Taiwan Supplier Monthly Sales Tracker: Largan and Chroma ATE Q2 Revenue Significantly Beats Expectations

Overview

This report analyzes the Q2 2026 performance of Largan Precision and Chroma ATE by tracking monthly sales data from Taiwanese tech hardware suppliers. Data indicates that both companies' Apr-May sales significantly exceeded market expectations, primarily driven by strong demand for Apple's iPhone series and robust demand for AI data center-related test equipment, respectively. Despite strong near-term fundamentals, the firm has assigned different investment ratings to the two companies, reflecting divergent views on valuation levels and long-term growth drivers.

Core views

For Largan Precision, consolidated sales for Apr-May reached NT$10 billion, up 30% YoY in USD terms. Based on typical seasonality, Q2 revenue is projected between NT$14 billion and NT$15.7 billion (+20%-35% YoY), with a midpoint of NT$15.1 billion, approximately 15% above market consensus. This beat is mainly attributed to strong iPhone 17 series sales and the initial production ramp-up of higher ASP variable aperture lenses for the iPhone 18. However, regarding Largan's closely watched CPO (Co-Packaged Optics) business, channel checks indicate its FAU optical components remain in the sampling phase, with revenue contributions not expected until late 2027. The stock has recently rebounded over 40% on CPO optimism and Apple WWDC expectations, bringing valuation back to approx. 20x P/E. While the firm believes Largan will benefit long-term from the Taiwan-centric CPO supply chain, near-term profit-taking is possible, hence the maintenance of the 'Market-Perform' rating. For Chroma ATE, Apr-May sales reached NT$9.4 billion, surging 129% YoY in USD terms. Q2 sales are projected between NT$13.8 billion and NT$15.6 billion (+115%-141% YoY), with a midpoint of NT$14.9 billion, approximately 20% above market consensus. Growth was primarily driven by strong demand for Automatic Test Systems (ATS), semiconductor/photonics testers, and China Energy Storage System (ESS) projects. Although equipment company sales tend to be lumpy, Chroma's diversified product portfolio helps smooth quarterly volatility, and current trends suggest solid sequential growth in Q2. The firm continues to view Chroma ATE as a key beneficiary of rising power, thermal, and photonics demands in AI data centers, maintaining an 'Outperform' rating.

Analysis framework

This report employs a 'Monthly High-Frequency Data Tracking + Seasonal Extrapolation' analytical approach. First, we extract the latest disclosed monthly sales data (Apr-May) for the target companies and calculate YoY growth rates to confirm near-term momentum. Second, combining historical seasonality patterns, we forecast revenue ranges for June and the full Q2, comparing the forecast midpoint against market consensus to quantify the magnitude of the 'beat.' Finally, we integrate channel checks to verify progress on specific product lines (e.g., Largan's CPO, Chroma's ATS) and combine short-term financial performance with long-term industry themes (e.g., AI data centers, new iPhone cycles) to assess valuation reasonableness and potential risks.

Methodology notes

• Industry/Sector Analysis FrameworkVolume-price decomposition

  Analyzing YoY changes in sales to decompose revenue drivers into volume (e.g., iPhone shipments) and price (e.g., increased mix of high-ASP lenses).

  In analyzing Largan, the report explicitly identifies 'strong iPhone 17 sales' (volume/demand side) and 'initial ramp-up of high-ASP variable aperture lenses' (price/mix side) as dual drivers of the revenue beat, representing typical volume-price analysis logic.

• Event Arbitrage & Behavioral FinanceExpectation Gap/Expectations Management

  Comparing actual or forecasted operating data against market consensus to identify positive or negative expectation gaps.

  The report's core conclusion is based on the fact of being 'above consensus' (Largan +15%, Chroma +20%), using quantified expectation gaps to judge short-term stock price catalysts or resistance levels.

• Valuation MethodologyPE/PEG valuation

  Calculating target prices by applying Price-to-Earnings (P/E) multiples to estimated Earnings Per Share (EPS), referencing historical valuation ranges to assess current valuation levels.

  The report explicitly states Largan's target price is based on 14x 2026-27 average forward EPS, and Chroma ATE's on 38x 2027 EPS. It also notes potential profit-taking pressure after Largan rebounded to ~20x P/E, demonstrating the application of relative valuation methods.

Asset mapping & comparison

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

• Largan Precision (3008.TT)

  Benefits from strong iPhone 17 sales and iPhone 18 high-ASP lens ramp-up; long-term beneficiary of CPO supply chain.

  Strengths

  Leading market share in high-end smartphone lenses; entry into high-value CPO segment; significant Q2 earnings beat.

  Weaknesses

  Revenue contribution from CPO business is still early (expected late 2027); recent stock rally has been substantial, leaving valuation at elevated levels.

  Comparison

  Compared to pure-play AI concept stocks, Largan retains a base supported by traditional mobile phone business, but may lack the explosive growth potential of pure-play AI test equipment makers.

  Risks

  iPhone 17 replacement cycle weaker than expected; market share loss due to intensified competition exceeding expectations; margin pressure from new product ramp-ups or competition.

• Chroma ATE (2360.TT)

  As a key supplier of power, thermal, and photonics test equipment for AI data centers, directly benefits from AI chip and energy storage project demand.

  Strengths

  Diversified product portfolio smooths quarterly volatility; strong demand for ATS and semiconductor/photonics testers; significant Q2 earnings beat.

  Weaknesses

  Equipment industry sales are inherently lumpy.

  Comparison

  Compared to Largan, Chroma ATE is a purer play on AI infrastructure capex with stronger near-term growth momentum.

  Risks

  Demand for AI chips from hyperscalers/AI startups lower than expected; intensified competition in AI chip SLT market; slower-than-expected EV penetration rate.

Key data

• Largan Apr-May SalesNT$10bn+30% YoY in USD terms
• Largan Q2 Revenue Forecast MidpointNT$15.1bnApprox. 15% above market consensus
• Chroma ATE Apr-May SalesNT$9.4bn+129% YoY in USD terms
• Chroma ATE Q2 Revenue Forecast MidpointNT$14.9bnApprox. 20% above market consensus
• Largan Target PriceNT$2,600Based on 14x 2026-27 avg. forward EPS (NT$186)
• Chroma ATE Target PriceNT$1,660Based on 38x 2027 EPS (NT$43.7)

Impact & implications

For Largan Precision, the near-term earnings beat confirms the resilience of Apple supply chain demand, particularly the value uplift from high-end lens specification upgrades. However, commercialization of the CPO business must wait until late 2027; the current stock rally largely reflects sentiment and pricing in future expectations, so investors should be wary of near-term valuation correction risks. For Chroma ATE, its diversified layout in AI data center testing is translating into results; high growth appears sustainable and can smooth single-market volatility, making it a quality target for AI hardware infrastructure build-out. Overall, driven by the dual engines of AI and high-end consumer electronics, performance among leading Taiwanese tech hardware supply chain firms is diverging significantly, with companies possessing core technical barriers better positioned to enjoy valuation premiums.

Risks

• Largan Precision: iPhone 17 replacement cycle weaker than expected; market share loss from key customers due to intensified competition exceeding expectations; margin pressure from new product ramp-ups or competition exceeding expectations.
• Chroma ATE: Demand for AI chips from hyperscale data centers, AI startups, and enterprises lower than expected; intensified competition in AI chip SLT market; slower-than-expected EV penetration rate.

What to watch

• Sampling progress of Largan's CPO FAU optical components and confirmation of revenue contribution in 2027.
• Yield ramp-up and ASP trends for iPhone 18 variable aperture lenses.
• Order sustainability for Chroma ATE in the AI data center testing sector.
• Quarterly gross margin trends for both companies to validate the impact of product mix upgrades.