JCET(SH:600584) 美股IPO·2025-10-29 10:19Core Viewpoint - Strong demand for AI semiconductors is significantly squeezing packaging and testing capacity, leading to increased bargaining power for backend manufacturers. Advanced packaging prices are expected to rise by 5-10% by 2026, marking the first price upcycle since the COVID-19 chip shortage, with leading Taiwanese firms ASE and KYEC at the forefront of this price increase [1][3]. Group 1: Factors Influencing Price Increase - The price increase in advanced packaging is driven by three main factors: 1. Strong AI demand is causing TSMC's CoWoS capacity to overflow, rapidly filling ASE's CoWoS capacity and KYEC's testing capacity [3]. 2. Capacity constraints are forcing ASE and KYEC to reject lower-margin products and shift capacity from wire-bonding to higher-margin flip chip packaging for AI semiconductors [3][7]. 3. Material cost inflation, particularly for gold, copper, and BT substrates, is contributing to the overall cost increase [4]. Group 2: Capacity Tightening and Market Outlook - Capacity tightening is identified as the core driver of the price increase, with TSMC's CoWoS capacity being in high demand, leading to significant orders flowing to ASE and other manufacturers [7]. - ASE's capacity utilization rate is reported to have reached 90% by Q3 2025, indicating a shortage that strengthens their position for price negotiations in 2026 [7]. - To meet AI-related demand, ASE is reallocating some wire-bonding capacity to more profitable flip chip packaging, reflecting a positive outlook for the company [7]. - Morgan Stanley has raised earnings expectations and target prices for ASE and KYEC, setting their target prices at NT$228 and NT$218 respectively, while maintaining an "overweight" rating [7]. Group 3: Competitive Landscape - Despite the optimistic outlook for ASE and KYEC, the report highlights that this positive sentiment is not universally applicable. JCET faces intense competition from domestic Chinese peers and lower capacity utilization, leading Morgan Stanley to maintain a "reduce" rating for the company [10].