Summary of Conference Call Notes Industry Overview - **Industry Focus**: Taiwan Technology, specifically AI power applications and related components such as PCBs and substrates [1][2][3][4] Key Company Insights Delta Electronics - **Positive Investor Sentiment**: Investors are optimistic about Delta's AI power business, driven by solid growth in average selling price (ASP) per watt and product shipments, despite concerns regarding profitability and valuation [2][6] - **Revenue Growth**: Delta's revenue increased by 5% month-over-month and 27% year-over-year, reaching NT$47.9 billion, attributed to strong demand for AI power supply units (PSUs) [9] - **Market Share and Product Upgrades**: Delta is expected to maintain a high market share in the AI server PSU market, with AI power revenue projected to grow from 12% of total revenue in 2025 to 31% and 47% in 2026 and 2027, respectively [15][9] - **Long-term Growth Drivers**: The company is well-positioned to benefit from trends in EV, 5G infrastructure, and data center power needs, with a projected revenue CAGR of over 20% from 2023 to 2030 [35] NYPCB - **Substrate Market Position**: NYPCB is expected to benefit from favorable pricing trends in BT and non-LTA ABF substrates, with a significant portion of revenue (70%+) coming from these segments [38] - **Earnings Growth Outlook**: Anticipated earnings growth of 175% from 2025 to 2027, driven by increasing demand and pricing power in the substrate market [38] Zhen Ding Technology (ZDT) - **Market Share Expansion**: ZDT is projected to capture over 40% of the ABF substrate market in China by 2027, benefiting from the growing demand for AI computing components [40] - **Revenue Contribution from New Products**: The company is expected to see foldable smartphones contribute significantly to revenue, accounting for over 55% by 2027 [40] Competitive Landscape - **PCB and Substrate Competition**: Concerns exist regarding aggressive expansion plans from PCB players, which may lead to unfavorable competition dynamics. However, demand for AI PCBs is expected to grow at a CAGR of 40-50% from 2025 to 2027, while tier 1 suppliers' capacity growth is projected at 25-30% [3][4] - **Pricing Trends**: BT substrate prices have already increased by 20-25% since July, with further hikes expected due to T-glass shortages. ABF substrate pricing is anticipated to rise by 5-10% per quarter starting from Q4 2025 [20][22] Investment Ratings - **Delta Electronics**: Maintained a Buy rating with a target price of NT$670, reflecting a favorable long-term outlook despite valuation concerns [5][36] - **NYPCB**: Also rated Buy, with a target price of NT$280, supported by strong earnings growth potential [39] - **ZDT**: Rated Buy, with a target price of NT$220, driven by positive market dynamics in the ABF substrate sector [42] Risks and Considerations - **Market Risks**: Key risks include slower-than-expected growth in AI server power consumption, potential market share loss, and currency fluctuations impacting profitability [36][39][43] - **Valuation Concerns**: Some investors express discomfort with Delta's current valuation compared to historical averages, suggesting a need for caution [11] Conclusion - The Taiwan technology sector, particularly in AI power and related components, presents significant growth opportunities. Companies like Delta, NYPCB, and ZDT are well-positioned to capitalize on these trends, although investors should remain aware of competitive pressures and market risks.