PDF 原檔：報告_MS_世界先進5347_20261029_original.pdf
原始內容
| Morgan Stanley Taiwan Limited+ Charlie Chan Equity Analyst C arlie.C an@morganstanley.com | +886 2 2730-1725 |
|---|---|
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| Morgan Stanley Asia Limited+ Daisy Dai, CFA Equity Analyst Daisy.Dai@morganstanley.com | +852 2848-7310 |
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Vanguard International Semiconductor(53 7.TWO, 53 7 TT)
Greater China Technology Semiconductors | Taiwan
| Stock ating | Stock ating | Stock ating | Stock ating | Underweight |
|---|---|---|---|---|
| Industry View | Industry View | Industry View | Industry View | Attractive |
| Price target | Price target | Price target | Price target | NT$135.00 |
| Up/ ownsi e to price target (%) | Up/ ownsi e to price target (%) | Up/ ownsi e to price target (%) | Up/ ownsi e to price target (%) | (14) |
| Shr price, close (Oct 29, 2026) | Shr price, close (Oct 29, 2026) | Shr price, close (Oct 29, 2026) | Shr price, close (Oct 29, 2026) | NT$156.50 |
| 52-Week Range | 52-Week Range | 52-Week Range | 52-Week Range | NT$223.00-87.60 |
| Sh out, il, curr (mn) | Sh out, il, curr (mn) | Sh out, il, curr (mn) | Sh out, il, curr (mn) | 1,858 |
| Mkt cap, curr (mn) | Mkt cap, curr (mn) | Mkt cap, curr (mn) | Mkt cap, curr (mn) | NT$290,841 |
| EV, curr (mn) | EV, curr (mn) | EV, curr (mn) | EV, curr (mn) | NT$268,295 |
| Avg aily tra ing value (mn) | Avg aily tra ing value (mn) | Avg aily tra ing value (mn) | Avg aily tra ing value (mn) | NT$3,515 |
| Fiscal Year Ending | 2/25 | 2/26e | 2/27e | 2/28e |
| EPS (NT$)** | 4.18 | 6.06 | 6.16 | 7.92 |
| Prior EPS (NT$)** | - | 5.46 | 6.76 | 8.32 |
| EPS (NT$)§ | 4.32 | 6.01 | 7.68 | 9.64 |
| Revenue, net (NT$ mn) | 48,591 | 58,598 | 77,345 | 93,859 |
| EBITDA (NT$ mn) | 16,326 | 21,887 | 30,365 | 37,115 |
| Mo elWare net inc (NT | 7,770 | 11,276 | 11,466 | 14,747 |
| $ mn) | ||||
| P/E | 22.0 | 25.8 | 25.4 | 19.8 |
| P/BV | 2.0 | 3.3 | 3.2 | 3.0 |
| ROE (%) | 11.3 | 13.5 | 13.2 | 16.4 |
| EV/EBITDA | 9.0 | 14.5 | 10.4 | 8.3 |
Unless otherwise note , all metrics are base on Morgan Stanley Mo elWare framework
- ** = Base on consensus metho ology
- § = Consensus ata is provi e by Refinitiv Estimates
- e = Morgan Stanley Research estimates
Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.
For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report.
= Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to FINRA restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
M Idea October 29, 2026 10:40 PM GMT
Vanguard International Semiconductor | Asia Pacific
Strong revenue but margin dilution; downgrade to UW
| What's Changed Vanguard International Semiconductor | (5347.TWO) From | To |
|---|---|---|
| Underweight | ||
| Rating | Equal-weight | |
| Price Target | NT$180.00 | NT$135.00 |
Vanguard could show strong revenue growth in 2027 from wafer price hikes and its new Singapore fab's contribution but we expect depreciation to weigh heavily on margin.
VSMC could cause high-single digit (%) dilution to 2027 GM - a ove many investors' 3-5% expectation: On Vanguard's latest earnings call, management noted a successful trial run of VisionPower Semiconductor Manufacturing Company, its JV with NXP Semiconductors It confirmed that interposers are on track for mass production in 1Q27 We see revenue upside from the ramp - but depreciation could heavily pressure margins Management previously guided that VSMC could break even at 30kwpm, more likely in late 2028, in our view (vs current 8-inch margin at 30-35%) VSMC capacity is scheduled at 44kwpm, ~100kwpm 8-inch equivalent, about one-third of current 8-inch capacity (280kwpm) On the other hand, we think new capacity may only run at <5kwpm in 1Q27 and <20kwpm by end-2027; depreciation reflects 44kwpm (VSMC's full capacity) for infrastructure, clean room, and construction We therefore project that VSMC's gross margin dilution in fullyear 2027 could be more severe than many expect
Despite strong customer commitment, VSMC could still dilute the corporate margin average for at least the next five years: Since management previously guided that VSMC could break even at 30kwpm, we view its break-even point as late 2028 or 1H29 It will then take years for GM to rise from 0% to 30-40%, even if the capacity is fully booked We thus expect a drag on corporate average GM for at least the next five years The good news: VSMC demand is skewed to high-margin businesses - interposers, industrial, and automotive - so the margin improvement could be smoother vs peers like Hua Hong
2027 might ring dou le-digit wafer price hikes and AI-related revenue at 20-
30% of the mix: During its latest earnings call, UMC guided for a 10% blended wafer ASP increase in 2027 Given larger exposure to AI server PMIC, industrial, and automotive, we expect Vanguard to raise 8-inch wafer prices 10-15% for the full year Given some customer pushback to front-loaded hikes, the price hike might be split - twice a year, each 5-10% Also, the company would still have LTAs expiring in 2027, so we don't expect aggressive wafer ASP guidance for 1Q27 With new interposer production, we believe AI-related revenue could reach 20-30% of total revenue
Down to UW from EW: The margin impact is larger than we initially expected and could last 5-10 years Our new price target implies 2 8x our 2027e BVPS
M Idea
Vanguard could still show strong revenue/margin performance for 2H26
4Q26 should maintain strong growth: We expect Vanguard to sustain strong performance into 4Q26, supported by resilient demand from the industrial and automotive end markets In addition to a favorable demand outlook, ongoing capacity optimization initiatives, particularly the transition from thicker-wire to thinner-wire manufacturing processes, should enhance production efficiency, improve capacity utilization, and support higher output These operational improvements, coupled with a favorable product mix and steady order momentum, could further underpin revenue growth and profitability in 4Q26 We now expect Vanguard 8-inch process margin to reach 34-36% in both 4Q26 and 1Q27
Exhibit 1: Vanguard: 3Q26 Earnings and 4Q26 Guidance Preview
| (NT$ mn) | 3Q26 - Guidance | 3Q26 - Preliminary | 3Q26 - MS Est. | 3Q26 - Consensus | 4Q26 - Guidance | 4Q26 - MS Est. | 4Q26 - Consensus |
|---|---|---|---|---|---|---|---|
| Revenue | Wafer shipment increases 1-3% Q/Q ASP up 2-4% Q/Q | 15,702 | 15,702 | 15,454 | 16,119 | 16,519 | |
| Q/Q | 8.5% | 6.9% | |||||
| Y/Y | 25.1% | 31.2% | |||||
| GM (%) | 32.5% - 34.5% | 33.4% | 33.5% | 34.5% | 34.5% | ||
| OpM (%) | 21.8% | 21.4% | 22.8% | 22.4% | |||
| EPS (NT$) | 1.62 | 1.58 | 1.73 | 1.74 |
Source: Company Data, Visible Alp a, Morgan Stanley Researc Estimates
Key questions to ask during the upcoming earnings call on Novem er 6:
- 1 Price hike into 2027: How much of the incremental cost could Vanguard pass through to customers? Could we see double-digit apples-to-apples price hikes into 2027 despite the expiration of some LTAs?
- 2 AI-related revenue: How much could AI related revenue grow in 2027 if we include both AI server PMIC and interposer production?
- 3 Singapore fa - margin dilution and capacity allocation: How could margin be affected by VSMC in both 2027 and 2028? How much would depreciation be in 2027 and 2028? How would the company allocate 12-inch capacity between interposers, NXP, and other customers?
- 4 Consumer demand: Has the company seen any slowdown in consumer demand? And how soon could that capacity be filled up by other sources of demand?
- 5 Further capacity expansion: Might the company have further plans to expand 8inch capacity or second Singapore fab since the utilization rate has been reaching >90%?
M Idea
Exhibit 2: Vanguard's utilization rate could bottom in 4Q26
Source: Company data, Refinitiv, Morgan Stanley Researc (e) estimates
Exhibit 3: Vanguard's GM may decline s arply in 2027
Source: Company data, Refinitiv, Morgan Stanley Researc (e) estimates M Idea Source: Company data, Morgan Stanley Researc estimates M Idea
| US$ | Hua Hong Wuxi fab 9 (40- 55nm) |
|---|---|
| Total capex (US$ mn) | 6,700 |
| Infrastructure (US$ mn) | 1,150 |
| Equipment (US$ mn) | 5,550 |
| Capacity (kwpm) | 83 |
| capex per kwpm (US$ mn) | 67 |
| Annual depreciation per k (US$ mn) | 1.0 |
| Annual depreciation per wafer (US$) | 986 |
| Wafer price (US$/ per wafer) | 1,650 |
| depreciation cost (US$/ per wafer) | 986 |
| other cost (US$/ per wafer) | 400 |
| Gross profit (US$/ per wafer) | 264 |
| New investment plan GM | 16% |
Exhibit 4: We expect t at VSMC 's margin could be close to 20% w en 44kwpm of t e capacity is running at full utilization and t e equipment is still amid five-year depreciation
| US$ | VSMC JV (40- 130nm) |
|---|---|
| Total capex (US$ mn) | 6,700 |
| Infrastructure (US$ mn) | 3,180 |
| Equipment (US$ mn) | 3,520 |
| Capacity (kwpm) | 44 |
| capex per kwpm (US$ mn) | 80 |
| Annual depreciation per k (US$ mn) | 1.6 |
| Annual depreciation per wafer (US$) | 1,634 |
| Wafer price (US$/ per wafer) | 2,700 |
| depreciation cost (US$/ per wafer) | 1,634 |
| other cost (US$/ per wafer) | 520 |
| Gross profit (US$/ per wafer) | 546 |
| New investment plan GM | 20% |
| 2026e GM | 33% |
Vanguard: Earnings estimate revisions
We raise our 2026 EPS forecast 11% ut lower 2027 and 2028 EPS estimates 9% and 5%, respectively: We factor in the smooth production ramp of VSMC and see revenue upside from our previous estimates However, we also note more significant margin dilution from the new fab, leading to sharp cuts in margin assumptions for 2027/28
Exhibit 5: Vanguard: Earnings estimate revision summary
| (NT$ mn) | New 2026e | Old 2026e | Diff.% | New 2027e | Old 2027e | Diff.% | New 2028e | Old 2028e | Diff.% |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 58,598 | 56,799 | 3% | 77,345 | 68,133 | 14% | 93,859 | 77,468 | 21% |
| Gross profit | 19,088 | 18,011 | 6% | 20,812 | 21,152 | -2% | 25,777 | 24,892 | 4% |
| Operating profit | 12,095 | 11,033 | 10% | 13,067 | 14,227 | -8% | 17,171 | 17,862 | -4% |
| Pretax income | 13,523 | 12,441 | 9% | 14,332 | 15,723 | -9% | 18,434 | 19,359 | -5% |
| Net income | 11,276 | 10,167 | 11% | 11,466 | 12,579 | -9% | 14,747 | 15,487 | -5% |
| EPS (NT$) | 6.06 | 5.46 | 11% | 6.16 | 6.76 | -9% | 7.92 | 8.32 | -5% |
| Margins | |||||||||
| Gross margin | 32.6% | 31.7% | 26.9% | 31.0% | 27.5% | 32.1% | |||
| Operating margin | 20.6% | 19.4% | 16.9% | 20.9% | 18.3% | 23.1% | |||
| Pretax margin | 23.1% | 21.9% | 18.5% | 23.1% | 19.6% | 25.0% | |||
| Net margin | 19.2% | 17.9% | 14.8% | 18.5% | 15.7% | 20.0% |
Source: Morgan Stanley Researc (e) estimates
Exhibit 6: Vanguard: Quarterly financials
| (NT$ mn) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 | 2Q26 | 3Q26e | 4Q26e | 2024 | 2025 | 2026e | 2027e | 2028e |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Revenues | 11,949 | 11,699 | 12,349 | 12,594 | 12,532 | 14,245 | 15,702 | 16,119 | 44,055 | 48,591 | 58,598 | 77,345 | 93,859 |
| Sequential Change | 3.4% | -2.1% | 5.6% | 2.0% | -0.5% | 13.7% | 10.2% | 2.7% | |||||
| Change vs Year Ago | 24.0% | 5.7% | 4.6% | 9.0% | 4.9% | 21.8% | 27.2% | 28.0% | 15.1% | 10.3% | 20.6% | 32.0% | 21.4% |
| Cost of Sales | (8,352) | (8,419) | (9,037) | (9,129) | (8,861) | (9,640) | (10,454) | (10,555) | (32,122) | (34,937) | (39,510) | (56,532) | (68,082) |
| Percent of Revenues | 69.9% | 72.0% | 73.2% | 72.5% | 70.7% | 67.7% | 66.6% | 65.5% | 72.9% | 71.9% | 67.4% | 73.1% | 72.5% |
| Gross Profit | 3,597 | 3,280 | 3,312 | 3,465 | 3,671 | 4,604 | 5,248 | 5,564 | 11,933 | 13,654 | 19,088 | 20,812 | 25,777 |
| Percent of Revenues | 30.1% | 28.0% | 26.8% | 27.5% | 29.3% | 32.3% | 33.4% | 34.5% | 27.1% | 28.1% | 32.6% | 26.9% | 27.5% |
| Total Opex | (1,359) | (1,384) | (1,480) | (1,658) | (1,584) | (1,704) | (1,822) | (1,882) | (4,822) | (5,880) | (6,993) | (7,745) | (8,606) |
| Percent of Revenues | 11.4% | 11.8% | 12.0% | 13.2% | 12.6% | 12.0% | 11.6% | 11.7% | 10.9% | 12.1% | 11.9% | 10.0% | 9.2% |
| R&D | (521) | (522) | (565) | (582) | (610) | (680) | (730) | (780) | (2,081) | (2,190) | (2,801) | (2,900) | (3,240) |
| Percent of Revenues | 4.4% | 4.5% | 4.6% | 4.6% | 4.9% | 4.8% | 4.7% | 4.8% | 4.7% | 4.5% | 4.8% | 3.7% | 3.5% |
| Sales and Marketing | (129) | (120) | (144) | (163) | (159) | (182) | (200) | (206) | (449) | (557) | (747) | (1,005) | (1,126) |
| Percent of Revenues | 1.1% | 1.0% | 1.2% | 1.3% | 1.3% | 1.3% | 1.3% | 1.3% | 1.0% | 1.1% | 1.3% | 1.3% | 1.2% |
| General and Admin | (709) | (741) | (771) | (912) | (815) | (842) | (892) | (897) | (2,291) | (3,133) | (3,445) | (3,840) | (4,240) |
| Percent of Revenues | 5.9% | 6.3% | 6.2% | 7.2% | 6.5% | 5.9% | 5.7% | 5.6% | 5.2% | 6.4% | 5.9% | 5.0% | 4.5% |
| Operating Income | 2,238 | 1,897 | 1,832 | 1,807 | 2,087 | 2,901 | 3,426 | 3,682 | 7,111 | 7,773 | 12,095 | 13,067 | 17,171 |
| Percent of Revenues | 18.7% | 16.2% | 14.8% | 14.3% | 16.7% | 20.4% | 21.8% | 22.8% | 16.1% | 16.0% | 20.6% | 16.9% | 18.3% |
| Total Non-operating Income(Loss) | 437 | 485 | 267 | 288 | 350 | 412 | 333 | 333 | 1,641 | 1,477 | 1,428 | 1,266 | 1,263 |
| Profit Before Taxes | 2,675 | 2,382 | 2,099 | 2,095 | 2,437 | 3,313 | 3,759 | 4,015 | 8,752 | 9,251 | 13,523 | 14,332 | 18,434 |
| Percent of Revenues | 22.4% | 20.4% | 17.0% | 16.6% | 19.4% | 23.3% | 23.9% | 24.9% | 19.9% | 19.0% | 23.1% | 18.5% | 19.6% |
| Change vs Year Ago | 67.7% | 11.0% | -21.6% | -10.2% | -8.9% | 39.1% | 79.1% | 91.6% | |||||
| Taxes | (269) | (369) | (414) | (429) | (273) | (420) | (752) | (803) | (1,705) | (1,480) | (2,247) | (2,866) | (3,687) |
| Tax Rate | 10.0% | 15.5% | 19.7% | 20.5% | 11.2% | 12.7% | 20.0% | 20.0% | 19.5% | 16.0% | 16.6% | 20.0% | 20.0% |
| Reported Income (TW GAAP) | 2,406 | 2,013 | 1,685 | 1,666 | 2,164 | 2,894 | 3,007 | 3,212 | 7,047 | 7,770 | 11,276 | 11,466 | 14,747 |
| Percent of Revenues | 20.1% | 17.2% | 13.6% | 13.2% | 17.3% | 20.3% | 19.1% | 19.9% | 16.0% | 16.0% | 19.2% | 14.8% | 15.7% |
| Change vs Year Ago | 89.1% | 11.9% | -21.0% | -9.6% | -10.1% | 43.8% | 78.4% | 92.7% | -4.4% | 10.3% | 45.1% | 1.7% | 28.6% |
| EPS (NT$) | 1.30 | 1.09 | 0.91 | 0.90 | 1.16 | 1.55 | 1.62 | 1.73 | 3.81 | 4.18 | 6.06 | 6.16 | 7.92 |
| Change vs Year Ago | 68.2% | -0.3% | -29.9% | -10.1% | -10.3% | 43.1% | 78.4% | 92.7% | -14.5% | 9.9% | 44.9% | 1.7% | 28.6% |
| Weighted Average Shares | 1,857 | 1,853 | 1,862 | 1,862 | 1,862 | 1,862 | 1,862 | 1,862 | 1,852 | 1,858 | 1,862 | 1,862 | 1,862 |
Source: Company data, Morgan Stanley Researc (e) estimates
M Idea
Valuation methodology
We lower our price target ( ase case value) to NT$135 from NT$180: We factor in our earnings estimate changes for 2027-28 and also lower the intermediate growth rate assumption from 13% to 10 5% to reflect the long-term margin dilution
We continue to derive our price target from a residual income model, which we believe best captures the stock's long-term value Our key assumptions other than the intermediate growth rate are unchanged, including a cost of equity of 9 2% (beta of 1 2, equity risk premium of 6% and risk-free rate of 2%), and a terminal growth rate of 4 0%
We also lower our bull and bear case values from NT$260 and NT$110 to NT$195 and NT $80, accordingly, implying 4 0x and 1 7x our 2027e BVPS
Exhibit 7: Vanguard: Residual income model
| (NT$ mn) | 2026e | 2027e | 2028e | 2029e | 2030e | 2031e | 2032e | 2033e | 2034e | 2035e | 2036e | 2037e |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Equity | 86,706 | 89,715 | 95,863 | 105,882 | 116,952 | 129,185 | 142,702 | 157,639 | 174,144 | 192,382 | 212,535 | 234,804 |
| Net Profit | 11,276 | 11,466 | 14,747 | 16,296 | 18,007 | 19,897 | 21,987 | 24,295 | 26,846 | 29,665 | 32,780 | 36,222 |
| ROAE | 13.2% | 13.0% | 15.9% | 16.2% | 16.2% | 16.2% | 16.2% | 16.2% | 16.2% | 16.2% | 16.2% | 16.2% |
| Residual Income | 3,379 | 3,293 | 6,005 | 6,667 | 7,371 | 8,149 | 9,008 | 9,958 | 11,008 | 12,168 | 13,449 | 14,865 |
| Spread | 4.0% | 3.8% | 6.7% | 7.0% | 7.0% | 7.0% | 7.0% | 7.0% | 7.0% | 7.0% | 7.0% | 7.0% |
| Ending Equity Capital | 86,706 | |||||||||||
| PV of Forecast Period | 50,826 | |||||||||||
| PV of Continuing Value | 113,835 | |||||||||||
| Equity Value | 251,368 | |||||||||||
| No. of Shares | 1,862 | |||||||||||
| Projected Price (NT$) | 135.0 |
Source: Company data, Morgan Stanley Researc (e) estimates
Exhibit 8: Vanguard: One-year forward P/B c art
Source: FactSet, company data, Morgan Stanley Researc estimates
Exhibit 9: Vanguard: One-year forward P/B vs. ROE
Source: FactSet, Company data, Morgan Stanley Researc estimates M Idea
Risk Reward - Vanguard International Semiconductor Risk Reward - Vanguard International Semiconductor (5347.TWO)
(5347.TWO) Heavy Depreciation from fab in Singapore; UW
NT$135.00 PRICE TARGET
Base case, residual income model. Key assumptions: a cost of equity of 9.2%, a medium-term growth rate of 10.5%, and a terminal growth rate of 4.0%.
NT$185.64
Mean
Consensus Price Target Distribution
NT$89.00
NT$250.00
Source: Refinitiv, Morgan Stanley Research
RISK REWARD CHART
Key: Historical Stock Performance Current Stock Price Price Target
Source: Refinitiv, Morgan Stanley Research
BULL CASE
BASE CASE
UNDERWEIGHT THESIS
- ▪We expect 2026 capex to increase beyond 2025's high level given Singapore fab expansion, leading to long-term margin pressure.
- ▪We expect PMIC wafer price hikes in the industry in response to strong demand from AI. Vanguard could benefit from TSMC mature node consolidation as well as interposer production.
- ▪The new Singapore fab could cause highsingle-digit margin dilution to the corporate average in 2027.
- ▪VSMC's 12-inch capacity is all fully booked; production will start to ramp in 2027 with depreciation pressure during the early stage.
- ▪Our UW rating is mostly because of the margin pressure.
Source: Refinitiv, Morgan Stanley Research
Risk Reward Themes
Disruption:
Pricing Power:
Negative Positive
View descriptions of Risk Rewards Themes here
BEAR CASE
4.0x base case 2027e BVPS
Healthy semi demand: Auto semi demand is exceptionally strong; inventory is digested quickly, and DDI for smartphones and large panels shows robust growth. We forecast a >30% revenue CAGR in 2025-28. Competition from peers eases. We assume: 1) global semi sales growth of >20% and foundry industry growth of >15% in 2026; 2) better-than-expected demand for 8" capacity; and 3) power demand for 5G tracking ahead of schedule.
2.8x base case 2027e BVPS
Semi growth slowdown: Demand has started to pick up for LDDIC and PMIC, while auto semis inventory digestion is reaching an end. We forecast a 25% revenue CAGR in 2025-28. Vanguard starts to reverse pricing discounts to customers in view of stronger demand and some rush orders in the short run. We assume: 1) global semi sales show growth in 2026; and 2) the foundry industry shows single-digit growth in 2026.
NT$80.00
1.7x base case 2027e BVPS
Semi growth decelerates: Auto semi demand weakens markedly; power semi inventory levels remain elevated. Smartphone DDI shows a worse-than-expected decline. Intensified competition and new Chinese capacity dampen the overall pricing environment. We forecast <10% revenue CAGR in 2025-28. We assume: 1) overall semi industry continues to decelerate in 2026 and foundry growth is stagnant; and 2) demand for 8" capacity is weaker than expected owing to faster product migration.
NT$195.00
Morgan Stanley Estimates
MS PT
NT$135.00
M Idea
Risk Reward - Vanguard International Semiconductor (5347.TWO)
KEY EARNINGS INPUTS
| Drivers | Dec 2025 | Dec 2026e | Dec 2027e | Dec 2028e |
|---|---|---|---|---|
| Wafer shipment (k 8 inch) | 2,522 | 2,847 | 3,280 | 866 |
| Wafer ASP (USD) | 573.0 | 638.4 | 698.8 | 781.7 |
| Utilization rate (%) (%) | 71.8 | 84.4 | 89.0 | 87.0 |
INVESTMENT DRIVERS
- Smartphone/TV demand
- Persistent drop in analog IDMs' inventory
- Easing competition in 8" foundry business with pricing rebound
GLOBAL REVENUE EXPOSURE
Source: Morgan Stanley Research Estimate View explanation of regional hierarchies here
MS ALPHA MODELS
3/5 MOST
3 Month
Horizon
Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is the highest favored Quintile and 5 is the least favored Quintile
RISKS TO PT/RATING
RISKS TO UPSIDE
- Stronger-than-expected LCD driver IC demand
- Loosened competition in power semi business
- Faster-than-expected EV penetration
- Inability of IDM customers to move production in-house
RISKS TO DOWNSIDE
- Inability to fully utilize VSMC 12-inch investment
- Weaker-than-expected LCD driver IC demand
- Intensified competition in power semi business
- Slower-than-expected EV penetration
- IDM customers moving production in-house
OWNERSHIP POSITIONING
Inst. Owners, % Active
83.9%
Source: Refinitiv, Morgan Stanley Research
MS ESTIMATES VS. CONSENSUS
Source: Refinitiv, Morgan Stanley Research M Idea
Vanguard: Financial summary
2025 2026e 2027e 2028e NT$mn (Years End Dec )
(32,122) (34,937) (39,510) (56,532) (68,082) Net profits
(3,240) Other adjustments
(5,366) Cash flow from Investing
(3,687) Other adjustments
| Income Statement NT$ mn (Years End Dec ) | 2024 | 2025 | 2026e | 2027e | 2028e |
|---|---|---|---|---|---|
| Net sales | 44,055 | 48,591 | 58,598 | 77,345 | 93,859 |
| COGS | (32,122) | (34,937) | (39,510) | (56,532) | (68,082) |
| Gross profit | 11,933 | 13,654 | 19,088 | 20,812 | 25,777 |
| Operating expenses | (4,822) | (5,880) | (6,993) | (7,745) | (8,606) |
| R&D | (2,081) | (2,190) | (2,801) | (2,900) | (3,240) |
| SG&A | (2,740) | (3,691) | (4,192) | (4,845) | (5,366) |
| Operating income | 7,111 | 7,773 | 12,095 | 13,067 | 17,171 |
| Non-operating income | 1,641 | 1,477 | 1,428 | 1,266 | 1,263 |
| Pre-tax income | 8,752 | 9,251 | 13,523 | 14,332 | 18,434 |
| Income tax | (1,705) | (1,480) | (2,247) | (2,866) | (3,687) |
| Net income | 7,047 | 7,770 | 11,276 | 11,466 | 14,747 |
| Adj.wtd.avg.shrs (mn) | 1,852 | 1,858 | 1,862 | 1,862 | 1,862 |
| Reported EPS (NT$) | 3.81 | 4.18 | 6.06 | 6.16 | 7.92 |
| EPS for consensus (NT$) | 3.81 | 4.18 | 6.06 | 6.16 | 7.92 |
| Cash Flow Statement NT$mn (Years End Dec ) | 2024 | 2025 | 2026e | 2027e | 2028e |
|---|---|---|---|---|---|
| Cash flow from Operations | 24,731 | 25,439 | 23,273 | 37,729 | 40,267 |
| Net profits | 7,047 | 7,770 | 11,276 | 11,466 | 14,747 |
| Depreciation | 8,622 | 8,552 | 9,792 | 17,298 | 19,944 |
| Equity investment losses (income) | (84) | (209) | 0 | 0 | 0 |
| Other adjustments | 9,145 | 9,326 | 2,205 | 8,964 | 5,575 |
| Cash flow from Investing | (11,699) | (59,711) | (64,554) | (26,662) | (26,234) |
| Capex | (15,909) | (63,265) | (64,554) | (26,662) | (26,234) |
| Change of LT Investment | (2,480) | (0) | 0 | 0 | 0 |
| Change of ST Investment | 6,837 | 1,183 | 0 | 0 | 0 |
| Other adjustments | (147) | 2,371 | 0 | 0 | 0 |
| Cash flow from financing | 17,530 | 13,460 | 71,841 | (8,457) | (8,599) |
| Increase in L/T debt | 0 | 2,000 | 0 | 0 | 0 |
| Increase in S/T debt | 0 | 5,519 | 80,000 | 0 | 0 |
| Cash Dividend Paid | (7,375) | (8,400) | (8,159) | (8,457) | (8,599) |
| Dir& Emp Bonus Paid | 0 | 0 | 0 | 0 | 0 |
| Issuance of stock | 0 | 0 | 0 | 0 | 0 |
| Dec/Inc-TreasureSt | 0 | 0 | 0 | 0 | 0 |
| Other Adjustments | 21,905 | 14,341 | 0 | 0 | 0 |
| Net change in cash | 30,562 | (20,812) | 30,560 | 2,610 | 5,433 |
60,695 39,635 70,195 72,805 78,238 Growth(%)
7,828 10,333 12,539 Operating profits
9,420 Margins (%)
44,141 113,869 168,631 177,995 184,285 Gross Margin
10,905 10,282 10,282 10,282 10,282 Operating Margin
37,679 49,285 49,285 49,285 49,285 Gearing (%)
68,667 83,590 86,706 89,715 95,863 Quick ratio
| Balance Sheet NT$mn (Years End Dec ) | 2024 | 2025 | 2026e | 2027e | 2028e |
|---|---|---|---|---|---|
| Cash | 60,695 | 39,635 | 70,195 | 72,805 | 78,238 |
| Mkt Securities | 8,929 | 2,640 | 2,640 | 2,640 | 2,640 |
| AR/NR | 6,235 | 6,748 | 7,828 | 10,333 | 12,539 |
| Inventory | 6,221 | 6,937 | 7,440 | 10,645 | 12,820 |
| Other | 4,131 | 10,937 | 10,937 | 10,937 | 10,937 |
| Current Assets | 86,211 | 66,897 | 99,040 | 107,360 | 117,174 |
| Long-term investments | 7,448 | 9,420 | 9,420 | 9,420 | 9,420 |
| Fixed assets | 44,141 | 113,869 | 168,631 | 177,995 | 184,285 |
| Other assets | 10,905 | 10,282 | 10,282 | 10,282 | 10,282 |
| Total Assets | 148,706 | 200,469 | 287,374 | 305,057 | 321,161 |
| S/T borrowings | 0 | 5,521 | 5,521 | 5,521 | 5,521 |
| AP/NP | 1,416 | 1,724 | 1,776 | 2,541 | 3,060 |
| Other ST liabilities | 19,959 | 44,359 | 128,096 | 142,005 | 151,442 |
| LT debt | 20,984 | 15,990 | 15,990 | 15,990 | 15,990 |
| Other LT liabilities | 37,679 | 49,285 | 49,285 | 49,285 | 49,285 |
| Total Liabilities | 80,039 | 116,879 | 200,667 | 215,341 | 225,297 |
| Common shares | 18,666 | 18,671 | 18,671 | 18,671 | 18,671 |
| Retained earning | 31,135 | 45,904 | 49,020 | 52,029 | 58,177 |
| Other shareholders' equity | 18,865 | 19,015 | 19,015 | 19,015 | 19,015 |
| Total Equity | 68,667 | 83,590 | 86,706 | 89,715 | 95,863 |
| Total Liab. & Shrhldr's Equity | 148,706 | 200,469 | 287,374 | 305,057 | 321,161 |
| Financial Ratios | 2024 | 2025 | 2026e | 2027e | 2028e |
|---|---|---|---|---|---|
| Growth(%) | |||||
| Turnover | 15.1 | 10.3 | 20.6 | 32.0 | 21.4 |
| Operating profits | 23.2 | 9.3 | 55.6 | 8.0 | 31.4 |
| Pretax profits | (0.9) | 5.7 | 46.2 | 6.0 | 28.6 |
| Net profits | (4.4) | 10.3 | 45.1 | 1.7 | 28.6 |
| EPS | (14.5) | 9.9 | 44.9 | 1.7 | 28.6 |
| Margins (%) | |||||
| Gross Margin | 27.1 | 28.1 | 32.6 | 26.9 | 27.5 |
| Operating Margin | 16.1 | 16.0 | 20.6 | 16.9 | 18.3 |
| Pretax Margin | 19.9 | 19.0 | 23.1 | 18.5 | 19.6 |
| Net Profit | 16.0 | 16.0 | 19.2 | 14.8 | 15.7 |
| Return (%) | |||||
| ROAA | 5.6 | 4.5 | 4.6 | 3.9 | 4.7 |
| ROAE | 12.3 | 10.2 | 13.2 | 13.0 | 15.9 |
| Gearing (%) | |||||
| Net Debt/Equity | (57.8) | (21.7) | (56.1) | (57.2) | (59.2) |
| Liabilities/Equity | 116.6 | 139.8 | 231.4 | 240.0 | 235.0 |
| Ratios (X) | |||||
| Current ratio | 4.0 | 1.3 | 0.7 | 0.7 | 0.7 |
| Quick ratio | 3.5 | 0.9 | 0.6 | 0.6 | 0.6 |
| Others | |||||
| AR/NR Turnover (days) | 48.7 | 48.8 | 48.8 | 48.8 | 48.8 |
| Inventory Turnover (days) | 67.6 | 68.7 | 68.7 | 68.7 | 68.7 |
| AP Turnover (days) | 13.6 | 16.4 | 16.4 | 16.4 | 16.4 |
| Cash Conversion (days) | 102.7 | 101.1 | 101.1 | 101.1 | 101.1 |
E = Morgan Stanley Research Estimates Source: Morgan Stanley Research, Company Data M Idea
Risk Reward Reference links
1 View explanation of Options Probabilities methodology -
Options_Probabilities_Exhibit_Link pdf
- 2 View descriptions of Risk Rewards Themes - RR_Themes_Exhibit_Link pdf
- 3 View explanation of regional hierarchies - GEG_Exhibit_Link pdf
4 View explanation of Theme/Exposure methodology -
ESG_Sustainable_Solutions_External_Link pdf
- 5 View explanation of HERS methodology - ESG_HERS_External_Link pdf
M Idea
INDUSTRY COVERAGE: Greater China Technology Semiconductors
| Company (Ticker) | ating (As Of) | Price* (10/29/2026) |
|---|---|---|
| Charlie Chan | ||
| A vance Wireless Semicon uctor Co (8086.TWO) | U (07/14/2025) | NT$122.00 |
| Alchip Technologies Lt (3661.TW) | O (05/14/2021) | NT$3,680.00 |
| ASE Technology Hol ing Co. Lt . (3711.TW) | O (09/15/2024) | NT$683.00 |
| Cambricon Technology Corporation (688256.SS) | O (04/27/2026) | Rmb913.00 |
| CXMT Corp (688825.SS) | O (08/26/2026) | Rmb42.87 |
| Global Unichip Corp (3443.TW) | O (06/24/2026) | NT$7,640.00 |
| GlobalWafers Co Lt (6488.TWO) | E (05/19/2026) | NT$814.00 |
| Gu eng Precision (3680.TWO) | O (11/25/2025) | NT$521.00 |
| Hua Hong Semicon uctor Lt (1347.HK) | E (03/12/2026) | HK$64.60 |
| Iluvatar CoreX Semicon uctor Co., Lt . (9903.HK) | O (04/27/2026) | HK$67.15 |
| Me iaTek (2454.TW) | O (11/28/2025) | NT$4,045.00 |
| MetaX Integrate Circuits (688802.SS) | E (04/27/2026) | Rmb457.22 |
| Nanya Technology Corp. (2408.TW) | O (05/28/2026) | NT$477.00 |
| Phison Electronics Corp (8299.TWO) | E (02/25/2026) | NT$2,050.00 |
| SG Micro Corp. (300661.SZ) | E (11/03/2025) | Rmb88.59 |
| Silergy Corp. (6415.TW) | U (05/19/2026) | NT$524.00 |
| SMIC (0981.HK) | O (10/21/2025) | HK$44.96 |
| TSMC (2330.TW) | O (02/07/2022) | NT$2,415.00 |
| UMC (2303.TW) | O (05/19/2026) | NT$115.50 |
| Vanguar International Semicon uctor (5347.TWO) | U (10/29/2026) | NT$156.50 |
| WIN Semicon uctors Corp (3105.TWO) | O (10/29/2026) | NT$594.00 |
| Daisy Dai, CFA | ||
| ASMPT Lt (0522.HK) | O (07/24/2025) | HK$113.20 |
M Idea
| China Resources Microelectronics Limite (688396.SS) | U (03/02/2026) | Rmb48.63 |
|---|---|---|
| Empyrean Technology Co Lt (301269.SZ) | E (01/17/2025) | Rmb97.70 |
| Hangzhou Silan Microelectronics Co. Lt . (600460.SS) | U (08/25/2025) | Rmb24.18 |
| Hygon Information Technology Co., Lt . (688041.SS) | O (07/03/2026) | Rmb185.88 |
| Innoscience (2577.HK) | E (10/13/2025) | HK$29.50 |
| JCET Group Co Lt (600584.SS) | O (09/16/2026) | Rmb51.87 |
| Shanghai Fu an Microelectronics (1385.HK) | O (03/07/2025) | HK$22.64 |
| SICC Co Lt (688234.SS) | O (03/20/2026) | Rmb75.68 |
| SJ Semicon uctor Corp (688820.SS) | E (09/16/2026) | Rmb78.28 |
| StarPower Semicon uctor Lt (603290.SS) | E (05/14/2026) | Rmb69.07 |
| Unigroup Guoxin Microelectronics Co Lt (002049.SZ) | U (01/10/2023) | Rmb47.78 |
| Universal Scientific In . (Shanghai) (601231.SS) | O (11/05/2025) | Rmb19.82 |
| Yangjie Technology (300373.SZ) | O (06/10/2022) | Rmb72.84 |
| Daniel Yen, CFA | ||
| AP Memory Technology Corp (6531.TW) | O (07/11/2025) | NT$841.00 |
| ASMe ia Technology Inc (5269.TW) | U (10/03/2025) | NT$1,465.00 |
| Aspee Technology (5274.TWO) | O (06/09/2025) | NT$16,980.00 |
| Egis Technology Inc (6462.TWO) | E (01/28/2026) | NT$98.60 |
| Elan Microelectronics Corp (2458.TW) | O (10/03/2025) | NT$129.00 |
| eMemory Technology Inc (3529.TWO) | O (08/18/2026) | NT$2,540.00 |
| Espressif Systems (688018.SS) | O (05/15/2023) | Rmb134.42 |
| GigaDevice Semicon uctor Beijing Inc (603986.SS) | O (05/15/2025) | Rmb275.99 |
| Himax Technologies Inc (HIMX.O) | E (02/04/2026) | US$11.69 |
| Macronix International Co Lt (2337.TW) | O (09/18/2025) | NT$100.00 |
| Montage Technology Co Lt (6809.HK) | O (03/18/2026) | HK$215.00 |
| Montage Technology Co Lt (688008.SS) | O (03/18/2026) | Rmb166.79 |
| Novatek (3034.TW) | U (02/04/2026) | NT$596.00 |
| Nuvoton Technology Corporation (4919.TW) | U (11/10/2025) | NT$133.00 |
| Para e Technologies Lt (4966.TWO) | U (10/29/2026) | NT$490.50 |
| Powerchip Semicon uctor Manufacturing Co (6770.TW) | O (10/27/2025) | NT$69.50 |
| Realtek Semicon uctor (2379.TW) | E (01/30/2026) | NT$794.00 |
| Shenzhen Goo ix Technology Co Lt (603160.SS) | U (07/14/2025) | Rmb59.53 |
| Silicon Motion (SIMO.O) | O (05/06/2024) | US$227.75 |
| Winbon Electronics Corp (2344.TW) | O (05/28/2026) | NT$170.50 |
| WPG Hol ings (3702.TW) | O (03/16/2026) | NT$110.00 |
| WT Microelectronics Co. Lt . (3036.TW) | O (01/27/2026) | NT$214.00 |
| Henry Zhao | ||
| ACM Research Inc (ACMR.O) | O (03/07/2023) | US$49.29 |
| A vance Micro-Fabrication Equipment Inc (688012.SS) | O (11/06/2023) | Rmb227.00 |
| Maxscen Microelectronics Co Lt (300782.SZ) | U (01/11/2021) | Rmb54.38 |
| NAURA Technology Group Co Lt (002371.SZ) | O (11/06/2023) | Rmb497.30 |
| OmniVision Integrate Circuits Group Inc (603501.SS) | E (10/29/2026) | Rmb85.79 |
| Lucas Wang | ||
| AllRing Tech Co. (6187.TWO) | O (09/23/2025) | NT$1,260.00 |
| FOCI Fiber Optic Communications Inc (3363.TWO) | E (10/09/2026) | NT$490.00 |
| Hon Precision (7769.TW) | O (04/17/2026) | NT$5,190.00 |
| King Yuan Electronics Co Lt (2449.TW) | O (03/03/2023) | NT$269.50 |
| MPI Corporation (6223.TWO) | O (04/17/2026) | NT$4,840.00 |
Stock Ratings are subject to c ange. Please see latest researc for eac company.
- Historical prices are not split adjusted.
© 2026 Morgan Stanley
圖片清單（已驗證 2026-10-30）
- 報告_MS_世界先進5347_20261029_001.png（83.0KB）：真資料圖（財務類，不嵌公司頁）。親眼所見：Exhibit 2 稼動率折線圖（1Q22–4Q28e），比較 SMIC、Hua Hong、Vanguard、UMC、PSMC、TSMC；Vanguard 2023 低點約 50%，2026 後約 85–90% 區間。
- 報告_MS_世界先進5347_20261029_002.png（62.4KB）：真資料圖（財務類，不嵌公司頁）。親眼所見：Exhibit 3 毛利率折線圖（1Q22–4Q28e），比較 SMIC GM、Hua Hong、Vanguard、UMC、PSMC；Vanguard 約 35%（4Q26e 前後）後於 1Q27e 降至約 26%，之後維持約 26–27%。
- 報告_MS_世界先進5347_20261029_009.png（49.8KB）：文字卡（評等與目標價歷史）。親眼所見：Vanguard 股價（藍線）與 MS 目標價（紅虛線）2023-10 至 2026 走勢，目標價標註 62/68/72/110/99/89/82.5/130/146/180 等，評等標記 U/A、E/A、E/I 等。
- 其餘 003–008（<40KB）：未逐張驗，多為估值／風險報酬／持股圖表小圖。