報告_BofA_矽力-KY_20260313

PDF 原檔：報告_BofA_矽力-KY_20260313_original.pdf

原始內容

Silergy Corp.

Margin expansion ahead led by better mix & tighter supply; double-upgrade to Buy

Rating Change: BUY | PO: 370.00 TWD | Price: 272.00 TWD

NT$370 PO based on 25x P/E given stronger growth/GM

We double-upgrade Silergy to Buy (from Underperform) in view of its expected margin expansion from 2026, thanks to a more enhanced mix and tighter foundry supply in 8 ' wafers. We raise 2026/27E EPS by 10%/52%, after baking in assumptions of stronger revenue and GM (gross margin). Our new PO is NT$370 (earlier NT$210), based on 25x (earlier 20x) 2H26-1H27E P/E. We also see positives from 4Q25 earnings call (see p.5-6).

See reminiscence vs last upcycle in margins

As a major fabless in PMIC area, Silergy ' s GM went into an upcycle during 2019-21, thanks partially to price hike driven by supply tightness from foundry side. For now, we believe it is at the tipping point of GM expansion, considering a tighter supply/demand ahead in 8 ' foundry, which has triggered (or will likely trigger) peers to raise the product ASP. Accordingly, we expect the firm to deliver stronger revenue growth from 2026, and believe its GM will reach ~55% during 2027-28 (vs ~52% in 2025-26).

Flag further upside to margins given a more enhanced mix

By application, we note that auto and computing (including servers) are expected to register stronger growth vs other areas, with 45-50% and 55-60% revenue CAGR during 2025-27, respectively. Collectively, these applications are likely to generate 33%/37%/39% of total revenue in 2026/27/28 (vs ~26% in 2025). In our view, the firm ' s GM can also further rise given an increasing mix from auto/computing,

Resilience seen in downcycle; platform migration helps

Moreover, in our view, Silergy ' s margin profile was more resilient in the downcycle during 2022-24 (Exhibit 3) when compared with other power semi-related fabless, while we see positive from platform migration (to gen-4/5 based on mature 12 ' process nodes), expediting the firm ' s shipment delivery to customers.

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Refer to important disclosures on page 12 to 14. Analyst Certification on page 9. Price Objective Basis/Risk on page 9. 12946909

Timestamp: 12 March 2026 04:30PM EDT

13 March 2026

Equity

Key Changes

Mike Yang >> Research Analyst Merrill Lynch (Taiwan) +886 2 2376 3729 mike.c.yang@bofa.com

Haas Liu >> Research Analyst Merrill Lynch (Taiwan) +886 2 2376 3727

haas.liu@bofa.com

Cathy Hsu >>

Research Analyst Merrill Lynch (Taiwan) +886 2 2376 3726 cathy.hsu3@bofa.com

Stock Data

PMIC -power management integrated circuit

iQ profile SM Silergy Corp.

Key Metrics

• For full definitions of iQ method SM measures, see page 11.

Company Sector

Semiconductors

Company Description

Silergy Corp. was founded in 2008 as a fabless design house mainly engaged in power management IC (PMIC). The company conducts business mainly in China with c.50% revenue exposures, and has footprints in the US, Taiwan, South Korea, Japan and India. By end-application, its business can be split into five categories, including consumer, industrial, computing, communication, and automotive.

Investment Rationale

We have an Buy rating on Silergy, in view of the benefits from price hike which triggers the margin expansion, as well as a better cyclicality across different vernicles including industrial and communication. Longer-term, we also expect the company to benefit from stronger traction to the auto and datacenter-related businesses.

Stock Data

Price to Book Value

2.7x

Margin expansion ahead led by better mix & tighter supply; double-upgrade to Buy

GM/revenue upside looks reminiscent vs last upcycle

Silergy ' s gross margin (GM) went into an uptrend during 2019-21 (and largely sustained in 2022), thanks to price hike driven by supply tightness from foundry side. As shown in Exhibit 1 and 2, there was a positive correlation between Silergy ' s GM vs Vanguard ' s capacity utilization rate and UMC ' s revenue in 8 ' process (partially used by Silergy for production).

Currently, we believe it is at the tipping point of GM expansion, considering a tighter supply/demand ahead in 8 ' foundry with potential wafer price recovery into 2H26. In our view Silergy ' s GM will also see a boost, as it prioritizes capacity support for high-end applications (auto, industrial, datacenter/compute), and enjoys a stronger pricing power in low/mid-end verticals (consumer, communication, etc.), given the supply tightness.

According to some of the peers ' announcements in power semis industry (e.g. Halo Micro), product ASP will be raised to reflect foundry price hike (partly due to tighter supply mentioned above). Further, we also note that (see report) Infineon is expected to raise the price on selective products given tight supply and higher raw material costs. At the same time, some of the peers (e.g. uPI) also mentioned they will follow the pricing trend of overall industry.

In our view, the pricing environment becomes more benign to Silergy, and we expect its revenue growth to turn stronger from 2026, thanks to price hike. We see 2027-28 GM at ~55%, vs ~52% in 2025-26.

Exhibit 1: Silergy's GM vs Vanguard's utilization rate

Source:

BofA Global Research estimates, company data

BofA GLOBAL RESEARCH

Exhibit 2: Silergy's GM vs Vanguard's/UMC's revenue in 8-inch process We see a positive correlation between Silergy's GM and Vanguard's/UMC's

revenue in 8' (110nm and above)

GM expansion during upcycle & resilience in downcycle

When compared with the GM trends of other power semis fabless, we note that the companies enjoyed the benefits from supply-driven price hike and margin expansion during the last upcycle (Exhibit 3). Also, in our view, Silergy ' s GM seemed to be more resilient in the downcycle during 2022-24.

Looking ahead, we also see a boost from the continuous penetration increase and migration to gen-4 and gen-5 manufacturing platforms (based on a more advanced process in mature 12-inch wafers), which can also expedite the company ' s shipment to customers given the alleviated impact from tighter supply in 8-inch.

Exhibit 3: Gross margin trends by power semi-related names in Greater China

Power semi-related names generally enjoyed a higher margin during pandemic cycle, while GM by companies' with stronger traction to mid/high-end application seems to be more resilient

Source: BofA Global Research estimates, company data

BofA GLOBAL RESEARCH

Auto/server businesses with stronger growth

By application, we note that auto and computing (in which server-related products belong to) businesses are expected to register stronger growth vs other areas, with 4550% and 55-60% revenue CAGR during 2025-27, respectively.

An expanded SAM (serviceable addressable market) via more new product offerings in our view, has been (and will continue to be) the reason for Silergy to outgrow its autorelated revenue vs. the end market. To elaborate, the SAM (per vehicle) was ~$150 in 2025, and the number could reach $200-250 in 2026 along with a more complete product portfolio including BMS (battery management), MCU (microcontroller), analog chips (signal chain) etc.

Similarly on datacenter side, we see the near-term demand boost from optical module and memory-related applications including SSD (solid state drive), while the company will also try to outgrow the end-market continuously via expanding its offerings into high current/voltage applications (Vcore, DrMOS) in longer-term.

Accordingly, we expect auto and computing to account for 18%/19%/20% and 15%/18%/19% of total revenue in 2026/27/28, respectively (vs 14% and 12% in 2025). We further point out that the GM expansion in the upcoming years can be partially attributed to a higher mix from these applications.

In terms of businesses outside of auto/computing, we see positive from a more contained impact from tariff, as mainland-based customers (~60% of revenue) resumed with a stronger pull-in from late-2H25.

Exhibit 4: Silergy's revenue YoY and mix in auto and computing businesses

Auto and computing are the applications with stronger revenue growth into 2026-28

Source: BofA Global Research estimates, company data

Exhibit 5: Gross margin by application We expect a stronger GM in different applications across the board

Source: BofA Global Research estimates, company data

BofA GLOBAL RESEARCH

Exhibit 6: Revenue mix by application

We expect continuously rising contribution from auto and computing segments into 2026-28

Source:

BofA Global Research estimates, company data

BofA GLOBAL RESEARCH

Positives learnt from 4Q25 earnings call

In near-term, Silergy expects the revenue YoY growth in 1Q25 to be mainly fueled by auto and datacenter applications, which will also continuously pave the way for growth in 2026. When asked of the cadence/magnitude of growth, Chairman states higher confidence level to record 20-30% revenue YoY in 2H26.

On supply chain management, the tightness from 8-inch supply (especially the ones from China foundries) is underscored, which also triggers earlier order placement and some

rush orders from the customers. For instance, some of the auto-related demand is now expected to pull-in from 2Q26 (vs end-2026 previously).

Aside from a strengthening demand in near-term, multiple benefits to Silergy are flagged and these include 1) the edge by Silergy in terms of supply chain management amidst the foundry supply tightness, given its bigger scale vs other power IC (integrated circuit) fabless; and 2) potentially accelerated migration by customers to gen-4 platform (with a better cost structure based on 12-in wafers).

To elaborate, the full-adoption of gen-4 (vs gen-3) manufacturing platform can lift the GM by 5ppts, and the company now targets 20+% adoption of gen-4 by end-2026 (vs 15-20%). On applications with stronger growth, the firm mentions to increase its revenue mix from auto to close to 20% in 2026, while it flags doubling demand of power-related chips by every three years in the datacenter.

Discussion on valuation and earnings change

We raise 2026/27E EPS by 10%/52% after baking in assumptions of stronger revenue and GM, while our estimates remain 0-1% lower vs consensus (for 2026E) as we factor in higher opex assumptions vs the Street numbers. To elaborate, we believe such assumptions are valid, considering the company ' s stronger resolution to 1) invest in R&D for future growth; and 2) expand the sales channel outside of China.

As for the 4Q25 result, operating income was behind BofAe/consensus, due mainly to a higher-than-expected operating expense. Yet on a positive note, the firm ' s GM improved by 90bps QoQ in 4Q25, thanks mainly to a higher mix from margin-accretive applications including auto and industrial.

Our PO of NT$370 is based on 25x (earlier 20x) 2H26-1H27E P/E, considering a stronger growth profile in revenue and earnings. We continue to use P/E as the valuation approach, as we expect the company to stay fairly profitable in our forecast period, and we expect the stock to re-rate along with a continuous recovery in margin profile.

When compared with the peers in fabless (chip-design) industry, Silergy trades at a lower 2027E P/E even though it is expected to record stronger EPS growth during 202527, and this makes us to expect further valuation upside vs the current trading multiples. Lower dividend yield and ROE (vs peers ' average) could be attributed to a reduced payout ratio vs peers.

Exhibit 7: 4Q25 result review

4Q25 operating income was 18%/12% behind BofAe/consensus owing mainly to a higher-than-expected opex

Source: BofA Global Research estimates, company data, Bloomberg

BofA GLOBAL RESEARCH

Exhibit 8: Earnings estimate change

We raise 2027E EPS by 52% mainly to reflect assumption of stronger revenue growth, gross margin, and operating leverage

Source: BofA Global Research estimates

Exhibit 9: BofAe vs consensus

We are 4-5% ahead of consensus for 2027E revenue

Source: BofA Global Research estimates, Bloomberg

Exhibit 10: 12-month forward P/E

The stock trades at ~23x forward P/E

Source: BofA Global Research estimates, company data

BofA GLOBAL RESEARCH

BofA GLOBAL RESEARCH

BofA GLOBAL RESEARCH

Exhibit 11: 12-month forward P/E with standard deviation

The current multiple (23x) is at low/mid-end of the historical trading range

Source: BofA Global Research estimates, company data

BofA GLOBAL RESEARCH

Exhibit 12: Valuation comparisons

Silergy trades at a lower 2027E P/E but it is expected to generate much stronger earnings growth into 2027

Source: BofA Global Research estimates, company data

Exhibit 13: Income statement

We expect the company's gross margin to expand to ~55% in 2027-28 vs ~52% in 2025-26

Source: BofA Global Research estimates, company data

BofA GLOBAL RESEARCH

BofA GLOBAL RESEARCH

Price objective basis & risk

Silergy Corp. (SLEGF)

We base our PO of NT$370 on 25x 2H26-1H27E P/E E (vs 45% EPS CAGR during 202628, implying 0.5-0.6x PEG). The target multiple is toward the low-to-mid-end of the company's historical trading range (10x-80x), and in our view is supported by a recovering operating margin of 20% and ROE of 14% in 2026-27E.

Upside risks to our PO are:

• 1) Better-than-expected end-market demand, driven by stronger-than-expected recovery in macro activities
• 2) Smaller-than-expected pricing pressure with less competition from global analog leaders and Chinese domestic peers
• 3) Faster-than-expected market share gain in power management under the semiconductor localization theme in China, especially for Communication and Industrial business.

Downside risks to our PO are:

• 1) Stagnant market share especially in China semiconductor universe, given fiercer-thanexpected competition from Chinese domestic power management peers
• 2) Weaker-than-expected end demand to dampen the firm's revenue growth, especially given its roughly 40% exposure to consumer market
• 3) Lack of bundle solution such as RF and signal chain to penetrate further into mobile and communication products.