PDF 原檔：報告_Citi_環球晶6488_20261103_original.pdf
圖片清單（已驗證 2026-11-04）
| 檔名 | size | 分類 | 親眼所見內容 |
|---|---|---|---|
報告_Citi_環球晶6488_20261103_002.png |
140KB | 真資料圖 | Figure 4「Globalwafers — Forward 1-yr P/E Band」與 Figure 5「Forward 1-yr P/B Band」並排：藍色粗線為 GWC 股價，分別疊 4.6x/13.7x/22.9x/32.1x/41.2x 本益比帶與 0.6x/1.8x/3.1x/4.4x 本淨比帶（P/B 圖另疊 ROE 粉紅線），橫軸 2014-10 至 2026-10 |
報告_Citi_環球晶6488_20261103_003.png |
170KB | 真資料圖 | Bull/Bear 情境圖：現價 NT$685（2026-11-03），Bull NT$1,000（+46%）／Base NT$920（+34%）／Bear NT$600（-12%）；Base 假設 2027/28E EPS 約 NT$26/42，Bull＝12"/8" 需求更強帶動 ASP 與毛利，Bear＝需求轉弱且同業擴產失控；背景為 2025-11 至 2026-11 股價線 |
報告_Citi_環球晶6488_20261103_004.png |
189KB | 真資料圖 | Citi 對 GWC 的評等與目標價歷史（Analyst: Jack Chen）：2024-03 起評等 1（Buy），目標價 650→620→490→500→400→470，最近一筆 2026-08-04 目標價 1,100（收盤 952）；下半為 Short-Term View／Catalyst Watch 歷史圖 |
報告_Citi_環球晶6488_20261103_001.png |
16.7KB | 裝飾·版頭小圖 | Price Performance 縮圖（<40KB，未逐張細驗） |
原始內容
Prepared for [訂閱者姓名已遮蔽] citi
03 Nov 2026 12:44:50 ET │ 14 pages
Globalwafers Co (6488.TWO)
3Q26 results miss on fire incident; gradual recovery
CITI'S TAKE
The fire incident in Italy saw more impact (around low-teens % sales mix) in 3Q26, resulting in sales/GM miss. As the production line rebuild will take some time and with less-than-expected benefits from pricing adjustments, 4Q26 now seemingly would not see meaningful improvement. Thus, we expect sluggish momentum in the near term. However, the company sees rising demand from customers in 2027 with potential upside to 1Q27 on new capacity ramp and pricing adjustments. We cut our 2026/27/28E earnings and TP to NT$920 (28x 2H27-1H28E EPS) from NT$1,100 (28x 2H27-1H28E EPS). Buy.
3Q26 results miss on fire incident - 3Q26 sales declined 2% QoQ due to the fire incident in its 8' plant in Italy. As per the mgmt, if there had not been a fire incident, 3Q26 sales would have advanced >12% QoQ, which implies the negative impact of low-teens % sales mix. Along with rising depreciation, 3Q26 GM went down 0.7ppt QoQ, missing Citi/consensus forecasts by 3.2ppt/1.4ppt. Less non-op gain was likely due to its mark-to-market investment. Overall, earnings came 38%/25% lower than Citi/consensus forecasts. As per the mgmt., 12' production lines (excluding new capacity ramped) are running at full levels while 8'/6' lines are running at close to full levels. Compound semi lines also are running at high levels.
4Q26 outlook: aftereffect of the fire incident - The mgmt. indicated it still takes time to rebuild its production lines in Italy with 4Q26 sales growth of less than 12% YoY. For pricing in 4Q26, the mgmt. sees limited upside given there are still legacy longterm agreements not having expired yet. Thus, we currently forecast 4% QoQ growth (i.e., 7% YoY) in 4Q26E sales and 4Q GM improvement of +1.8ppt QoQ. Despite weak momentum due to the fire incident, the mgmt. currently sees improving demand from customers and expect supply would be tighter in 2027 vs 2026. ASP also would see improvement after renewals of long-term agreements in 2027.
Focusing on enhancing UTR and debottlenecking - The mgmt. currently thinks capex peaked in 2026 and would now focus on fulfilling its capacity and secure more demand with debottlenecking first. Whether there would be any further major capacity expansion would hinge on customers' commitment, subsidies from government, pricing, etc. The company also announced a private placement of up to $500 million in convertible bonds, designating Micron as the subscriber.
Earnings/TP cut; Buy - We cut our 2026/27/28E earnings by 19%/20%/9% due to slower recovery. We cut our TP to NT$920 (28x 2H27-1H28E EPS) from NT$1,100.
Earnings Summary
| Year to 31 Dec | Net Profit (NT$M) | Diluted EPS (NT$) | EPS growth (%) | P/E (x) | P/B (x) | ROE (%) | Yield (%) |
|---|---|---|---|---|---|---|---|
| 2024A | 9,846 | 20.95 | -52.1 | 32.7 | 3.6 | 12.5 | 2.5 |
| 2025A | 7,312 | 15.28 | -27.1 | 44.8 | 3.5 | 7.9 | 1.6 |
| 2026E | 8,725 | 18.23 | 19.3 | 37.6 | 3.4 | 9.2 | 0.8 |
| 2027E | 12,359 | 25.83 | 41.7 | 26.5 | 3.1 | 12.2 | 1.3 |
| 2028E | 20,183 | 42.19 | 63.3 | 16.2 | 2.8 | 18.0 | 1.9 |
Source: Powered by dataCentral
See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations.
| Buy | |
|---|---|
| Price (03 Nov 26 15:00) | NT$685.00 |
| Target price | NT$920.00↓ |
| from NT$1,100.00 | |
| Expected share price return | 34.3% |
| Expected dividend yield | 1.3% |
| Expected total return | 35.6% |
| Market Cap | NT$361,758M |
| US$11,091M |
Price Performance (RIC: 6488.TWO, BB: 6488 TT)
Jack Chen AC
+886-2-8726-9091 jack1.chen@citi.com
Laura (Chia Yi) Chen +886-2-8726-9090 laura.cy.chen@citi.com
Nicholas Lai +886-2-8726-9093 nicholas.lai@citi.com Prepared for [訂閱者姓名已遮蔽] Prepared for [訂閱者姓名已遮蔽]
| 6488.TWO: Fiscal - Profit & Loss (NT$m) | year end 31-Dec - 2024 | 2025 | 2026E | 2027E | 2028E | Valuation ratios | Price: NT$685.00; TP: NT$920.00; Market Cap: NT$361,758m; Recomm: Buy - 2024 | Price: NT$685.00; TP: NT$920.00; Market Cap: NT$361,758m; Recomm: Buy - 2025 | Price: NT$685.00; TP: NT$920.00; Market Cap: NT$361,758m; Recomm: Buy - 2026E | Price: NT$685.00; TP: NT$920.00; Market Cap: NT$361,758m; Recomm: Buy - 2027E | Price: NT$685.00; TP: NT$920.00; Market Cap: NT$361,758m; Recomm: Buy - 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales revenue | 62,626 | 60,598 | 59,560 | 74,324 | 95,751 | PE (x) | 32.7 | 44.8 | 37.6 | 26.5 | 16.2 |
| Cost of sales | -42,823 | -45,974 | -47,156 | -53,615 | -63,398 | PB (x) | 3.6 | 3.5 | 3.4 | 3.1 | 2.8 |
| Gross profit | 19,804 | 14,624 | 12,404 | 20,709 | 32,353 | EV/EBITDA (x) | 17.1 | 22.4 | 23.3 | 13.4 | 9.3 |
| Gross Margin (%) | 31.6 | 24.1 | 20.8 | 27.9 | 33.8 | FCF yield (%) | -3.4 | -6.3 | 13.5 | 3.0 | 6.9 |
| EBITDA (Adj) | 21,924 | 17,322 | 16,466 | 26,923 | 37,839 | Dividend yield (%) | 2.5 | 1.6 | 0.8 | 1.3 | 1.9 |
| EBITDA Margin (Adj) (%) | 35.0 | 28.6 | 27.6 | 36.2 | 39.5 | Payout ratio (%) | 83 | 72 | 31 | 35 | 31 |
| Depreciation | -7,806 | -8,686 | -10,207 | -12,856 | -13,471 | ROE (%) | 12.5 | 7.9 | 9.2 | 12.2 | 18.0 |
| Amortisation | 0 | 0 | 0 | 0 | 0 | Cashflow (NT$m) | 2024 | 2025 | 2026E | 2027E | 2028E |
| EBIT (Adj) | 14,118 | 8,636 | 6,260 | 14,067 | 24,369 | EBITDA | 21,924 | 17,322 | 16,466 | 26,923 | 37,839 |
| EBIT Margin (Adj) (%) | 22.5 | 14.3 | 10.5 | 18.9 | 25.5 | Working capital | 26,002 | -39,812 | 35,514 | -3,316 | -3,988 |
| Net interest | 2,489 | 1,282 | 739 | 900 | 900 | Other | -4,279 | -1,325 | 2,468 | -1,708 | -4,186 |
| Associates | -4,662 | -77 | 2,889 | 416 | 0 | Operating cashflow | 43,646 | -23,814 | 54,449 | 21,898 | 29,666 |
| Non-Op/Except/Other Adj | 483 | -326 | 694 | 143 | 146 | Capex | -54,629 | 3,147 | -10,341 | -12,000 | -7,000 |
| Pre-tax profit | 12,429 | 9,516 | 10,582 | 15,526 | 25,415 | Net acq/disposals | -97 | -531 | -4,857 | -416 | 0 |
| Tax | -2,590 | -2,205 | -1,853 | -3,167 | -5,232 | Other | 1,718 | 1,073 | 976 | 0 | 0 |
| Extraord./Min.Int./Pref.div. | 7 | 0 | -4 | 0 | 0 | Investing cashflow | -53,008 | 3,690 | -14,222 | -12,416 | -7,000 |
| Reported net profit | 9,846 | 7,312 | 8,725 | 12,359 | 20,183 | Dividends paid | -8,748 | -5,259 | -3,681 | -4,362 | -6,179 |
| Net Margin (%) | 15.7 | 12.1 | 14.6 | 16.6 | 21.1 | Financing cashflow | 22,126 | 679 | -28,528 | -3,298 | -7,098 |
| Core NPAT | 9,846 | 7,312 | 8,725 | 12,359 | 20,183 | Net change in cash | 12,765 | -19,445 | 11,699 | 6,184 | 15,568 |
| Per share data | 2024 | 2025 | 2026E | 2027E | 2028E | Free cashflow to s/holders | -10,983 | -20,667 | 44,108 | 9,898 | 22,666 |
| Reported EPS ($) | 20.95 | 15.28 | 18.23 | 25.83 | 42.19 | ||||||
| Core EPS ($) | 20.95 | 15.28 | 18.23 | 25.83 | 42.19 | ||||||
| DPS ($) | 17.33 | 11.00 | 5.70 | 9.12 | 12.92 | ||||||
| CFPS ($) | 92.85 | -49.76 | 113.78 | 45.77 | 62.01 | ||||||
| FCFPS | -23.36 | -43.19 | 92.17 | 20.69 | 47.38 | ||||||
| ($) BVPS ($) | 190.40 | 195.14 | 202.98 | 219.71 | 249.00 | ||||||
| Wtd avg ord shares (m) | 470 | 479 | 479 | 478 | 478 | ||||||
| Wtd avg diluted shares (m) | 470 | 479 | 479 | 478 | 478 | ||||||
| Growth rates | 2024 | 2025 | 2026E | 2027E | 2028E | ||||||
| Sales revenue (%) | -11.4 | -3.2 | -1.7 | 24.8 | 28.8 | ||||||
| EBIT (Adj) (%) | -29.6 | -38.8 | -27.5 | 124.7 | 73.2 | ||||||
| Core NPAT (%) | -50.2 | -25.7 | 19.3 | 41.7 | 63.3 | ||||||
| Core EPS (%) | -52.1 | -27.1 | 19.3 | 41.7 | 63.3 | ||||||
| Balance Sheet (NT$m) | 2024 | 2025 | 2026E | 2027E | 2028E | ||||||
| Cash & cash equiv. | 38,929 | 19,484 | 31,183 | 37,367 | 52,935 | ||||||
| Accounts receivables | 10,265 | 10,113 | 10,739 | 14,267 | 18,613 | ||||||
| Inventory | 11,238 | 10,399 | 12,233 | 16,252 | 21,202 | ||||||
| 129,808 | 116,902 | 116,060 | 115,204 | 108,733 | |||||||
| Net fixed & other tangibles Goodwill & intangibles | 0 | 0 | 0 | 0 | 0 | ||||||
| Financial & other assets | 34,339 | 61,445 | 27,414 | 30,374 | 33,509 | ||||||
| Total assets | 224,581 | 218,343 | 197,629 | 213,465 | 234,992 | ||||||
| Accounts payable | 5,371 | 4,161 | 4,481 | 5,440 | 6,719 | ||||||
| Short-term debt | 27,738 | 31,010 | 25,967 | 26,485 | 26,038 | ||||||
| Long-term debt | 37,678 | 43,244 | 27,410 | 27,956 | 27,485 | ||||||
| Provisions & other liab | 62,766 | 46,633 | 42,722 | 48,538 | 55,702 | ||||||
| Total liabilities | 133,553 | 125,048 | 100,580 | 108,420 | 115,943 | ||||||
| Shareholders' equity Minority interests | 91,031 -3 | 93,299 | 97,049 0 | 105,045 0 | 119,048 0 | ||||||
| Total equity | 91,028 | -3 93,295 | 97,049 | 105,045 | 119,048 | ||||||
| 54,770 | 22,194 | 17,074 | |||||||||
| Net debt (Adj) | 26,486 | 588 | |||||||||
| Net debt to equity (Adj) (%) For definitions of the items in this table, | 29.1 please click here. | 58.7 | 22.9 | 16.3 | 0.5 |
| Figure 1. Globalwafers - 3Q26 Results - (NT$mn) | Figure 1. Globalwafers - 3Q26 Results - 3Q26 Actual | Figure 1. Globalwafers - 3Q26 Results - 2Q26 Actual | Figure 1. Globalwafers - 3Q26 Results - Q/Q | Figure 1. Globalwafers - 3Q26 Results - 3Q25 Actual | Figure 1. Globalwafers - 3Q26 Results - Y/Y | Figure 1. Globalwafers - 3Q26 Results - 3Q26 Citi | Figure 1. Globalwafers - 3Q26 Results - Diff. | Figure 1. Globalwafers - 3Q26 Results - 3Q26 Cons. | Figure 1. Globalwafers - 3Q26 Results - Diff. |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 14,871 | 15,214 | -2% | 14,493 | 3% | 16,183 | -8% | 16,127 | -8% |
| Gross profit | 2,970 | 3,140 | -5% | 2,662 | 12% | 3,748 | -21% | 3,455 | -14% |
| Gross margin | 20.0% | 20.6% | -0.7 ppt | 18.4% | +1.6 ppt | 23.2% | -3.2 ppt | 21.4% | -1.4 ppt |
| Op. profit | 1,454 | 1,423 | 2% | 1,230 | 18% | 2,292 | -37% | 1,966 | -26% |
| OP margin | 9.8% | 9.4% | +0.4 ppt | 8.5% | +1.3 ppt | 14.2% | -4.4 ppt | 12.2% | -2.4 ppt |
| Net income | 1,501 | 3,779 | -60% | 1,969 | -24% | 2,424 | -38% | 2,010 | -25% |
| EPS (NT$) | 3.14 | 7.90 | -60% | 4.12 | -24% | 5.06 | -38% | 4.23 | -26% |
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Citi Research Estimates, Company Reports, Bloomberg
Figure 2. Globalwafers - Earnings Revisions
| (NT$mn) | 4Q26E - New | 4Q26E - Old | 4Q26E - Chg. | 1Q27E - New | 1Q27E - Old | 1Q27E - Chg. | 2026E - New | 2026E - Old | 2026E - Chg. | 2027E - New | 2027E - Old | 2027E - Chg. | 2028E - New | 2028E - Old | 2028E - Chg. |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 15,490 | 16,470 | -6% | 16,349 | 16,608 | -2%59,560 | 61,852 | -4% | 74,324 | 74,261 | 0% | 95,751 | 94,238 | 2% | |
| Sequential growth | 4% | 2% | 6% | 1% | -2% | 2% | 25% | 20% | 29% | 27% | |||||
| Gross profit | 3,380 | 4,352 | -22% | 4,162 | 4,838 | -14% | 12,404 | 14,154 | -12% | 20,709 | 23,059 | -10% | 32,353 | 33,534 | -4% |
| Opex | 1,472 | 1,367 | 8% | 1,488 | 1,445 | 3% | 6,144 | 5,979 | 3% | 6,642 | 6,301 | 5% | 7,984 | 7,858 | 2% |
| Operating profit | 1,908 | 2,985 | -36% | 2,674 | 3,393 | -21% | 6,260 | 8,175 | -23% | 14,067 | 16,758 | -16% | 24,369 | 25,676 | -5% |
| Pre-tax profit | 1,960 | 3,307 | -41% | 2,626 | 3,595 | -27% | 10,582 | 13,307 | -20% | 15,526 | 19,326 | -20% | 25,415 | 27,832 | -9% |
| Net income | 1,548 | 2,612 | -41% | 2,075 | 2,840 | -27% | 8,725 | 10,711 | -19% | 12,359 | 15,381 | -20% | 20,183 | 22,105 | -9% |
| EPS (NT$) | 3.24 | 5.45 | -41% | 4.34 | 5.93 | -27% | 18.23 | 22.36 | -18% | 25.83 | 32.11 | -20% | 42.19 | 46.15 | -9% |
| Gross margin | 21.8% | 26.4% | -4.6 ppt | 25.5% | 29.1% | -3.7 ppt | 20.8% | 22.9% | -2.1 ppt | 27.9% | 31.1% | -3.2 ppt | 33.8% | 35.6% | -1.8 ppt |
| Opex ratio | 9.5% | 8.3% | +1.2 ppt | 9.1% | 8.7%+0.4 | ppt | 10.3% | 9.7%+0.6 | ppt | 8.9% | 8.5%+0.5 | ppt | 8.3% | 8.3% | -0.0 ppt |
| Operating margin | 12.3% | 18.1% | -5.8 ppt | 16.4% | 20.4% | -4.1 ppt | 10.5% | 13.2% | -2.7 ppt | 18.9% | 22.6% | -3.6 ppt | 25.5% | 27.2% | -1.8 ppt |
| Net margin | 10.0% | 15.9% | -5.9 ppt | 12.7% | 17.1% | -4.4 ppt | 14.6% | 17.3% | -2.7 ppt | 16.6% | 20.7% | -4.1 ppt | 21.1% | 23.5% | -2.4 ppt |
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Citi Research estimates
Figure 3. Globalwafers - Key Earnings Estimates
| (NT$ in Mn, year-end Dec) 1Q 2Q 3Q E 4Q E 1QE 2QE 3Q E 4Q E 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026E 2027E 2028E Revenue 13,985 15,214 14,871 15,490 16,349 17,876 19,520 20,579 15,310 18,427 46,213 59,064 58,094 55,359 61,131 70,287 70,652 62,626 60,598 59,560 74,324 95,751 COGS (11,071) (12,074) (11,900) (12,110) (12,187) (12,939) (13,917) (14,572) -11,237 -14,297 -34,405 -36,765 -35,248 -34,791 -37,845 -39,945 -44,211 -42,823 -45,974 -47,156 -53,615 -63,398 Gross Profit 2,914 3,140 2,970 3,380 4,162 4,937 5,603 6,007 4,073 4,130 11,808 22,299 22,847 20,568 23,286 30,342 26,441 19,804 14,624 12,404 20,709 32,353 Operating Expense (1,438) (1,718) (1,517) (1,472) (1,488) (1,627) (1,737) (1,790) -1,388 -2,752 -4,394 -4,721 -4,950 -5,281 -5,592 -5,359 -6,382 -5,685 -5,987 -6,144 -6,642 -7,984 SG&A expenses (967) (1,191) (892) (852) (899) (983) (1,015) (1,070) -838 -2,026 -3,595 -3,070 -3,239 -3,657 -3,523 -3,269 -4,018 -3,368 -3,770 -3,903 -3,968 -4,443 R&D expenses (471) (526) (625) (620) (589) (644) (722) (720) -551 -726 -799 -1,651 -1,711 -1,624 -2,070 -2,089 -2,364 -2,317 -2,218 -2,241 -2,675 -3,541 EBIT 1,475 1,423 1,454 1,908 2,674 3,310 3,865 4,217 2,685 1,378 7,414 17,578 17,897 15,287 17,693 24,983 20,059 14,118 8,636 6,260 14,067 24,369 Net Interest Income 310 29 200 200 250 250 200 200 16 -87 -306 356 652 170 -165 661 2,600 2,489 1,282 739 900 900 Net Other Income 562 3,133 36 (148) (298) 20 277 560 107 53 -233 319 5 1,158 -1,083 -5,538 3,838 -4,178 -402 3,583 559 146 Pre-Tax Profit 2,347 4,585 1,690 1,960 2,626 3,581 4,342 4,977 2,808 1,344 6,875 18,253 18,554 16,615 16,445 20,107 26,496 12,429 9,516 10,582 15,526 25,415 Tax 451 806 185 412 551 752 868 995 -764 -405 -1,596 -4,620 -4,918 -3,511 -4,575 -4,740 -6,727 -2,590 -2,205 -1,853 -3,167 -5,232 Net Profit 1,896 3,779 1,501 1,548 2,075 2,829 3,474 3,982 2,044 939 5,275 13,631 13,644 13,104 11,870 15,367 19,772 9,846 7,312 8,725 12,359 20,183 EPS (NT$) 4.0 7.9 3.1 3.2 4.3 5.9 7.3 8.3 5.86 2.54 12.68 31.11 31.26 30.03 26.29 34.21 43.73 20.95 15.28 18.23 25.83 42.19 Margins (%) Gross Margin 20.8 20.6 20.0 21.8 25.5 27.6 28.7 29.2 26.6 22.4 25.6 37.8 39.3 37.2 38.1 43.2 37.4 31.6 24.1 20.8 27.9 33.8 Operating Margin 10.5 9.4 9.8 12.3 16.4 18.5 19.8 20.5 17.5 7.5 16.0 29.8 30.8 27.6 28.9 35.5 28.4 22.5 14.3 10.5 18.9 25.5 Net Margin 13.6 24.8 10.1 10.0 12.7 15.8 17.8 19.3 13.4 5.1 11.4 23.1 23.5 23.7 19.4 21.9 28.0 15.7 12.1 14.6 16.6 21.1 Sequential Growth (%) Revenue (3.6) 8.8 (2.3) 4.2 5.5 9.3 9.2 5.4 -3.8 20.4 150.8 27.8 -1.6 -4.7 10.4 15.0 0.5 -11.4 -3.2 -1.7 24.8 28.8 Gross Profit (21.8) 7.8 (5.4) 13.8 23.1 18.6 13.5 7.2 9.2 1.4 185.9 88.8 2.5 -10.0 13.2 30.3 -12.9 -25.1 -26.2 -15.2 67.0 56.2 EBIT (38.0) (3.6) 2.2 31.3 40.1 23.8 16.8 9.1 14.9 -48.7 437.9 137.1 1.8 -14.6 15.7 41.2 -19.7 -29.6 -38.8 -27.5 124.7 73.2 Net Profit (14.0) 99.3 (60.3) 3.1 34.0 36.3 22.8 14.6 -2.4 -54.0 461.4 158.4 0.1 -4.0 -9.4 29.5 28.7 -50.2 -25.7 19.3 41.7 63.3 EPS (14.1) 99.6 (60.3) 3.1 34.0 36.3 22.8 14.6 -11.2 -56.6 399.3 145.3 0.5 -3.9 -12.5 30.1 27.8 -52.1 -27.1 19.3 41.7 63.3 2027 2026 |
|---|
© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.
Source: Company data, Citi Research estimates Prepared for [訂閱者姓名已遮蔽] Prepared for [訂閱者姓名已遮蔽]
Bull/Bear: Globalwafers Co (6488.TWO)
Prepared for [訂閱者姓名已遮蔽]
Globalwafers Co
Company description
GWC is the world's third-largest silicon wafer manufacturer. The company offers a one-stop shop for customers with its wide range of product portfolio and global presence. GWC has 16 manufacturing sites in 10 countries spread across Asia, Europe, and the Americas. Its product offering include annealed, polished, non-polished, diffused, FZ, EPI, SOI wafers ranging from 4' to 12' in diameter.
Investment strategy
We rate GWC as Buy as we expect its sales and earnings to recover in 2027. We believe silicon wafer sector has hit the bottom in 2Q26, evidenced by UTR improvements across 6' to 12' wafers. Although GM would likely face shortterm headwinds in 2H26 due to rising depreciation burden, a fire incident and higher energy costs, we believe favorable pricing trend, full UTR and the reception of US government's subsidies would help offset the negative impact, especially in 2027.
Valuation
Our target price of NT$920 is based on 28x 2H27-1H28E EPS, in line with +1stdv of 1-year fwd PE in the past 5 years. We use this PE multiple to reflect a gradually improving demand outlook for the overall semiconductor industry from 2H26 onward, especially a more meaningful recovery in 2027 and likely shortage. We believe the upcoming megatrend demand from AI, HPC, auto, and IoT and supply tightness could justify GWC's valuations during recovery backdrop from 1Q27 onwards.
Risks
Key downside risks that could cause the GWC shares to trade below our target price include: 1) weaker-than-expected pull-in demand; 2) undisciplined capacity expansion by other industry participants; 3) wafer price decline driven by macro factors; and 4) late reception of the subsidies from the US government.
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