Summary of the Earnings Call for Wiwynn (4Q25) Industry Overview - The report focuses on the **Taiwan PCB & Laminates** industry, particularly highlighting the positive outlook for companies involved in AI ASIC and general-purpose servers due to rising demand in 2026 [1] Company Insights - **Wiwynn** held its 4Q25 analyst meeting on February 27, 2026, where management provided insights into the company's performance and future expectations [1] - For 2026, management anticipates strong demand driven by AI and general-purpose servers, with AI sales expected to exceed 50% of total sales, compared to approximately 50% in 2025 [1] - The growth in AI servers will primarily be fueled by AI ASIC servers and AI GPU servers from **Nvidia** and **AMD**, with significant momentum expected in the second half of 2026 [1] - For general-purpose servers, unit shipments are projected to grow by 20-30% year-over-year in 2026 [1] - Capital expenditures (capex) for 2026 are expected to be significantly higher than NT$13 billion in 2025, with continuous increases anticipated in subsequent years due to robust customer demand [1] Market Implications - The report suggests that Taiwan's **CCL players** such as **EMC** and **TUC** will benefit from the rising demand for AI ASIC servers, particularly from major clients like **AWS** and **Google TPU** in 2026 [1] - For Taiwan PCB players, a positive outlook is held for **GCE** (AI ASIC + general-purpose server) and **Tripod** (general-purpose server) as they are expected to benefit from the trends in AI ASIC and general-purpose servers [1] Key Companies Mentioned - **Wiwynn** (6669.TW) - **Nvidia** (NVDA.O) - **AMD** (AMD.O) - **Alphabet Inc** (GOOGL.O) - **Amazon.com, Inc.** (AMZN.O) - **Elite Material** (2383.TW) - **Gold Circuit Electronics** (2368.TW) - **Tripod Technology** (3044.TW) - **TUC** (6274.TWO) [2] Additional Notes - The report emphasizes the importance of AI in driving future growth within the industry, indicating a shift towards more advanced server technologies [1] - The anticipated growth in capital expenditures reflects a strategic response to increasing customer demand, suggesting a bullish sentiment in the market for these technologies [1]

Summary of Conference Call Transcript Industry and Companies Involved - **Industry**: Taiwan PCB & Laminates - **Companies**: Unimicron (3037.TW) and NYPCB (8046.TW) Key Points and Arguments Unimicron's 4Q25 Results - **Revenue**: NT$34,691 million, an increase of 18% YoY and 2% QoQ [3] - **Gross Profit**: NT$5,472 million, up 61% YoY and 20% QoQ [3] - **Operating Profit**: NT$2,366 million, a significant increase of 248% YoY and 54% QoQ [3] - **Net Income**: NT$3,535 million, a dramatic rise of 6204% YoY and 61% QoQ [3] - **Earnings Per Share (EPS)**: NT$2.31, reflecting a 6204% increase YoY [3] - **Gross Margin (GM)**: 15.8%, up 4.2 percentage points YoY [3] - **Operating Margin (OM)**: 6.8%, an increase of 4.5 percentage points YoY [3] - **Tax Rate**: 5.7%, significantly lower than previous periods [3] NYPCB's 4Q25 Results - **Valuation**: Target price set at NT$450, based on a DCF model [5] - **WACC**: Calculated at 12.8% [5] - **Historical P/E Multiples**: NYPCB traded at 15-20x P/E during previous upcycles, indicating a high valuation during favorable market conditions [5] Market Sentiment and Future Outlook - **Analyst Meeting**: Unimicron's upcoming analyst meeting is expected to be bullish regarding long-term demand and pricing environment, justifying an increase in 2026 capex from NT$25.4 billion to NT$34 billion [1] - **Profit-Taking Risk**: Given the positive sentiment already priced into the stock, there is a risk of profit-taking by investors post-meeting [1] Risks Identified - **For NYPCB**: 1. Weaker-than-expected demand for ABF from key customers [6] 2. Seasonality weakness in the BT business and less-than-expected price hikes [6] 3. Severe T glass shortages causing production bottlenecks [6] - **For Unimicron**: 1. Weaker-than-expected HDI business [8] 2. Significant increase in ABF supply in the industry [8] 3. Margin pressure from depreciation due to higher capex investments [8] Additional Important Information - **OPEX Rate**: Increased due to higher employee bonuses or R&D for future product launches [1] - **Market Focus**: Investors are expected to focus on Unimicron's long-term demand outlook and pricing environment during the analyst meeting [1]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Taiwan PCB & Laminates, specifically focusing on the ABF (Ajinomoto Build-up Film) and BT (Bismaleimide Triazine) sectors - **Context**: The conference call discusses the recent price adjustments in the ABF CCL (Copper Clad Laminates) and Prepreg sectors announced by Resonac Core Insights - **Price Increase Announcement**: Resonac announced a 30% price increase for all CCLs and prepregs, effective from March 1, 2026, primarily due to rising costs of T glass and other raw materials like copper foil [1] - **Market Implications**: The price increase indicates a server shortage in T glass, suggesting strong demand from AI-related chips with larger body sizes [1] - **Cost Pass-Through**: Downstream ABF substrate manufacturers are expected to pass through these costs and potentially earn premiums due to robust demand [1] - **Future Price Trends**: Anticipation of further price increases in BT CCL in upcoming quarters due to market tightness [1] - **Sector Tightness**: Observations of tightness in the ABF/BT sector, with expectations that more fabless companies may be affected by a widespread substrate shortage in the near future [1] - **Outlook**: The overall sentiment remains bullish on the ABF/BT sector, indicating positive growth prospects [1] Additional Important Points - **Raw Material Costs**: The price adjustments reflect significant increases in raw material costs, particularly T glass, which is critical for the production of ABF substrates [1] - **Demand Drivers**: The demand for AI-related chips is a key driver for the current market dynamics, influencing both pricing and production strategies in the sector [1] - **Potential Risks**: While the outlook is positive, the sector may face risks related to supply chain disruptions and fluctuations in raw material availability [1]

Summary of Taiwan PCB & Laminates Conference Call Industry Overview - The focus is on the copper clad laminate (CCL) sector, which is expected to see unit and average selling price (ASP) growth in 2026E [1] - The recent share price correction in the sector is viewed as healthy, as initial expectations for M9-grade CCL adoption were overly optimistic [1][3] - AI server production is anticipated to ramp up more aggressively in 2026 compared to 2025, driven by the launch of more AI ASICs [1][2] Core Insights - **AI Demand and Production Bottlenecks**: Despite concerns about an AI bubble, demand for AI servers is expected to remain strong in 2026 due to unresolved production bottlenecks in the AI supply chain [2][11] - **ASP Growth Drivers**: The CCL sector is expected to benefit from spec migration and price hikes on low-end products, with multiple favorable ASP trends anticipated from 2026E onward [3][31] - **Southeast Asia Capacity Expansion**: While there is ongoing capacity expansion in Southeast Asia (SEA), production efficiency is likely lower than expected, leading to a preference for Chinese capacity in the short term [4][11] Company-Specific Insights - **Initiation of Coverage**: Coverage has been initiated on EMC and TUC with target prices set at NT$2,100 and NT$600, respectively, reflecting strong growth potential in high-end CCL for AI applications [1] - **EMC and TUC Positioning**: EMC is recognized as a leading player in high-end CCL for AI GPU/ASIC, while TUC is noted for its strength in high-end networking applications [1][27] Market Dynamics - **AI as a Growth Driver**: AI-driven server and networking demand is projected to underpin structural growth in the PCB industry, with server and data storage PCB demand expected to grow at an ~11% CAGR from 2025 to 2029 [14][15] - **Material Shortages**: Key materials such as low dielectric constant (Dk) glass fiber and high-end HVLP copper foil are in significant shortage, impacting the competitive landscape of the CCL industry [32][61] Risks and Considerations - **Investment Risks**: Key risks include slower-than-expected AI server demand and challenges in CCL upgrades [4] - **Supply Chain Challenges**: The transition to higher-grade materials like HVLP4 copper foil may lead to supply bottlenecks, as upgrading production lines can take 1-2 years [62][63] Conclusion - The CCL sector is poised for growth driven by AI demand, with specific companies like EMC and TUC positioned to capitalize on this trend. However, challenges such as material shortages and production inefficiencies in SEA could impact overall market dynamics.