Nomura maintains Buy on GlobalWafers and raises target price to TWD1,200

Overview

This report is Nomura's update on GlobalWafers (6488.TWO) regarding the semiconductor wafer cycle, pricing environment, and new materials opportunities. The report believes that semiconductor wafer supply-demand dynamics continue to improve, and the increase in spot prices may exceed previous expectations; at the same time, SiC heat spreader applications for NVIDIA's next-generation Feynman GPU could become a new revenue opportunity starting from 2028F. Based on higher earnings forecasts and valuation multiples, Nomura maintains its Buy rating and raises the target price.

Core views

The core views include: first, the semiconductor wafer cycle is recovering, customer procurement volumes are above previous commitments, and leading manufacturers such as GWC are in a position to raise prices; second, spot prices were about 20% below LTA prices during 2023-25, and after price increases in 2026F, some spot prices may catch up with LTA prices by the end of 2026; third, potential adoption of SiC heat spreaders in advanced packaging could provide GWC with a new source of materials revenue; fourth, although depreciation expenses still weigh on earnings in the near term, demand growth and upward pricing momentum are expected to improve margins in 2027-28F.

Analysis framework

The report uses bottom-up industry checks, comparisons of semiconductor wafer spot prices and LTA prices, customer procurement trends, capacity utilization of leading manufacturers, assessments of advanced packaging material roadmaps, and the P/B valuation method to form its investment conclusion. Earnings forecasts cover 2026-28F and include SiC heat spreader revenue contribution as a medium- to long-term incremental assumption.

Methodology notes

• Valuation methodsP/B multiple method

  The target price is based on 4.8x 2028F BVPS

  The new target price of TWD1,200 is based on 2028F book value per share of TWD252 and 4.8x P/B; 4.8x is in the upper half of the 2-6x P/B range seen during the full semiconductor wafer cycle in 2017-2020.

• Industry cycleSupply-demand and pricing cycle analysis

  Spot price recovery and increased customer procurement

  The report concludes that the wafer pricing environment continues to improve based on about 5-10% half-year spot price recovery in 1H26F, further increases in 2H26F, and concurrent procurement increases from memory and logic foundry customers.

• Technology trendAdvanced packaging materials opportunity analysis

  SiC heat spreaders for Feynman GPU packaging

  The report believes NVIDIA's next-generation Feynman GPU may use SiC heat spreaders as integrated silicon interposers and thermal interface materials, contributing about 5-10% of GWC revenue as early as 2028F.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• GlobalWafers (6488.TWO)

  The core company covered in the report and the main beneficiary of the recovery in the semiconductor wafer cycle and the SiC heat spreader opportunity.

  Strengths

  The world's third-largest and largest non-Japanese wafer manufacturer, with a full production line from 3-inch to 12-inch wafers; improving supply-demand conditions and rising prices are favorable for revenue and profit recovery.

  Weaknesses

  Short-term earnings are still pressured by depreciation expenses from new capacity expansion.

  Comparison

  The target valuation of 4.8x 2028F P/B is in the upper half of the historical 2-6x P/B range during the full wafer cycle in 2017-2020; the stock currently trades at about 3.7x 2028F BVPS.

  Risks

  China entering the 12-inch wafer market faster, slower-than-expected market consolidation, weaker-than-expected end demand, deteriorating supply-demand dynamics, unfavorable FX fluctuations, and rising materials and utility costs.

• NVIDIA (NVDA US)

  A potential demand driver, as its next-generation Feynman GPU may drive the adoption of SiC heat spreaders in advanced packaging.

  Strengths

  GPU-on-GPU SoIC stacking creates higher thermal dissipation requirements, which may drive adoption of new materials.

  Weaknesses

  The report does not assign a rating to NVIDIA, and SiC heat spreader adoption remains a future technology roadmap assumption.

  Comparison

  The Feynman-related SiC heat spreader opportunity is viewed as an incremental materials opportunity for GWC beyond its traditional wafer business.

  Risks

  If Feynman design, mass production timing, or material choices differ from assumptions, the related revenue contribution may be delayed or come in below expectations.

• Siltronic (WAF GR)

  An investee of GWC, whose share price gains year to date in 2026 have already contributed non-operating gains.

  Strengths

  Siltronic's share price increase supports GWC's recognized non-operating gains.

  Weaknesses

  The report does not include the impact of Siltronic's share price after 2H26F in its forecasts.

  Comparison

  This factor is a source of non-operating gains, unlike GWC's core wafer business and SiC materials opportunity.

  Risks

  If Siltronic's share price falls, the related non-operating gains may weaken.

Key data

• RatingBuyThe rating remains unchanged.
• Target priceTWD1,200Raised from TWD850.
• Closing priceTWD936.00As of 26-Jun-2026.
• Implied upside+28.2%Calculated based on the new target price and closing price.
• 2026-28F earnings forecast revision+11%至+41%Nomura raised its 2026-28F earnings forecasts.
• FY26F revenue forecastTWD61,726mnNew forecast, above the previous forecast of TWD61,159mn.
• FY27F revenue forecastTWD73,535mnNew forecast, above the previous forecast of TWD71,372mn.
• FY28F revenue forecastTWD88,666mnNew forecast, above the previous forecast of TWD83,460mn.
• FY28F net profit forecastTWD19,163mnNew forecast, above the previous forecast of TWD15,322mn.
• FY28F FD normalised EPSTWD40.08Corresponding to FY28F FD normalised P/E of 23.4x.
• 2028F BVPSTWD252Used for 4.8x P/B target price valuation.
• SiC heat spreader revenue contribution assumption约5-10%The report assumes it will contribute to GWC total revenue as early as 2028F.

Impact & implications

The investment implication of this report for GlobalWafers is positive: improvements in the wafer cycle and pricing support earnings upgrades, and the SiC heat spreader opportunity in advanced packaging enhances medium- to long-term growth prospects, while the target price increase reflects higher BVPS and a higher P/B valuation multiple. However, the investment conclusion still depends on the competitive landscape in 12-inch wafers, end semiconductor demand, the sustainability of price recovery, and changes in materials and utility costs.

Risks

• China entering the 12-inch semiconductor wafer market faster.
• Market consolidation progressing more slowly than expected.
• End semiconductor demand coming in below expectations.
• Supply-demand dynamics in the semiconductor wafer industry being weaker than expected.
• Unfavorable exchange-rate fluctuations, as well as rising material and utility costs.

What to watch

• Whether semiconductor wafer spot price increases in 2H26F exceed previous expectations.
• Whether spot prices can catch up with LTA prices by the end of 2026.
• Whether procurement volumes from memory companies and logic foundries continue to exceed committed volumes.
• Whether 12-inch capacity utilization at leading wafer companies remains tight.
• Whether NVIDIA's Feynman GPU adopts SiC heat spreaders, and its mass production timeline.
• The progress of margin recovery between GWC's depreciation expense pressure and upward pricing.