Summary of Key Points from the Conference Call Industry Overview - **Event**: Taiwan Tech Tour held on August 19-21, focusing on AI and its impact on the technology sector [1] - **Key Themes**: - AI remains a central topic with discussions on Nvidia's B300 AI server ramp-up expected in Q3/Q4 2025 [1] - Transition to AI platforms and its potential impact in the second half of 2025 [1] - Tight supply of substrate raw materials affecting production [1] - Growth in supply chain content value anticipated from Rubin/Rubin Ultra platforms in 2026/27 [1] - Positive outlook for ASIC development into 2026 [1] - Increased R&D requirements driven by AI, with fewer suppliers expected to outperform [1] - Potential for CoWoP (Chip-on-Wafer-on-Package) technology, though challenges remain [1] Semiconductor and Equipment Insights - **Testing Interface**: Optimism expressed by testing-interface companies regarding AI GPU/accelerators demand due to a new product cycle expected in late 2025 [2] - **Wafer Sorting Complexity**: Increased complexity in wafer sorting and testing noted, with leading foundry suppliers likely to keep advanced packaging in-house [2] - **Inventory Levels**: Non-AI areas reported healthy inventory levels, with clients placing rush orders [2] Substrate and Material Supply - **Substrate Tightness**: General consensus on tightness in substrate raw materials, with larger clients less affected in the near term [3] - **CoWoP Technology**: Seen as a downgraded version of CoWoS, facing significant challenges before it can be scaled effectively [3] Hardware Supply Chain Developments - **Power Supply and Cooling**: Rising content value for power supply and cooling components highlighted, with Delta expecting server power demand to grow 35-40% YoY in 2025 [4] - **Liquid Cooling Trends**: Liquid-to-air cooling remains mainstream due to easier deployment compared to liquid-to-liquid cooling [4] - **HPC/AEC Business Growth**: BizLink anticipates content growth in HPC/AEC business, with upgrades in specifications and increased lengths for interconnects [4] Company-Specific Insights - **Delta Electronics**: - Q3 2025 sales expected to grow QoQ, with AI-related power supply and infrastructure as main drivers [12] - Anticipates liquid cooling to comprise 5-6% of total sales in 2025 [16] - **MPI Corporation**: - Plans to enter 2nm-based projects in 2026, maintaining a dominant market share in ASIC projects [13] - **Vanguard International Semiconductor**: - Expects a flat demand outlook from IT products into 2H25, with a focus on power-related products [13] - **Unimicron**: - Anticipates a significant uptick in AI-related shipments from Q4 2025, with supply constraints easing [13] - **Auras**: - Projects 35-40% YoY sales growth in 2025, with a focus on liquid cooling contributions [16] - **Lotes**: - Maintains a sales growth guidance of 13-17% YoY for 2025, with a focus on the auto business [16] Financial Outlook and Risks - **Delta Electronics Price Objective**: NT$750 based on a P/E of 29x for 2026E, justified by strong market position and growth in AI-related products [27] - **BizLink Price Objective**: NT$820 based on a P/E of 17x, reflecting expanding margins and macro uncertainties [24] - **Auras Price Objective**: NT$825 based on a P/E of 18x, driven by strong demand in the cooling component market [21] - **Risks**: Include potential softer demand in AI servers, macroeconomic uncertainties, and competition pressures [23][26][28] Conclusion The conference highlighted significant growth opportunities in the AI and semiconductor sectors, with companies like Delta, MPI, and Auras positioned to benefit from rising demand and technological advancements. However, challenges such as material supply constraints and competitive pressures remain critical considerations for investors.