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報告_MS_聯發科2454_20260927

更新 2026-09-29

PDF 原檔:報告_MS_聯發科2454_20260927_original.pdf

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ingest 時建立的「眼見為憑」圖片索引,是 lib/ 嵌圖的唯一真相來源;<40KB 未列者預設 logo/小圖表,008(13KB)未 Read。

檔名 size 分類 親眼所見內容
報告_MS_聯發科2454_20260927_001.png 239KB 真資料圖 Nvidia 發表會投影片「Announcing NVLink Fusion — NVIDIA AI Factory Plus Custom ASIC」:圓形晶圓內為含多顆紫色運算區塊的客製 ASIC 版圖,右上放大標示「Custom ASIC with NVLink Fusion IP」,左右各三座機架(含 ASUS/GIGABYTE/Pegatron/Quanta 等標示)(報告 Exhibit 2,來源 Nvidia)
報告_MS_聯發科2454_20260927_003.png 249KB 真資料圖 「CoWoS Enables AI Compute Scaling」:縱軸 Interposer Size、橫軸 2016-2027,CoWoS-S 由 1.5-reticle 至 3.3-reticle、CoWoS-R 1.4-reticle、CoWoS-L/R 由 3.3-reticle 經 5.5-reticle 至 9.7-reticle(2027),右側附 SoC+HBM 與 SoIC+HBM+IO 封裝示意;1 reticle ~830mm²(報告 Exhibit 5,來源 Winway/TSMC)
報告_MS_聯發科2454_20260927_005.png 168KB 真資料圖 Intel「EMIB Scalability to Support AI Demand」:2023/2026/2028 三欄,Reticle size 約 4x/>8x/>12x,Package size 約 ~80x80/~120x120/~120x180,HBM 數 8/12/>24,EMIB 數 12/>20/>38,附各年封裝俯視示意(報告 Exhibit 7,來源 Intel)
報告_MS_聯發科2454_20260927_006.png 60KB 真資料圖 聯發科一年期預期本益比走勢圖 2006-2026:平均 18x、+1SD 23x、-1SD 12x,2026 年急升至約 36-40x(報告 Exhibit 11,財務估值類)
報告_MS_聯發科2454_20260927_010.png 60KB 真資料圖 聯發科股價(藍線)與 MS 目標價沿革(紅虛線)2023-09 至 2026-09,目標價末段標示 2088、2588、2988、5088、5588,股價收於約 5,300(財務股價類)
報告_MS_聯發科2454_20260927_007.png 39KB 真資料圖 Risk-reward 圖:現價 NT$5,285,12 個月後情境 bull NT$8,500(+60.83%)/base NT$6,188(+17.09%)/bear NT$3,150(-40.40%),選擇權隱含機率 >8,500 約 5.7%、>6,188 約 26.1%、<3,150 約 17.6%(財務股價類)
報告_MS_聯發科2454_20260927_002.png 21KB 真資料圖 堆疊長條「Total 2.5D packaging capacity」單位 kwpm:2026e 總 142(TSMC CoWoS 100、Non-TSMC CoWoS 37、Intel EMIB-T 5)/2027e 總 250(165/65/20)/2028e 總 374(230/95/45,另有 TSMC CoPoS 3.75)(報告 Exhibit 4)
報告_MS_聯發科2454_20260927_004.png 9KB 真資料圖 堆疊長條「Intel EMIB Capacity」kwpm:EMIB-T 2026e 5/2027e 20/2028e 45;EMIB-M 110/95/95(報告 Exhibit 6)
報告_MS_聯發科2454_20260927_009.png 37KB 真資料圖 FY2026e MS 預估對共識區間:營收 NT$671,881mn(共識均值 664,932)、EBITDA 140,344(133,436)、淨利 116,823(109,700)、EPS 73.35(68.47)(財務類)

原始內容

Morgan Stanley Taiwan Limited+ Charlie Chan Equity Analyst C arlie.C an@morganstanley.com +886 2 2730-1725
Daniel Yen, CFA Equity Analyst Daniel.Yen@morganstanley.com +886 2 2730-2863
Morgan Stanley Asia Limited+ Daisy Dai, CFA Equity Analyst Daisy.Dai@morganstanley.com +852 2848-7310
Morgan Stanley Taiwan Limited+ Lucas Wang Researc Associate Lucas.Wang@morganstanley.com +886 2 2730-2875

MediaTek(2454.TW, 2454 TT)

Top Pick

Greater China Technology Semicond ctors | Taiwan

Stock Rating Overweight Attractive
Ind stry View
Price target NT$6,188.00
Up/downside to price target (%) 1
Shr price, close (Sep 24, 2026) NT$5,285.00
52-Week Range NT$5,480.00-
1,130.00
Sh out, dil, curr (mn) 1,565
Mkt cap, curr (mn) NT$8,2 2,001
EV, curr (mn) NT$8,056,4 2
Avg daily trading value (mn) NT$26,540
Fiscal Year Ending 12/25 12/26e 12/27e 12/28e
EPS (NT$)** 66.1 3.35 146.9 342.3
Prior EPS (NT$)** 62. 9 3.22 - 308.25
EPS (NT$)§ 66.05 68.41 146.83 2 0.53
Revenue, net (NT$ bn) 596.0 6 1.9 1,095.6 2,315.2
ModelWare net inc (NT 105.3 116.8 233.8 545.3
$ bn) ROE (%) 26.0 28.5 48.8 8.6
Div yld (%) 19.2 0.0 0.0 0.0

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare framework

  • ** = Based on consensus methodology
  • § = Consensus data is provided 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 September 27, 2026 09:43 PM GMT

MediaTek | Asia Pacific

TSMC CoWoS support eases MediaTek's 2028 TPU production concerns; OW

What's Changed To
MediaTek (2454.TW) Price Target From NT$5,588.00 NT$6,188.00

Thesis largely unchanged but we raise our price target to NT $6 188 to bake in: 1) more secured TPU production in 2028 and 2) a second cloud AI ASIC revenue contribution.

Current debate: Can MediaTek meet Street 2028 forecasts given Intel MIB-T supply issue? Intel's EMIB-T substrate supply has been a potential bottleneck for future TPU v9 (" umufish") shipments in 2028, making some investors reluctant to own MediaTek. The issue stems from a supply-demand mismatch. We forecast 3mn TPU v9 units, as demand from Google (covered by Brian Nowak) remains strong. owever, as discussed in our AI Supply Chain Tracker, we expect only 2mn EMIB-T substrates, i.e. 40-45k wafer-equivalent EMIB-T capacity in 2028. This aligns with Digitimes' report that Google is considering CoWoS as a backup for its 2027 TPU on lagging EMIB-T substrate yields. For TSMC, supporting CoWoS could also help regain market share from EMIB-T. Our checks indicate that both MediaTek and TSMC are engaging to meet customer (Google) demand.

TSMC's willingness to support production increases confidence in our aggressive 2028 PS forecast: Assuming TSMC CoWoS-L can support 0.5mn TPU v9 units and EMIB-T can support 2.5mn units, our 3mn-unit target for 2028 appears highly achievable, with a higher ASP from the CoWoS version. CoWoS-L carries a structurally higher cost, and the RDL (redistribution layer) interposer connection requires tape-out of three additional photomask layers. owever, our checks also suggest that Google is willing to pay these incremental costs to secure dual sourcing, which should help MediaTek sustain its gross margin.

New debate: Who could be the second CSP customer? Investors have asked whether MediaTek could win Tesla's AI6 edge AI chip program. We believe AI6 is better suited to GUC, given its 10%-25% margin profile. Considering the higher tech content of MediaTek's design services, incl. IP + design capabilities, we believe MediaTek targets a 30%-35% margin profile. Instead, we see a growing probability that MediaTek wins a cloud AI ASIC project from an AI-focused CSP and/or AI lab customer through its Nvidia / NVLink Fusion partnership. In previous notes, we highlighted interest from both SpaceX and an AI lab customer. The customer's decision could come in 4Q26 and serve as a significant catalyst for MediaTek. With TPU upside and a potential new project, we expect MediaTek AI ASIC-related revenue of US$13.5bn and US$54bn in 2027 and 2028, resp., representing c.38% and 72% of total revenue. Reiterate Top Pick.

M Idea

TSMC CoWoS capacity support eases concerns regarding MediaTek 2028 TPU production

Smartphone market still lukewarm into 2027, but can serve as a long-term option value: At our recent China Best Conference, meetings involving China smartphone OEM and NAND module makers appeared to indicate China's smartphone demand may not recover in 2027, as mobile DRAM prices may not be falling anytime soon. We expect MediaTek's 3Q26 revenue to be ahead of guidance because of customer pull-in to avoid the SoC price hike rather than due to demand improvement.

That said, once AI smartphones become a killer application, MediaTek should rank among the best-positioned semiconductor companies to provide the edge computing capabilities required in handsets. We also believe 2028 should be a strong year for MediaTek's smartphone SoC business.

1. Google TPU supply chain update

TSMC CoWoS may support both 3nm (Zebrafish) and 2nm (Humufish) MediaTek TPU in 2028: In our earlier report, MediaTek: 2Q26 results preview: Smartphone weak, but Cloud AI taking off; OW (26 Jul 2026), we noted that MediaTek may secure a portion of CoWoS capacity for 2nm TPU to ensure minimum volume production. But, we believe it will use EMIB-T from Intel (covered by Joseph Moore) as the primary solution to reduce costs and scale volume in 2028, if execution proceeds well. Our recent industry checks suggest TSMC CoWoS would continue to support both 3nm (Zebrafish) and 2nm ( umufish) MediaTek TPU in 2028. We now assume around 500k units of 2nm TPU going through CoWoS production as a second source. The 3nm TPU in 2028 of around 2mn units is higher than our initial expectation of 1mn units. We therefore raise our MediaTek 2028 TPU revenue assumption to US$51.5bn.

2nm TPU TAM is supported by different SKU: At our AI Summit, MediaTek management stated that its design service is capable of both training and inference design. Recently, investors have been asking whether MediaTek is involved in the design of 2nm TriggerFish TPU, intended for AI inference. Our supply chain checks suggest this could be true. The TriggerFish chip has more features (I/O die upgrade, one more simulation die, and change of BM controller to BM4e), so we think MediaTek's 2nm TPU blended ASP could go higher. We estimate ASP at US$12-20k (we now model US$13k). But again, the EMIB-T substrate yield should be the key risk to volume.

CoWoS constraint eased, but ABF substrate supply still the gating factor for TPU bull case: In our recent AI supply chain tracker, we noted that MediaTek's 180k CoWoS-S booking implies ~3.6mn units of TPU 8t (ZebraFish) in 2027, above our original 3mn shipment assumption. owever, we continue to bake in some conservatism as we had assumed ABF substrate shortages. So, we still forecast 3mn units in 2027.

M Idea

Exhibit 1: MediaTek's Google TPU volume forecasts (v8t, v9, and v10) based on our Asia supply c ain c ecks

k Units 2023 2024 2025e 2026e 2027e 2028e
v5 500 2,400 250
v6 (Trillium) 1,200
v8t (Zebrafish; 3nm, by MediaTek) 500 3,000 2,000
v9 (Humufish; 2nm EMIB-T, by MediaTek) 2,500
v9 (Humufish; 2nm CoWoS, by MediaTek) 500
v10 (Icefish; 1.4nm, by MediaTek) unknown
Total 500 2,400 1,750 3,300 7,500 >9000

Source: Morgan Stanley Researc estimates

2. Who could be the second and third custo er for MediaTek in AI ASICs?

Through the NVLink Fusion platform, MediaTek's XPU customers can leverage NVIDIA's scale-up and scale-out networking technologies to build AI server systems.

In our report, MediaTek: NVIDIA and Alphabet Invest in MediaTek's CB for Extensive Partnership in ASIC; Stay OW, Top Pick (31 Aug 2026), we shared that MediaTek had maintained its 2027 ASIC TAM and market share guidance despite the broader partnership, noting that commercialization would take time. owever, we believe the partnership materially increases MediaTek's chances of winning a second CSP customer.

Overall, we see upside to our 2028 ASIC revenue assumptions, driven by: 1) a higher probability of winning a second or even third CSP customer; 2) greater revenue from material preparation; and 3) a strengthened partnership with Alphabet on TPU programs.

In today's research, we incorporate potential revenue contributions from new customers.

Exhibit 2: NVLink Fusion to support connection wit custom ASIC

報告_MS_聯發科2454_20260927_001

Source: Nvidia

MediaTek's second CSP customer could begin contributing revenue from subsystem builds in 2028: We believe the subsystem would include procurement of key components such as BM and ABF substrates, as well as wafer foundry capacity prepayments.

M Idea

Our checks suggest MediaTek may target subsystem builds for a second CSP customer rather than supplying the XPU itself. We now expect an initial revenue contribution in 2028, based on approximately 100k subsystem units at an ASP of US$25k.

We therefore assume a US$2.5bn revenue contribution in 2028, based on 100k units and an ASP of US$25k, including BM chip consignment, known-good dies (KGDs) for compute chips, and chiplets.

On margin trends, management highlighted continued value creation for customers across both silicon and packaging design. As a result, we expect ASICs to remain accretive to operating margins. At the gross margin level, management indicated that margins vary by project, potentially reflecting support for full-rack systems. We model 2nm TPU gross margins at c.35% (vs. c.40% for 3nm TPUs) given the larger revenue scale. We continue to expect operating margins of ~20-25%, above the smartphone business unit's 15-20%.

Exhibit 3: MediaTek AI ASIC/subsystem revenue projection

2027e 2028e 2029e
TPU v8t (Zebrafish) 3 2
TPU v9 (Humufish; EMIB-T) 2.5 4
Volume (mn) TPU v9 (Humufish; CoWoS) 0.5
TPU v10 (Icefish) 1
2nd Customer Subsystem 0.1 0.5
TPU v8t 4.5 4.5
TPU v9; EMIB-T 13 13
Chip ASP Recognized by MediaTek (US$k) TPU v9; CoWoS 20
TPU v10 18
2nd Customer Subsystem 25 25
TPU v8t 13.5 9
TPU v9; EMIB-T 32.5 52
TPU v9; CoWoS 10
Revenue (US$bn) TPU v10 18
Total TPU Revenue 13.5 51.5 70
2nd Customer Subsystem 2.5 12.5
Total MediaTek Revenue (US$bn) Total MediaTek Revenue (US$bn) 35 75 NA
AI ASIC Revenue % AI ASIC Revenue % 38% 72% NA

Source: Morgan Stanley Researc estimates

3. Why TSMC is otivated to support MediaTek and Google?

TSMC's CoWoS-L solution carries a structurally higher cost due to its larger reticle size, as we discussed in The Foundry Floorplan: TSMC preview update; CoWoS vs. EMIB competition (14 Apr 2026). We believe TSMC also wants to address growing competition from Intel's EMIB-T, which we estimate will reach 40-45k wafer equivalent capacity 2028, implying a 10-15% share of the 2.5D packaging market.

For MediaTek to adopt TSMC's CoWoS-L as a second source alongside EMIB-T, the RDL (redistribution layer) connection to the interposer requires tape-out of three additional photomask layers. owever, our checks suggest that Google is willing to absorb the incremental costs associated with dual sourcing, which should allow MediaTek to sustain its gross margin.

M Idea

Exhibit 4: Total 2.5D packaging capacity from 2026-2028 (excluding EMIB-M w ic is mainly for CPU production)

Total 2.5D Packaging Capacity (Average)

報告_MS_聯發科2454_20260927_002

Source: Morgan Stanley Researc estimates

Exhibit 5: TSMC's roadmap for interposer size

CoWoS Enables Al Compute Scaling

Source: Winway, TSMC

Intel EMIB-T can support 2.5 n units of our 2028 TPUv9 ship ent in 2028

Average EMIB-T capacity is around 5kwpm in 2026, which we expect to further scale to 1520kwpm in 2027 and 40-45kwpm in 2028. All of the capacity mentioned above is converted for 12-inch wafer equivalent, which we believe would be much easier to M Idea communicate with customers compared with TSMC CoWoS capacity.

Although some small projects are ongoing, we still see MediaTek/Google umufish consuming most of the capacities during 2027-28. We now expect Intel EMIB-T could produce close to 2.5mn units of umufish from late 2027-2028, by assuming 4-5 chips per wafer of EMIB-T, while TSMC CoWoS could support around 500k units.

We see current average EMIB-M capacity being 110kwpm, which would slightly decrease to 95kwpm in 2027 as Intel is converting some capacities toward EMIB-T.

Exhibit 6: We expect Intel's EMIB-T capacity to reac 20kwpm in 2027 and 45kwpm in 2028; EMIB-M capacity is currently at 110kwpm, w ic would be down to 95kwpm due to conversion Exhibit 7: Intel's EMIB can easily support larger c ips wit more reticles (>12x) if its supply c ain execution proceeds well

Intel EMIB Capacity (Average)

報告_MS_聯發科2454_20260927_004

Source: Morgan Stanley Researc estimates

報告_MS_聯發科2454_20260927_005

Source: Intel

M Idea

Earnings estimate revisions and quarterly financials

We raise 2028 earnings estimates by 11%, while 2026/27 numbers are largely unchanged: Our higher 2028 estimates mostly reflect stronger TPU shipment and subsystem build for a second CSP customer.

Exhibit 8: MediaTek: Earnings estimate revisions

(NT$ mn) Current New 2026e Previous Old 2026e Diff. % Current New 2027e Previous Old 2027e Diff. % Current New 2028e Previous Old 2028e Diff. %
Net sales 671,881 671,881 0% 1,095,554 1,095,554 0% 2,315,233 2,083,124 11%
Gross profit 305,311 305,312 0% 461,508 461,508 0% 882,302 801,064 10%
Operating profit 116,528 116,531 0% 262,019 262,019 0% 630,311 566,006 11%
Pretax income 135,851 135,662 0% 277,019 277,019 0% 645,311 581,006 11%
Reported net income 116,823 116,620 0% 233,811 233,811 0% 545,288 490,950 11%
Reported basic EPS 73.35 73.22 0% 146.97 146.97 0% 342.37 308.25 11%
Reported diluted EPS 73.27 73.14 0% 146.81 146.81 0% 341.99 307.91 11%
Margins
Gross margin 45.4% 45.4% 42.1% 42.1% 38.1% 38.5%
Operating margin 17.3% 17.3% 23.9% 23.9% 27.2% 27.2%
Pretax margin 20.2% 20.2% 25.3% 25.3% 27.9% 27.9%
Net margin 17.4% 17.4% 21.3% 21.3% 23.6% 23.6%

Source: Morgan Stanley Researc estimates

Exhibit 9: MediaTek: Quarterly financials

(NT$ mn) 1Q26 2Q26 3Q26e 4Q26e 1Q27e 2Q27e 3Q27e 4Q27e 2024 2025 2026e 2027e 2028e
Total revenues 149,151 152,183 154,613 215,935 221,504 242,352 292,895 338,804 530,586 595,966 671,881 1,095,554 2,315,233
Q/Q Change -0.7% 2.0% 1.6% 39.7% 2.6% 9.4% 20.9% 15.7%
Y/Y Change -2.7% 1.2% 8.8% 43.8% 48.5% 59.3% 89.4% 56.9% 22.4% 12.3% 12.7% 63.1% 111.3%
Cost of Sales 80,095 81,875 83,500 121,100 126,907 139,384 170,328 197,427 267,200 312,886 366,570 634,046 1,432,931
Percent of Revenues 53.7% 53.8% 54.0% 56.1% 57.3% 57.5% 58.2% 58.3% 50.4% 52.5% 54.6% 57.9% 61.9%
Gross Profit 69,055 70,308 71,113 94,835 94,596 102,968 122,566 141,378 263,386 283,080 305,311 461,508 882,302
Gross Margin 46.3% 46.2% 46.0% 43.9% 42.7% 42.5% 41.8% 41.7% 49.6% 47.5% 45.4% 42.1% 38.1%
Incremental Margin NM 41% 33% 39% -4% 40% 39% 41% 58% 30% 29% 37% 35%
Total Opex 46,165 47,440 46,723 48,456 47,988 48,809 50,572 52,120 160,974 179,610 188,783 199,489 251,991
Percent of Revenues 31.0% 31.2% 30.2% 22.4% 21.7% 20.1% 17.3% 15.4% 30.3% 30.1% 28.1% 18.2% 10.9%
R&D 38,345 39,361 39,411 39,511 39,550 39,750 39,950 40,150 131,993 148,306 156,627 159,400 178,210
Percent of Revenues 25.7% 25.9% 25.5% 18.3% 17.9% 16.4% 13.6% 11.9% 24.9% 24.9% 23.3% 14.5% 7.7%
General & Adm Exp. 2,805 3,397 3,447 3,547 2,900 3,000 3,300 3,500 11,891 10,856 13,195 12,700 15,900
Percent of Revenues 1.9% 2.2% 2.2% 1.6% 1.3% 1.2% 1.1% 1.0% 2.2% 1.8% 2.0% 1.2% 0.7%
Selling Expenses 5,015 4,682 3,865 5,398 5,538 6,059 7,322 8,470 17,090 20,448 18,961 27,389 57,881
Percent of Revenues 3.4% 3.1% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 3.2% 3.4% 2.8% 2.5% 2.5%
Operating Income 22,891 22,868 24,390 46,379 46,609 54,159 71,994 89,257 102,412 103,470 116,528 262,019 630,311
Operating Margin 15.3% 15.0% 15.8% 21.5% 21.0% 22.3% 24.6% 26.3% 19.3% 17.4% 17.3% 23.9% 27.2%
Total Non-operating Income (loss) 4,129 5,094 5,050 5,050 3,750 3,750 3,750 3,750 17,107 21,418 19,322 15,000 15,000
Profit Before Taxes 27,019 27,962 29,440 51,429 50,359 57,909 75,744 93,007 119,519 124,888 135,851 277,019 645,311
Percent of Revenues 18.1% 18.4% 19.0% 23.8% 22.7% 23.9% 25.9% 27.5% 22.5% 21.0% 20.2% 25.3% 27.9%
Change vs Year Ago -22% -16% -2% 89% 86% 107% 157% 81% 37.7% 4.5% 8.8% 103.9% 132.9%
Taxes 2,643 3,357 4,563 7,972 7,806 8,976 11,740 14,416 12,378 18,770 18,534 42,938 100,023
Tax Rate 9.8% 12.0% 15.5% 15.5% 15.5% 15.5% 15.5% 15.5% 10.4% 15.0% 13.6% 15.5% 15.5%
Minor interest 222 270 0 0 0 0 48,933 0 64,004 0 754 798 105,319 493 116,823 270 0
Total Net Income to Parent 24,154 24,335 24,877 43,458 42,553 19.2% 20.2% 21.9% 78,591 106,387 20.1% 17.7% 17.4% 233,811 545,288
Percent of Revenues 16.2% 16.0% 16.1% 20.1% 23.2% 21.3% 23.6%
Change vs Year Ago -17.6% -12.6% -1.4% 89.6% 76.2% 101.1% 157.3% 80.8% 38.2% -1.0% 10.9% 100.1% 133.2%
Reported Basic EPS (NT$, TW GAAP) 15.17 15.28 15.62 27.29 26.72 30.72 40.19 49.34 66.93 66.17 73.35 146.97 342.37
Reported Diluted EPS (NT$, TW GAAP) 15.15 15.26 15.60 27.26 26.69 30.69 40.14 49.29 66.81 66.07 73.27 146.81 341.99

Source: Company data, Morgan Stanley Researc estimates M Idea

Raise price target from NT$5 588 to NT$6 188

We continue to derive our price target (our base-case scenario value) from a residual income model. The price target change mostly reflects our earnings estimate changes. All of our key valuation assumptions remain unchanged: cost of equity at 9.2% (beta of 1.2, risk-free rate of 2%, and risk premium of 6%), intermediate growth rate of 12%, and terminal growth rate of 3.0%.

Our bull- and bear-case scenario values rise from NT$7,675 to NT$8,500 and NT$2,845 to NT$3,150, respectively.

Exhibit 10: MediaTek: Residual income model

(NT$ mn) 2026e 2027e 2028e 2029e 2030e 2031e 2032e 2033e 2034e 2035e 2036e 2037e
Total Equity 478,709 693,702 1,127,416 1,414,944 1,736,975 2,097,651 2,501,607 2,954,038 3,460,761 4,028,290 4,663,923 5,375,832
Net Profit 116,823 233,811 545,288 610,722 684,009 766,090 858,021 960,984 1,076,302 1,205,458 1,350,113 1,512,126
ROAE 26.3% 39.9% 59.9% 48.0% 43.4% 40.0% 37.3% 35.2% 33.6% 32.2% 31.1% 30.1%
Residual Income 70,031 146,894 351,603 437,931 483,949 534,232 589,677 651,142 719,510 795,717 880,781 975,822
Spread 17.1% 30.7% 50.7% 38.8% 34.2% 30.8% 28.1% 26.0% 24.4% 23.0% 21.9% 20.9%
Ending Equity Capital 478,709
PV of Forecast Period 3,230,987
PV of Continuing Value 6,156,971
Equity Value 9,866,666
No. of Shares 1,594
Projected Price (NT$) 6,188

Source: Company data, Morgan Stanley Researc estimates M Idea

Relative valuation

We view the P/E as relatively attractive - even after the share price rally - given strong AI demand. Although MediaTek faces smartphone headwinds in 2026, we believe it is time to look beyond 2026. We think this margin pressure is fully priced in, while TPU upside is not. We believe the stock should trade more than +1SD above its historical average, supported by strong TPU demand. Our price target of NT$6,188 implies 42x 2027 EPS, on our estimates.

Exhibit 11: MediaTek: One-year forward P/E trend

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 MediaTek One-year Forward P/E

Source: Company data, FactSet, Morgan Stanley Researc M Idea

Risk Reward - MediaTek (2454.TW) Risk Reward - MediaTek (2454.TW) Top Pick

AI ASIC demand likely to offset smartphone headwind; Top Pick

NT$6,188.00 PRICE TARGET

Base case, residual income model. Key assumptions: cost of equity 9.2%, intermediate growth rate 12.0%, terminal growth rate 3.0%.

NT$5,534.27

MS PT

Mean

Consensus Price Target Distribution

NT$1,751.00

NT$10,369.00

Source: Refinitiv, Morgan Stanley Research Morgan Stanley Estimates

RISK REWARD CHART AND OPTIONS IMPLIED PROBABILITIES (12M)

Key: Historical Stock Performance Current Stock Price Price Target

Source: Refinitiv, Morgan Stanley Research, Morgan Stanley Institutional Equities Division. The probabilities of our Bull, Base, and Bear case scenarios playing out were estimated with implied volatility data from the options market as of 24 Sep 2026. All figures are approximate risk-neutral probabilities of the stock reaching beyond the scenario price in either three-months ' or one-years ' time. View explanation of Options Probabilities methodology here

BULL CASE

BASE CASE

OVERWEIGHT THESIS

  • ▪We expect MediaTek's gross margin to decline in both 2026 and 2027 as a result of smartphone headwinds and TPU margin dilution, but strong demand from TPU should drive earnings growth.
  • ▪Overall AI ASIC demand looks very strong, especially from Google's TPU, which should benefit MediaTek in the coming years.
  • ▪The AI smartphone replacement cycle is the key wild card. AI smartphone replacement could be too mild to pass through additional costs in Chinese smartphones.
  • ▪Risk-reward is attractive at the current level given strong TPU demand. We believe the stock could re-rate to 42x 2027e P/E, more than double its 18x historical average since 2006.

Consensus Rating Distribution

Risk Reward Themes

New Data Era:

Positive

Technology Diffusion: Positive

View descriptions of Risk Rewards Themes here

BEAR CASE

58x 2027e EPS

MediaTek receives US licenses for shipments to all Chinese smartphone brands. Emerging market demand recovers to trend-line growth. MediaTek reaches 90% of an enlarged addressable market for 5G Android smartphones in 2027, including share gains in premium smartphone models. Blended ASP rises in 2027. Better business development in IoT, autos, enterprise networking chips, edge AI projects and AI ASIC business, especially on Google TPU demand.

42x 2027e EPS

MediaTek maintains around 35-40% overall share in the Chinese smartphone market, with a share of 30-40% in 5G SoC for 2025 (ex-Apple). Besides smartphones, AI ASIC should be the largest focus for the company now. We expect a >50% revenue CAGR during 2025-28. Non-smartphone business development stays on track, including IoT, autos, enterprise networking chips, edge AI projects and AI ASIC business.

21x 2027e EPS

Competitive pressures are worse than expected, with some market share loss, which hurts gross margin. Emerging market smartphone growth stalls. Chinese smartphone chipset vendors show a breakthrough in 5G technologies or foundry supply and start to take more market share in mid-range 5G smartphone SoCs. Slow new business development in ASIC, IoT and automotive, edge AI projects and AI ASIC business.

NT$3,150.00

NT$8,500.00

NT$6,188.00

M Idea

Risk Reward - MediaTek (2454.TW)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026eDec 2027eDec 2028e
Revenue from 5G Products (NT$, mn) 291,637 281,035 301,505 341,338
Revenue from Mid-low-end 4G Products (NT$, mn) 4,854 1,198 1,137 1,186
Revenue from Growing Products (NT$, mn) 195,335 310,767 715,665 1,891,823
Revenue from Mature Products (NT$, mn) 34,922 32,983 32,857 32,682

INVESTMENT DRIVERS

  • Market share in major smartphone brands
  • Overall demand from non-smartphone businesses, such as TVs and set-top boxes
  • Introduction of new products, such as SoC, smartphones, and tablets

GLOBAL REVENUE EXPOSURE

Source: Morgan Stanley Research Estimate View explanation of regional hierarchies here

MS ALPHA MODELS

2/5 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

  • Edge AI proliferates smartphone replacement cycle.
  • Smartphone demand rises in China and other EMs.
  • New products attract high demand, resulting in market share gains.
  • Google's TPU spurs demand.

RISKS TO DOWNSIDE

  • Smartphone demand deteriorates in China and other EMs.
  • Competition heats up, resulting in pricing competition.
  • New products attract low demand, causing market share loss.
  • Margin dilution is more severe.

OWNERSHIP POSITIONING

Inst. Owners, % Active

71.3%

Source: Refinitiv, Morgan Stanley Research

MS ESTIMATES VS. CONSENSUS

M Idea

MediaTek: Financial Summary

Income Statement

Cash Flow Statement

NT$mn (Years End Dec ) 2024 2025 2026e 2027e 2028e
Net sales 530,586 595,966 671,881 1,095,554 2,315,233
COGS (267,200) (312,886) (366,570) (634,046) (1,432,931)
Gross profit 263,386 283,080 305,311 461,508 882,302
Operating expenses (160,974) (179,610) (188,783) (199,489) (251,991)
Operating income 102,412 103,470 116,528 262,019 630,311
Non-operating income 17,107 21,418 19,322 15,000 15,000
Pre-tax income 119,519 124,888 135,851 277,019 645,311
Income tax (12,378) (18,770) (18,534) (42,938) (100,023)
Net income (excl. emp. bonus) 133,925 132,647 146,645 292,602 681,610
Employee Bonus Expense 26,785 26,529 29,329 58,520 136,322
Net income (incl. emp. bonus) 106,387 105,319 116,823 233,811 545,288
Adj.wtd.avg.shrs( m) 1,589 1,592 1,593 1,591 1,593
Reported EPS (NT$) 66.93 66.17 73.35 146.97 342.37
Diluted EPS (NT$) 66.81 66.07 73.27 146.81 341.99
EPS for Consensus (NT$) 66.81 66.07 73.27 146.81 341.99

Balance Sheet

NT$mn (Years End Dec ) 2024 2025 2026e 2027e 2028e
Cash flow from Operations 156,055 162,793 39,626 185,821 379,538
Net profits 106,385 105,319 116,823 233,811 545,288
Depreciation 20,936 22,974 23,808 24,641 25,474
Equity investment losses (income) (517) (785) 0 0 0
Other adjustments 29,251 35,284 (101,005) (72,631) (191,224)
Cash flow from Investing (35,928) (37,754) (74,260) (122,445) (343,102)
Capex (13,787) (15,059) (5,000) (5,000) (5,000)
Change of LT Investment (14,226) (9,851) 0 0 0
Change of ST Investment 283 (69) 0 0 0
Other adjustments (8,198) (12,775) (69,260) (117,445) (338,102)
Cash flow from financing (90,119) (87,675) (71,117) (43,459) (137,049)
Increase in L/T debt 0 60 50,000 50,000 50,000
Increase in S/T debt (1,260) 0 0 0 0
Cash Dividend Paid (87,551) (86,070) (121,117) (93,459) (187,049)
Dir& Emp Bonus Paid 0 0 0 0 0
Issuance of stock 0 0 0 0 0
Other adjustments (1,309) (1,665) 0 0 0
Exchange rate adjustment 0 0 0 0 0
Net change in cash 30,008 37,364 -105,751 19,918 -100,613

Financial Ratios

168,912 Margins (%)

NT$mn (Years End Dec ) 2024 2025 2026e 2027e 2028e
Cash 203,696 235,290 129,539 149,457 48,844
Mkt Securities 15,928 12,419 12,419 12,419 12,419
AR/NR 44,713 62,121 79,877 130,246 275,248
Inventory 58,414 67,235 93,266 161,319 364,577
Other 28,274 20,392 13,849 22,582 47,723
Current Assets 351,025 397,456 328,950 476,023 748,812
Long-term investments 169,970 168,912 168,912 168,912 168,912
Fixed assets 56,917 60,427 65,427 70,427 75,427
Other assets 119,955 116,990 186,250 303,694 641,796
Total Assets 697,868 743,785 749,539 1,019,056 1,634,947
S/T borrowings 940 940 940 940 940
AP/NP 40,777 48,710 60,911 105,356 238,103
Other ST liabilities 225,186 253,700 177,739 187,818 237,248
LT debt 2,681 6,795 6,795 6,795 6,795
Other LT liabilities 23,228 24,444 24,444 24,444 24,444
Total Liabilities 292,812 334,590 270,830 325,354 507,531
Common shares 16,017 16,039 16,039 16,039 16,039
Retained earning 331,543 354,139 470,962 704,773 1,250,061
Other shareholders' equity 57,495 39,017 (8,292) (27,110) (138,684)
Total Equity 405,055 409,195 478,709 693,702 1,127,416
Total Liab. & Shrhldr's Equity 697,868 743,785 749,539 1,019,056 1,634,947
2024 2025 2026e 2027e 2028e
Growth(%)
Turnover 22.4 12.3 12.7 63.1 111.3
Operating profits 42.6 1.0 12.6 124.9 140.6
Pretax profits 37.7 4.5 8.8 103.9 132.9
Net profits 38.8 -1.0 10.6 99.5 132.9
EPS 38.1 -1.1 10.9 100.4 132.9
Margins (%)
Gross Margin 49.6 47.5 45.4 42.1 38.1
Operating Margin 19.3 17.4 17.3 23.9 27.2
Pretax Margin 22.5 21.0 20.2 25.3 27.9
Net Profit 20.1 17.7 17.4 21.3 23.6
Return (%)
ROAA 16.0 14.6 15.6 26.4 41.1
ROAE 27.3 25.9 26.3 39.9 59.9
Gearing (%)
Net Debt/Equity (50.1) (57.3) (26.9) (21.4) (4.2)
Liabilities/Equity 72.3 81.8 56.6 46.9 45.0
Ratios (X)
Current ratio 1.3 1.3 1.4 1.6 1.6
Quick ratio 0.9 1.0 0.9 1.0 0.7
Others
AR/NR Turnover (days) 43 43 43 43 43
Inventory Turnover (days) 92 92 92 92 92
AP Turnover (days) 60 60 60 60 60
Cash Conversion (days) 75 75 75 75 75

e = Morgan Stanley Research Estimates

Source: Morgan Stanley Research, Company Data M Idea

  1. View explanation of Options Probabilities methodology -

Options_Probabilities_Exhibit_Link.pdf

  1. View descriptions of Risk Rewards Themes - RR_Themes_Exhibit_Link.pdf
  2. View explanation of regional hierarchies - GEG_Exhibit_Link.pdf

  3. View explanation of Theme/Exposure methodology -

ESG_Sustainable_Solutions_External_Link.pdf

  1. View explanation of ERS methodology - ESG_ ERS_External_Link.pdf

M Idea