Goldman Sachs reiterates Buy on Winway Technology Co. (6515.TW): CPO testing could become the next key bottleneck and incremental opportunity

Overview

This is a Goldman Sachs company research report on Winway Technology Co. (6515.TW) and the minutes from the WinWay CPO technology forum. The report's core conclusion is that testing and optical alignment will become key challenges in CPO commercialization, while WinWay's testing solutions can cover wafer-level, die-level, package-level, and module-level testing for EIC/PIC. Goldman Sachs reiterates its Buy rating, believing that CPO testing demand will become a new long-term growth driver for the company beyond traditional AI GPU/ASIC socket demand.

Core views

The report argues that the industry's shift toward optical interconnects is intended to address limitations such as signal loss in copper interconnects, but CPO mass production still faces difficulties in testing and optical alignment. WinWay's opportunity is not limited to final module testing; it spans multiple testing layers throughout the production process: wafer-level testing uses probe heads, die and package-level testing requires socket solutions, and module-level testing may drive demand for HyperSocket. As CPO package sizes may exceed 100mm x 100mm and even approach 200mm x 200mm, pin counts rise from over 10k to more than 50k, signal speeds reach 224Gbps PAM4 and above, and power consumption per device exceeds 4kW, traditional sockets may come under pressure in terms of contact stability, warpage tolerance, and mechanical alignment consistency. WinWay's HyperSocket, which combines elastomer contact and spring probe, appears better suited to these requirements.

Analysis framework

The report is based on management's presentation at WinWay's CPO technology forum on May 14, 2026. It breaks down silicon photonics/CPO architecture, the testing process, and the testing challenges at each stage, then maps these requirements to WinWay's existing product portfolio. On valuation, Goldman Sachs uses a target P/E approach, applying a 40x target P/E to 2028E EPS and discounting it back to 2027E at a 13.6% cost of equity to derive a 12-month target price of NT$15,000.

Methodology notes

• Valuation methodsTarget P/E method

  Estimating the target price using a target P/E multiple

  Goldman Sachs applies a 40x target P/E to WinWay, equal to 1.26x the 3-year average forward P/E of 31.5x, applies it to 2028E EPS, and discounts it back to 2027E at a 13.6% CoE.

• Fundamental frameworkGS Factor Profile

  Comparison of growth, financial returns, valuation multiples, and composite factors

  GS Factor Profile provides investment context for the stock by comparing growth, financial returns, valuation multiples, and composite indicators versus the market and industry peers.

• M&A scenarioM&A Rank

  M&A probability score

  Goldman Sachs discloses WinWay's M&A Rank as 3, indicating a low probability of being an acquisition target and typically not included in the target price.

Asset mapping & comparison

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

• Winway Technology Co. (6515.TW)

  The company covered in the report and a direct beneficiary of CPO testing and AI/HPC socket demand.

  Strengths

  The world's second-largest socket supplier; product coverage spans test sockets, burn-in sockets, probe heads, and HyperSocket; positioned to benefit from AI GPU/ASIC, CPU, MEMS probe card, and CPO testing demand.

  Weaknesses

  Current valuation is above the 3-year average forward P/E, and growth realization depends on new TAM penetration, customer ramp-up, and product upgrade timing.

  Comparison

  Relative to Taiwan semiconductor coverage names and the broader Asia ex. Japan coverage universe, Goldman Sachs expresses a relatively positive view with a Buy rating.

  Risks

  Weaker-than-expected AI/HPC demand, slower-than-expected penetration into new TAMs, and intensifying competition.

• CPO testing ecosystem

  The incremental demand source identified in the report.

  Strengths

  Wafer-level, die-level, package-level, and module-level testing each create different requirements for electrical contact, optical coupling, alignment control, and mechanical stability.

  Weaknesses

  CPO commercialization still faces testing complexity and optical alignment challenges, and the pace of mass production remains uncertain.

  Comparison

  Compared with traditional AI GPU/ASIC socket demand, CPO brings more complex, more customized, and cross-layer testing requirements.

  Risks

  CPO adoption may be slower than expected, or standardization of testing solutions may reduce customization value.

• HyperSocket

  WinWay's key solution for module-level CPO and advanced packaging testing.

  Strengths

  By combining elastomer contact and spring probe, it helps improve contact stability, reduce and stabilize contact resistance, increase current-carrying capability, lower Joule heating, and reduce total testing cost of ownership.

  Weaknesses

  Value realization depends on the speed at which customers adopt it for ultra-large packages, high pin counts, and high-power testing.

  Comparison

  Compared with traditional spring-probe sockets, HyperSocket is better suited to severe package warpage and high pin-count conditions.

  Risks

  If traditional sockets or competing solutions are sufficient to meet customer needs, the incremental ASP and penetration rate for HyperSocket may fall short of expectations.

Key data

• RatingBuyBoth the report title and the investment view indicate a reiterated Buy rating.
• 12-month target priceNT$15,000Based on a 40x target P/E, 2028E EPS, and discounting at a 13.6% CoE.
• Price at disclosureNT$10,540.00The company-specific disclosure section lists the price for Winway Technology Co.
• Implied upsideApprox. 42.3%Estimated using the NT$15,000 target price and NT$10,540.00 price, excluding dividends.
• Market capNT$361.5bn / US$11.5bnReport key data.
• Enterprise valueNT$358.6bn / US$11.4bnReport key data.
• 3-month average daily turnoverNT$3.3bn / US$102.7mnReport key data.
• Revenue/earnings CAGR forecast2025-28E revenue 78%, earnings 109%Goldman Sachs investment thesis section.
• Global socket revenue shareApprox. 8% (2024)The report says WinWay is the world's second-largest socket supplier.
• Socket revenue share56%The report says 56% of revenue comes from the socket segment.
• Key CPO testing spec trends>100mm x 100mm to 200mm x 200mm packages, >10k to 50k+ pins, 224Gbps PAM4 and above, >4kW power consumptionFuture CPO scaling challenges emphasized by management at the forum.

Impact & implications

If CPO enters large-scale production, testing may become one of the key bottlenecks in the value chain. For WinWay, this means the company can expand from a single final-test socket supplier into a multi-stage solution provider covering wafer, die, package, and module testing; greater product complexity and customization should lift ASPs and, together with AI/HPC testing demand, support medium- to long-term revenue and earnings growth.

Risks

• AI/HPC demand is weaker than expected.
• Penetration into new TAMs is slower than expected.
• Intensifying competition pressures share, pricing, or margins.
• The pace of CPO commercialization, testing solutions, and the difficulty of optical alignment remain uncertain.
• At a high valuation, the stock could correct if revenue and earnings growth miss expectations.

What to watch

• The timeline for CPO moving from sample validation to mass production and the pace of customer adoption.
• WinWay's order flow and revenue contribution from EIC/PIC wafer-level probe heads, die/package sockets, and module-level HyperSocket.
• Socket upgrade cycles and ASP changes among AI GPU, AI ASIC, CPU, and networking customers.
• Customer validation progress for HyperSocket in ultra-large packages, high pin-count, and high-power testing.
• Whether the 2025-2028E revenue and earnings CAGR can be delivered in line with Goldman Sachs' expectations.