Communications equipment was about $500 million, up about 20% year on year and was 3% of revenue. In summary, industrial, automotive, and data center combined made up about 75% of Texas Instruments' revenue in 2025, up from about 43% in 2013. We see good opportunities in all of our markets, but we place additional strategic emphasis on industrial, automotive, and data center. Our customers across all regions are increasingly turning to analog and embedded technology to make their end products more reliable, ...

Industrial: up high teens year-over-year and down mid-single digits sequentially, with recovery continuing broadly across sectors.Texas Instruments said it has reorganized its end-market reporting to include a new “data center” category, reflecting what it sees as expanding opportunities for its analog and embedded products. The company’s end markets are now industrial, automotive, data center, personal electronics, and communications equipment.By segment, Ilan said analog revenue grew 14% year-over-year, w ...

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $4.4 billion, a decrease of 7% sequentially but an increase of 10% year-over-year [4] - Gross profit was $2.5 billion, representing 56% of revenue, with a sequential decrease of 150 basis points [9] - Operating profit was $1.5 billion, or 33% of revenue, up 7% from the previous year [9] - Net income for the quarter was $1.2 billion, translating to $1.27 per share, which included a $0.06 reduction due to non-cash impairment of goodwill [9] Business Line Data and Key Metrics Changes - Analog revenue grew 14% year-over-year, while Embedded Processing grew 8% [4] - The Other segment declined compared to the previous year [4] - Industrial market revenue was $5.8 billion, up 12% year-over-year, accounting for 33% of total revenue [6] - Automotive revenue was also $5.8 billion, up 6% year-over-year, representing 33% of revenue [7] - Data center revenue reached $1.5 billion, up 64% year-over-year, making up 9% of total revenue [7] - Personal electronics revenue was $3.7 billion, up 7% year-over-year, accounting for 21% of revenue [7] - Communications equipment revenue was approximately $500 million, up about 20% year-over-year, representing 3% of total revenue [7] Market Data and Key Metrics Changes - The industrial market saw high teens growth year-over-year but was down mid-single digits sequentially [5] - The automotive market increased upper single digits year-over-year but was down low single digits sequentially [6] - Data center revenue grew around 70% year-over-year and mid-single digits sequentially [6] - Personal electronics declined upper teens year-over-year and mid-teens sequentially [6] - Communications equipment declined low single digits year-over-year and mid-teens sequentially [6] Company Strategy and Development Direction - The company reorganized its end markets to include data center, reflecting growth opportunities in analog and embedded products [4] - Strategic emphasis is placed on industrial, automotive, and data center markets, which now account for about 75% of total revenue [7] - The company aims to maximize long-term free cash flow per share growth, which is seen as the primary driver of long-term value [11] Management's Comments on Operating Environment and Future Outlook - Management noted a continuing recovery in the semiconductor market and expressed confidence in meeting customer demand with existing inventory and capacity [4] - The outlook for Q1 2026 anticipates revenue in the range of $4.32-$4.68 billion and earnings per share between $1.22-$1.48 [12] - Management highlighted the importance of disciplined capital allocation and investment in competitive advantages [12] Other Important Information - Cash flow from operations was $2.3 billion in Q4, with capital expenditures of $925 million [10] - The company returned $6.5 billion to shareholders over the past 12 months, including a 4% increase in dividends [10] - The company has a strong balance sheet with $4.9 billion in cash and short-term investments [10] Q&A Session Summary Question: What is driving the above-seasonal Q1 guidance? - Management indicated that the guidance is based on stronger bookings and improving orders, particularly in the industrial and data center markets, rather than pricing [15][16][41] Question: How are inventory levels expected to change? - Management expressed satisfaction with current inventory levels, indicating they are well-positioned to meet customer demand and support revenue growth [23][24] Question: What is the outlook for the automotive market? - The automotive market is expected to continue its secular growth, with management noting a slight decline in Q4 but overall strength in the second half of the year [56][60] Question: How is the data center business expected to grow? - Management expects continued growth in the data center segment, driven by ongoing CapEx investments and a strong demand for analog and embedded parts [72][75] Question: What are the expectations regarding pricing? - Management clarified that they do not anticipate significant pricing changes in Q1, with expectations of low single-digit declines in pricing for 2026 [62][63]

Financial Data and Key Metrics Changes - Q4 revenue was $4.4 billion, a decrease of 7% sequentially but an increase of 10% year-over-year [4] - Gross profit was $2.5 billion, representing 56% of revenue, with a sequential decrease of 150 basis points [9] - Operating profit was $1.5 billion, or 33% of revenue, up 7% from the previous year [9] - Net income for Q4 was $1.2 billion, translating to $1.27 per share, which included a $0.06 reduction due to non-cash impairment and tax-related items [9] Business Line Data and Key Metrics Changes - Analog revenue grew 14% year-over-year, while Embedded Processing grew 8% [4] - The Other segment declined compared to the previous year [4] - Industrial market revenue was $5.8 billion, up 12% year-over-year, accounting for 33% of total revenue [7] - Automotive revenue was also $5.8 billion, up 6% year-over-year, representing another 33% of revenue [7] - Data center revenue reached $1.5 billion, up 64% year-over-year, making up 9% of total revenue [7] - Personal electronics revenue was $3.7 billion, up 7% year-over-year, accounting for 21% of revenue [7] - Communications equipment revenue was approximately $500 million, up about 20% year-over-year, representing 3% of total revenue [7] Market Data and Key Metrics Changes - The industrial market saw high teens growth year-over-year but was down mid-single digits sequentially [5] - The automotive market increased upper single digits year-over-year but was down low single digits sequentially [6] - Data center market grew around 70% year-over-year and mid-single digits sequentially [6] - Personal electronics declined upper teens year-over-year and mid-teens sequentially [6] - Communications equipment declined low single digits year-over-year and mid-teens sequentially [6] Company Strategy and Development Direction - The company reorganized its end markets to include data center, reflecting growth opportunities in analog and embedded products [4] - Strategic emphasis is placed on industrial, automotive, and data center markets, which now account for about 75% of total revenue, up from 43% in 2013 [7] - The company aims to maximize long-term free cash flow per share growth, which is seen as the primary driver of long-term value [12] Management's Comments on Operating Environment and Future Outlook - Management noted a continuing recovery in the semiconductor market and expressed confidence in meeting customer demand with existing inventory and capacity [4] - The outlook for Q1 2026 revenue is expected to be in the range of $4.32 billion to $4.68 billion, with earnings per share projected between $1.22 and $1.48 [13] - Management highlighted the importance of disciplined capital allocation and investment in competitive advantages to sustain growth [13] Other Important Information - Cash flow from operations for Q4 was $2.3 billion, with capital expenditures of $925 million [10] - The company returned $6.5 billion to shareholders over the past 12 months, including a 4% increase in dividends per share [10] - Inventory at the end of the quarter was $4.8 billion, down $25 million from the prior quarter [11] Q&A Session Summary Question: What is driving the above-seasonal Q1 guidance? - Management indicated that the guidance is based on stronger bookings and recovery in the industrial and data center markets, not pricing [16][17][19] Question: How are inventory levels expected to change? - Management expressed satisfaction with current inventory levels, which are seen as an asset to meet customer demand [25][26] Question: What are the prospects for personal electronics and communications markets? - Management noted that while personal electronics grew for the year, Q4 was weaker than expected, with varying performance across sectors [27][28] Question: What is the status of the automotive market? - Management indicated that the automotive market is experiencing secular growth, with expectations for continued strength despite a slight decline in Q4 [60][62] Question: Can you provide details on the data center business growth? - Management highlighted that data center growth is expected to continue, driven by ongoing CapEx investments and a strong position in analog and embedded parts [78][80]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $4.4 billion, a decrease of 7% sequentially but an increase of 10% year-over-year [3] - Gross profit was $2.5 billion, representing a gross profit margin of 56%, which decreased by 150 basis points sequentially [8] - Operating profit was $1.5 billion, or 33% of revenue, up 7% from the previous year [8] - Net income for the quarter was $1.2 billion, translating to $1.27 per share, which included a $0.06 reduction due to non-cash impairment of goodwill [8] - Cash flow from operations was $2.3 billion, with capital expenditures of $925 million [9] - Free cash flow for 2025 was $2.9 billion, or 17% of revenue, representing a 96% increase from 2024 [10] Business Line Data and Key Metrics Changes - Analog revenue grew 14% year-over-year, while Embedded Processing grew 8% [3] - The Other segment declined from the year-ago quarter [3] - Industrial market revenue was $5.8 billion, up 12% year-over-year, accounting for 33% of total revenue [5] - Automotive revenue was also $5.8 billion, up 6% year-over-year, making up 33% of revenue [5] - Data center revenue reached $1.5 billion, up 64% year-over-year, representing 9% of total revenue [5] - Personal electronics revenue was $3.7 billion, up 7% year-over-year, accounting for 21% of revenue [5] - Communications equipment revenue was approximately $500 million, up about 20% year-over-year, making up 3% of revenue [5] Market Data and Key Metrics Changes - The industrial market saw high teens growth year-over-year but was down mid-single digits sequentially [4] - The automotive market increased upper single digits year-over-year but was down low single digits sequentially [4] - Data center market grew around 70% year-over-year and mid-single digits sequentially [4] - Personal electronics declined upper teens year-over-year and mid-teens sequentially [4] - Communications equipment declined low single digits year-over-year and mid-teens sequentially [4] Company Strategy and Development Direction - The company reorganized its end markets to include data center, reflecting growth opportunities in analog and embedded products [3] - Strategic emphasis is placed on industrial, automotive, and data center markets, which combined accounted for about 75% of revenue in 2025 [5] - The company aims to maximize long-term free cash flow per share growth, which is seen as the primary driver of long-term value [10] Management's Comments on Operating Environment and Future Outlook - Management noted a continuing recovery in the semiconductor market and expressed confidence in meeting customer demand with existing inventory and capacity [3] - The company expects Q1 2026 revenue in the range of $4.32-$4.68 billion and earnings per share between $1.22-$1.48 [11] - Management highlighted the importance of disciplined capital allocation and investment in competitive advantages to sustain growth [10] Other Important Information - The company paid $1.3 billion in dividends and repurchased $403 million of its stock in the quarter [9] - The balance sheet remained strong with $4.9 billion in cash and short-term investments at the end of Q4 [9] - The company has returned $6.5 billion to shareholders in the past 12 months [9] Q&A Session Summary Question: What is driving the above-seasonal Q1 guidance? - Management indicated that the guidance is based on stronger bookings and recovery in industrial and data center markets, not pricing [14][15] Question: What are the implications for gross margin in Q1? - Management noted that gross margin was better than expected in Q4 due to improved revenue and operating expenses, with expectations for reasonable gross margin in Q1 [17][18] Question: How are inventory levels expected to change? - Management expressed satisfaction with current inventory levels, indicating they are well-positioned to meet customer demand [21][23] Question: What is the outlook for the automotive market? - Management noted that while automotive was slightly down in Q4, secular growth continues, and they expect it to remain strong in the long term [55][58] Question: How is the data center business expected to grow? - Management highlighted that growth in the data center market is expected to continue as CapEx investments remain strong, with a focus on both power and signal chain products [70][72]

Financial Data and Key Metrics Changes - Revenue for the third quarter was $4.7 billion, representing a 7% sequential increase and a 14% year-over-year increase [4] - Gross profit was $2.7 billion, or 57% of revenue, with a sequential decrease of 50 basis points in gross profit margin [7] - Operating profit was $1.7 billion, or 35% of revenue, up 7% from the year-ago quarter [7] - Net income for the quarter was $1.4 billion, translating to $1.48 per share, which included a $0.10 reduction due to restructuring charges [7] - Cash flow from operations was $2.2 billion for the quarter and $6.9 billion on a trailing 12-month basis [8] - Free cash flow on a trailing 12-month basis was $2.4 billion, including $637 million from CHIPS Act incentives [8] Business Line Data and Key Metrics Changes - Analog revenue grew 16% year-over-year, while Embedded Processing grew 9% [4] - The industrial market increased about 25% year-over-year and low single digits sequentially [5] - The automotive market increased upper single digits year-over-year and around 10% sequentially [5] - Personal electronics grew low single digits year-over-year and upper single digits sequentially [5] - Enterprise systems grew about 35% year-over-year and about 20% sequentially [5] - Communications equipment grew about 45% year-over-year and was up about 10% sequentially [5] Market Data and Key Metrics Changes - Customer inventories remain at low levels, with inventory depletion appearing to be behind the company [4] - The overall semiconductor market recovery is continuing, albeit at a slower pace than prior upturns due to macroeconomic dynamics [4] Company Strategy and Development Direction - The company plans to focus on long-term value creation through disciplined capital allocation and strengthening competitive advantages [10] - The company is winding down its 150mm fabs, with a gradual reduction in costs expected through the first half of 2026 [19] - The company aims to continue investing in high-growth areas such as data centers, industrial, and automotive markets [48] Management's Comments on Operating Environment and Future Outlook - Management noted a moderate recovery in the semiconductor market, with hesitancy among customers regarding new investments due to uncertainty in regulations [63] - The company expects revenue for the fourth quarter to be in the range of $4.22 billion to $4.58 billion, with EPS guidance of $1.13 to $1.39 [9] - Management expressed confidence in their inventory position and customer service levels, indicating readiness for various market scenarios [30] Other Important Information - The company returned $6.6 billion to shareholders over the past 12 months, including $1.2 billion in dividends and $119 million in stock repurchases [8] - The balance sheet remains strong with $5.2 billion in cash and short-term investments [9] Q&A Session Summary Question: Can you talk about the linearity of bookings through the quarter? - Management indicated that the quarter came in as expected, contrasting with the previous quarter's volatility [12][13] Question: What is the path to improve cash margins given the current inventory levels? - Management expressed satisfaction with the current inventory position and indicated adjustments in loadings for the fourth quarter to maintain inventory levels [15][16] Question: Can you elaborate on the restructuring and its impact on expenses? - Management explained that the restructuring is related to winding down 150mm fabs and ongoing efficiency improvements, with benefits expected over time [19][21] Question: How are pricing trends and lead times looking? - Management noted no unusual pricing trends, expecting a low single-digit price reduction for the year, and lead times remain competitive [28][30] Question: What is the outlook for the data center market? - Management highlighted strong growth in the data center market, which is expected to continue, with significant investments being made [64][75]

Financial Data and Key Metrics Changes - Revenue for the third quarter was $4.7 billion, representing a 7% sequential increase and a 14% year-over-year increase [4] - Gross profit was $2.7 billion, or 57% of revenue, with a sequential decrease of 50 basis points in gross profit margin [7] - Operating profit was $1.7 billion, or 35% of revenue, up 7% from the year-ago quarter [7] - Net income was $1.4 billion, translating to $1.48 per share, which included a $0.10 reduction due to restructuring charges [7] - Cash flow from operations was $2.2 billion for the quarter and $6.9 billion on a trailing 12-month basis [8] - Free cash flow on a trailing 12-month basis was $2.4 billion, including $637 million from CHIPS Act incentives [8] - The company returned $6.6 billion to shareholders over the past 12 months [8] Business Line Data and Key Metrics Changes - Analog revenue grew 16% year-over-year, while Embedded Processing grew 9% [4] - The industrial market increased about 25% year-over-year and low single digits sequentially [5] - The automotive market increased upper single digits year-over-year and around 10% sequentially [5] - Personal electronics grew low single digits year-over-year and upper single digits sequentially [5] - Enterprise systems grew about 35% year-over-year and about 20% sequentially [5] - Communications equipment grew about 45% year-over-year and was up about 10% sequentially [5] Market Data and Key Metrics Changes - The overall semiconductor market recovery is ongoing but at a slower pace than previous upturns, influenced by macroeconomic dynamics [4] - Customer inventories remain low, and inventory depletion appears to be behind the company [4] Company Strategy and Development Direction - The company plans to focus on long-term value creation through disciplined capital allocation and strengthening competitive advantages [10] - The company is winding down its 150mm fabs, with a gradual reduction in costs expected through the first half of 2026 [19] - The company aims to grow free cash flow per share over the long term, with a focus on industrial, automotive, and data center markets [49] Management's Comments on Operating Environment and Future Outlook - Management noted a moderate recovery in the semiconductor market, with hesitancy among customers regarding new investments due to uncertainty in regulations [64] - The automotive market is recovering steadily, while the data center market is experiencing strong growth [64] - The company expects fourth-quarter revenue in the range of $4.22-$4.58 billion and EPS between $1.13 and $1.39 [9] Other Important Information - The company announced a 4% increase in dividends, marking the 22nd consecutive year of dividend increases [8] - The effective tax rate is expected to be about 13% for the fourth quarter and 13% to 14% in 2026 [9][10] Q&A Session Summary Question: Can you talk about the linearity of bookings through the quarter? - Management indicated that the quarter came in as expected, with no significant changes compared to Q2 [12][13] Question: What is the path to improve cash margins given the current inventory levels? - Management expressed satisfaction with the current inventory position and indicated adjustments in loadings for the fourth quarter to maintain inventory levels [15][16] Question: Can you elaborate on the restructuring and its impact on expenses? - Management explained that the restructuring is related to winding down 150mm fabs and ongoing efficiency improvements, with benefits expected over time [19][22] Question: How are pricing trends and lead times looking? - Management confirmed no unusual pricing trends, with expectations of low single-digit price declines for the year [29][30] Question: What is the outlook for the enterprise data and communications business? - Management noted strong growth in the data center market, which is expected to continue, and plans to break out data center as a separate market in future reports [76]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $4.7 billion, reflecting a 7% sequential increase and a 14% year-over-year increase [3] - Gross profit was $2.7 billion, representing 57% of revenue, with a sequential decrease of 50 basis points in gross profit margin [5] - Operating profit was $1.7 billion, or 35% of revenue, up 7% from the previous year [5] - Net income for the quarter was $1.4 billion, translating to $1.48 per share, which included a $0.10 reduction due to restructuring charges [5][6] - Cash flow from operations was $2.2 billion for the quarter and $6.9 billion on a trailing 12-month basis [6] Business Line Data and Key Metrics Changes - Analog revenue grew 16% year-over-year, while Embedded Processing revenue increased by 9% [3] - The industrial market saw a 25% year-over-year increase and low single-digit growth sequentially [4] - The automotive market increased upper single digits year-over-year and around 10% sequentially [4] - Personal electronics grew low single digits year-over-year and upper single digits sequentially [4] - Enterprise systems grew about 35% year-over-year and 20% sequentially [4] - Communications equipment grew approximately 45% year-over-year and about 10% sequentially [4] Market Data and Key Metrics Changes - Customer inventories remain low, and inventory depletion appears to be behind the company [3] - The overall semiconductor market recovery is ongoing but at a slower pace than previous upturns due to macroeconomic dynamics [3] Company Strategy and Development Direction - The company plans to focus on long-term value creation through disciplined capital allocation and strengthening competitive advantages [9] - The company is winding down its 150mm fabs, with expected cost reductions through the first half of 2026 [15] - The company aims to continue investing in manufacturing, technology, and a broad product portfolio to enhance its market position [9][35] Management's Comments on Operating Environment and Future Outlook - Management noted a moderate recovery in the semiconductor market, with hesitancy among customers regarding new investments due to uncertainty in regulations [44] - The automotive sector is recovering well, while the data center market is experiencing strong growth [46] - The company expects Q4 revenue to be in the range of $4.22 to $4.58 billion, with EPS guidance of $1.13 to $1.39 [8] Other Important Information - The company returned $6.6 billion to shareholders over the past 12 months, including $1.2 billion in dividends and $119 million in stock repurchases [7] - The company has a strong balance sheet with $5.2 billion in cash and short-term investments and total debt of $14 billion [8] Q&A Session Summary Question: Can you talk about the linearity of bookings through the quarter? - Management indicated that Q3 was more stable compared to Q2, with no significant changes in bookings throughout the quarter [11] Question: Can you discuss the restructuring and its impact on expenses? - The restructuring is related to winding down 150mm fabs and consolidating R&D sites, with expected cost reductions in the future [15][16] Question: What are the expectations for gross margins in Q4? - Management indicated that gross margins are expected to decline due to lower revenue and increased depreciation [25][31] Question: How is the company addressing inventory levels? - The company is pleased with its current inventory position and aims to maintain it while ensuring high customer service levels [13][50] Question: What is the outlook for the data center market? - The data center market is growing rapidly, with no signs of slowdown, and the company plans to provide more details in future calls [54][55]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $4.7 billion, reflecting a 7% sequential increase and a 14% year-over-year increase [4] - Gross profit was $2.7 billion, representing 57% of revenue, with a sequential decrease of 50 basis points [8] - Operating profit was $1.7 billion, or 35% of revenue, up 7% from the previous year [9] - Net income was $1.4 billion, translating to $1.48 per share, which included a $0.10 reduction due to restructuring charges [9][10] - Free cash flow for the trailing twelve months was $2.4 billion, with $6.6 billion returned to shareholders over the past year [11][12] Business Line Data and Key Metrics Changes - Analog revenue grew 16% year-over-year, while Embedded Processing revenue increased by 9% [4] - The Other segment saw an 11% year-over-year growth [4] - The industrial market increased by approximately 25% year-over-year and low single digits sequentially [6] - The automotive market grew upper single digits year-over-year and around 10% sequentially [6] - Personal electronics grew low single digits year-over-year and upper single digits sequentially [6] - Enterprise Systems revenue increased about 35% year-over-year and 20% sequentially [6] - Communications Equipment grew about 45% year-over-year and 10% sequentially [6] Market Data and Key Metrics Changes - The overall semiconductor market recovery is ongoing but at a slower pace than previous upturns, influenced by macroeconomic dynamics [5] - Customer inventories remain low, and inventory depletion appears to be behind the company [5] Company Strategy and Development Direction - The company is focused on long-term value creation through disciplined capital allocation and strengthening competitive advantages in manufacturing and technology [14] - The company plans to continue investing in its broad product portfolio and diverse market positions [14] - The company is winding down its six-inch fabs, which is expected to gradually reduce costs through 2026 [26] Management's Comments on Operating Environment and Future Outlook - Management noted a moderate recovery in the semiconductor market, with hesitancy among customers regarding new investments due to uncertainty in regulations and tariffs [80] - The automotive market is recovering, while the data center market is experiencing strong growth, with investments increasing [82] - The company expects Q4 revenue to be in the range of $4.22 billion to $4.58 billion, with earnings per share between $1.13 and $1.39 [13] Other Important Information - The company announced a 4% increase in dividends, marking the 22nd consecutive year of dividend increases [11] - The effective tax rate is expected to be around 13% for Q4 and 2026 [13] Q&A Session Summary Question: Can you talk about the linearity of bookings through the quarter? - Management indicated that the quarter followed expected patterns, with no significant deviations compared to Q2 [16][17] Question: What about loadings assumed in Q4? - Management confirmed that loadings would be adjusted down in Q4 to manage inventory levels effectively [21][22] Question: Can you elaborate on the restructuring and its impact on expenses? - The restructuring is related to winding down certain fabs and is expected to yield cost reductions over time [25][28] Question: How is the pricing environment? - Management expects a low single-digit price reduction for the year, consistent with previous trends [36] Question: What is the outlook for China? - Management noted that China returned to normal conditions in Q3, with expectations for continued stability into Q4 [68][70] Question: What is the expected CapEx for next year? - Management indicated that CapEx is likely to be at the lower end of the previously outlined range due to the moderate recovery [72][74] Question: Can you discuss the strong performance in communications equipment? - Management explained that the growth in communications equipment is tied to data center investments and will be further detailed in future reports [95]

Summary of GlobalWafers Conference Call Company Overview - **Company**: GlobalWafers (6488 TT) - **Industry**: Semiconductor Wafers Key Financial Results (2Q25) - **Revenue**: NT$16,008 million, up 2.7% QoQ and 4.5% YoY [5] - **Gross Profit**: NT$4,123 million, down 16.7% YoY [5] - **Gross Margin (GM%)**: 25.8%, down from 32.3% YoY [5] - **Operating Profit**: NT$2,438 million, down 27.6% YoY [5] - **Net Income**: NT$1,682 million, down 41.6% YoY [5] - **Earnings Per Share (EPS)**: NT$3.52, down 41.5% YoY [5] Core Insights - **Market Outlook**: GWC anticipates some half-on-half (HoH) sales growth in 2H25 and year-on-year (YoY) growth in 2026 in US dollar terms [3][10] - **Capital Expenditure (Capex)**: Expected to remain similar to 2024 levels but significantly reduced in 2026 [3] - **Long-term Growth**: Despite a weaker semiconductor market, GWC expects a return to positive sales growth in 2025 and acceleration in 2026 [4] - **Gross Profit Margin (GPM)**: Expected to remain weaker than previous up-cycles due to higher depreciation, utility costs, and foreign exchange headwinds [4][10] Investment Ratings and Target Price - **Current Rating**: Outperform [4] - **Target Price**: NT$453.00, based on a 12x multiple of 2026E EPS [4][8] Additional Considerations - **Customer Inventory**: Reported to be down, with strong demand for leading-edge nodes [10] - **Cost Management**: The company is attempting to pass on cost increases to customers [10] - **US Market Entry**: GWC received its first grant/subsidy in the US in 2Q25, which may benefit from TSMC's aggressive long-term capex plans in the US [10] - **Prepayments**: Continue to decline sequentially due to an oversupply situation [10] Financial Projections - **Revenue Growth**: Expected to recover with a projected growth of 9.5% in 2025 and 19.4% in 2026 [9] - **Net Debt to Equity Ratio**: Expected to rise to 49.4% in 2025 [9] - **Return on Equity (ROE)**: Projected to improve to 15.9% by 2026 [9] Conclusion GlobalWafers is navigating a challenging semiconductor market but is positioned for potential growth in the coming years, supported by strategic cost management and market demand dynamics. The company's long-term outlook remains positive despite short-term challenges.