Nomura Maintains Buy on GlobalWafers, Raises Target Price to TWD1,800

Overview

This report is a Nomura company research and rating-upgrade note on GlobalWafers. The core event is the 10-year long-term supply agreement announced between Micron and GlobalWafers, with Micron providing a USD500mn prepayment to lock in 12-inch semiconductor silicon wafer supply. Nomura believes the agreement arrived earlier than expected, meaning storage companies have begun pre-securing upstream supply, and the semiconductor silicon wafer upcycle may already have started.

Core views

Nomura maintains a Buy rating on GlobalWafers and raises the target price from TWD1,200 to TWD1,800. The report argues Micron’s action could prompt other well-capitalized semiconductor leaders with strong end demand to lock in strategic resources early, pushing pricing power higher across the semiconductor supply chain. For GlobalWafers, the 10-year LTA breaks the previous record of an 8-year LTA and helps improve customer mix while deepening cooperation with Micron and potentially U.S. semiconductor customers.

Analysis framework

The report analyzes the impact of long-term supply agreements on supply-demand, pricing, customer mix, and earnings expectations, and applies price-to-book multiples from historical upcycle periods for valuation. Nomura increased 2026-2028 earnings forecasts by 7%-99%, expecting revenue to recover moderately in 2026, accelerate from H2 2026, and benefit from a more favorable supply-demand environment in 2027-2028.

Methodology notes

• Valuation methodsprice_to_book_multiple

  Price-to-book valuation

  The TWD1,800 target is based on a 6x price-to-book multiple on forecast 2028 BVPS of TWD300; the 6x target multiple sits at the upper end of the 2x-6x historical P/B range observed in the full 2017-2020 semiconductor silicon wafer cycle.

• industry_cyclesemi_wafer_upcycle_lta_signal

  LTA as an upcycle signal

  The report treats early signing of long-term supply agreements as a signal of tightening supply-demand and the start of an upcycle, and references industry behavior after LTA talks began in the second half of 2016 through the first half of 2018 semiconductor silicon wafer upcycle.

Asset mapping & comparison

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

• GlobalWafers 6488.TW

  Primary coverage company, benefiting from Micron's 10-year LTA, semiconductor wafer price gains, and improved customer structure.

  Strengths

  The world's third-largest and largest non-Japanese silicon wafer manufacturer, with end-to-end production coverage from 3-inch to 12-inch silicon wafers; the long-term contract strengthens order visibility.

  Weaknesses

  Near-term profitability remains pressured by higher depreciation costs from new capacity expansion.

  Comparison

  The report uses the full 2017-2020 semiconductor silicon wafer cycle 2x-6x P/B range as valuation reference and sets 6x as the target multiple.

  Risks

  Faster entry by Chinese peers into the 12-inch silicon wafer market, slower-than-expected industry consolidation, weaker-than-expected end demand, worsening supply-demand dynamics, FX volatility, and rising material and utility costs.

• Micron MU US

  New 10-year LTA customer for GlobalWafers, providing a USD500mn prepayment to lock in 12-inch semiconductor silicon wafer supply.

  Strengths

  The report views Micron locking in upstream supply early as a sign of ample liquidity and strategic protection against future demand.

  Weaknesses

  The report does not assign a rating for Micron.

  Comparison

  Micron's participation may change GlobalWafers' historical customer mix that was previously heavily reliant on Samsung as a storage customer.

  Risks

  Pricing and product mix under the agreement may be adjusted over the ten-year contract period, and actual earnings contribution depends on implementation timing.

• Samsung 005930.KS

  Historical major storage customer of GlobalWafers.

  Strengths

  As a key storage customer, it provides an existing customer base for GlobalWafers.

  Weaknesses

  The report implies GlobalWafers' customer concentration may need to be optimized through participation from customers such as Micron.

  Comparison

  Rising participation from Micron is expected to make GlobalWafers' storage customer base more diversified.

  Risks

  No company-specific risk disclosed separately.

Key data

• RatingBuyNomura maintains a Buy rating.
• Target PriceTWD 1,800Raised from TWD1,200.
• Close PriceTWD 1,350Price date is 2026-07-09.
• Implied Upside+33.3%Calculated from target and close prices.
• Micron PrepaymentUSD 500mnUsed to lock in 10-year supply of 12-inch semiconductor silicon wafers.
• Earnings Revision+7% to +99%Nomura raised 2026-2028 earnings estimates.
• Valuation Assumption6x 2028F BVPS TWD300Target P/B multiple is at the upper end of the historical cycle range.
• Market CapitalizationUSD 20,085.7mnAs disclosed in the report tables.
• 3-Month ADTUSD 193.3mnAs disclosed in the report tables.

Impact & implications

If the Micron agreement leads more semiconductor customers to lock in capacity early, GlobalWafers could benefit from stronger order visibility, improved customer mix, and rising silicon wafer prices. The report notes that the share of semiconductor silicon wafers in storage wafer prices is currently below 1%, lower than the 3%-5% level two years ago, implying room for repricing. In the near term, however, profitability is still pressured by higher depreciation from added capacity, and the speed of price increases and end-market demand recovery will determine how fast earnings normalize.

Risks

• Chinese peers enter the 12-inch semiconductor silicon wafer market faster than expected.
• Industry consolidation is slower than expected.
• End-market demand in the semiconductor industry is weaker than expected.
• Semiconductor silicon wafer supply-demand dynamics are worse than expected.
• Adverse FX moves, as well as higher materials and utility costs.
• Higher depreciation from new capacity expansion keeps short-term profitability under pressure.

What to watch

• The pace of price adjustments and product mix changes under the Micron 10-year LTA.
• Whether other U.S. or global semiconductor companies sign similar long-term agreements with GlobalWafers.
• Whether second-half 2026 revenue starts to accelerate as Nomura expects.
• Whether the semiconductor silicon wafer supply-demand environment continues to improve through 2027-2028.
• The impact of Siltronic share performance on GlobalWafers investment and non-operating gains.
• The pace at which Chinese competitors enter the 12-inch silicon wafer market.