The Taiwan Weighted Index surged to 44,954 points at one point today (28th), but closed down 620 points at 43,636 points. The spread between the intraday high and low reached 1,718 points, and trading volume expanded to nearly 1.6 trillion. The closely watched substrate group also opened high and then fell. In particular, Unimicron (3037) once surged to 1,130 NTD, then dropped to a low of 1,000 NTD, but stabilized to close at 1,025 NTD, holding the 1,000 NTD mark. Regarding the future of the substrate group, PCB queen and President of Uni-President Investment Consulting, Liao Wanting, said that substrates are expected to rise in price in the second half of the year, and the PCB supply chain will also benefit from the price hikes and scarcity, leading to simultaneous price increases.
Liao Wanting had previously expressed optimism about Unimicron's future, which recently joined the thousand-dollar club. Foreign brokerages have raised their target price for Unimicron to as high as 1,350 NTD. Liao believes that entering the Rubin era, the demand for chip computing power has increased, requiring more layers and larger area for substrates. However, the increase in substrate demand cannot keep up with capacity expansion, causing supply tightness and subsequent price hikes. After the price increase, profits are revised upward, simultaneously lifting stock prices. The PCB queen further explained that the rise in ABF stock prices in the first half of the year was due to rising raw material prices. In the second half, when Rubin actually begins to pull inventory and capacity tightens, the real price increase for substrates will begin.
Liao said that apart from substrates, Taiwan Union Technology and TUC also have opportunities for price increases, mainly due to scarcity and simultaneous CCL price hikes. Taiwan Union Technology and TUC have the leverage to pick orders and choose the ones with better profit margins. Therefore, this year, the gross margins and profits of these two major CCL manufacturers are likely to be revised upward, and their stock prices may hit new highs. The same situation applies to copper foil, such as Jinnju (8358), and even drill bit manufacturer Topoint (8021). The first-quarter financial reports of drill bit manufacturers exceeded her expectations.
Liao added that Jinnju, due to copper foil upgrades, has good yield rates, which means profit margins could improve. According to Uni-President Investment Consulting's report, Jinnju's revenue in 2024 and 2025 grew nearly 20% YoY, but estimates for 2026 and 2027 could reach 57% and 54%. However, Goldman Sachs predicts that Jinnju's revenue in 2027 could grow 85% YoY, factoring in the price increase, and further raised its target price to 900 NTD.
Liao advised that for companies with unchanged trends and price-increase themes, investors should not preset target prices. The PCB industry chain and many leading stocks have opportunities for a "Davis Double Play," similar to the reasons she was optimistic about Unimicron.
