |
| E materials management | Waste & hazardous 1 | Faraday has established a green supply chain in accordance with the EU Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS) and with the EU Chemicals Policy (REACH). Faraday has a mid-to-long term target of carefully evaluating and selecting raw materials with low hazard levels to comply with the Hazardous Substance-Free Product Standard. All of its packaging materials are 100% lead-free and halogen-free. |
| E | GHGemissions 1 | With Faraday's energy saving measures, it reduced the GHG emissions intensity gradually. As an IC design service company without onsite production, Faraday's GHG emissions are much lower than other semiconductor manufacturing companies. Faraday's low power design also helps reduce GHG emissions. In 2019, Faraday completed the development of its ultra-low power consumption 22nm IP solution. |
Note: Management score represents a company's ability to manage/benefit from certain ESG topics. The scores range from 1 to 3, with 1 being the strongest.
Update Date: 10 Feb 2026
Source: Daiwa, Company