Which Substrate Stock Stands Out? Analyst Favors Unimicron as AI Demand Lifts Forecasts

Table of Contents

• You might want to know
• Main Topic
• Key Insights Table
• Afterwards...

You might want to know

• Among Taiwan’s three leading ABF substrate makers, why does veteran market commentator Jin-long Du (杜金龍) favor Unimicron?
• What warning signs does he associate with short-term rallies driven by new materials or private-placement pricing?

Main Topic

Taiwan’s annual PCB industry event, the TPCA Show, has brought renewed attention to high-end materials and advanced thermal management. Demand for high-end boards is being encouraged by AI servers and high-speed computing, while the ABF substrate sector—after a long period of subdued investor interest—has returned to the market’s spotlight. As foreign institutional investors revise their ratings and forecasts, the leading Taiwan substrate companies, Unimicron (欣興, 3037-TW), Nan Ya PCB (南電, 8046-TW), and Kinsus (景碩, 3189-TW), have all shown stronger momentum.

The central question for investors is which company may be the preferred choice when investment capital is limited to one stock. Speaking on the program What Investors Want to Know, veteran Taiwan market commentator Jin-long Du said he has repeatedly highlighted substrates during public talks as a sector worth watching in AI over the coming years. Among the three companies, he identified Unimicron as his first choice. This is an attributed market opinion, not a guarantee of future performance or a recommendation that suits every investor.

The three companies each have distinct points of interest. Nan Ya PCB is described as having the strongest profitability among the group, with estimated EPS of 70-something dollars and an overseas institutional target price reportedly above 2,000 dollars. Kinsus, whose earlier valuation base was relatively low, has recently staged a forceful catch-up move; some investors and institutions have reportedly achieved returns several times their original investment. These comparisons help explain why the group has attracted attention, but they do not establish that any one company will continue to outperform.

Du’s preference for Unimicron rests on three arguments. First, he points to its research and development capability and customer position. In his view, the company has made significant progress in technology and has positioned itself in the latest 1.6T high-speed optical-module PCB segment. He argues that access to leading global chip customers and orders can support a substantial industry moat. These claims reflect his assessment of the competitive landscape; investors should verify company disclosures and market data independently.

Second, Du describes Unimicron’s share-price pattern as relatively steady, characterized by strong advances followed by smaller pullbacks. Compared with stocks that may rise and fall abruptly, he considers this stair-step pattern more consistent with an ongoing bullish structure. Price patterns, however, are not reliable predictors on their own. Market conditions, earnings announcements, capital flows, and broader risk appetite can all change the way a stock trades.

Third, Du highlights a major increase in the company’s earnings outlook. He said earlier institutional estimates for Unimicron’s 2028 EPS were around 50 dollars, while newer research estimates had been raised to above 71 dollars. He connects that upward revision to the expanding requirements of AI-related computing and advanced PCB products. Because forecasts are estimates rather than realized results, the assumptions behind them—including demand, production capacity, pricing, and costs—remain important to monitor.

Du presented a simple valuation illustration using EPS multiplied by a price-to-earnings ratio. Under his stated assumptions, 71 dollars EPS multiplied by a 20-times P/E ratio equals 1,420 dollars. This calculation is a valuation scenario, not a prediction that the share price will necessarily reach that level. The result depends on the earnings estimate being achieved and on the market assigning the assumed multiple.

Du also recalled that concerns about possible “origin-washing” issues had previously pushed Unimicron’s share price to the 600-something-dollar range. He said he had wanted to buy when the price later pulled back to around 940 dollars and 1,000 dollars, and commented that the stock seemed to rise whenever he had not bought it. His longer-term framework is to watch monthly revenue and whether institutional EPS estimates continue to move higher. He considers pullbacks toward the quarterly moving average potential opportunities to assess, but any such decision involves risk and should be based on an investor’s own financial circumstances and research.

Beyond substrate makers, the TPCA Show also drew attention to the greater drilling difficulty associated with advanced board materials. More demanding processing can raise drill-bit wear, putting drill-bit supplier Topoint (尖點, 8021-TW) in the spotlight. Topoint reported first-half EPS of 3.2 dollars. Du used a simple annualized estimate to suggest full-year EPS could exceed 6 dollars, representing a significant increase from the previous two years. Annualizing a partial-year result is only a rough calculation and does not ensure that later results will match the earlier pace.

Du cautioned that Topoint’s monthly-chart behavior has tended to follow a pattern of a sharp rally when positive news arrives, followed by a pullback and consolidation. He said that, in the absence of a long-term authoritative earnings model to anchor valuation, the stock may be better suited to range trading when exhibition-related themes ignite and the price turns upward from a low level. His view is that investors should not assume a short-term thematic move makes the stock appropriate for long-term holding.

A separate short-term theme emerged after Nvidia displayed an NVLink switch at the OCP Global Summit and announced the use of a new material, PTFE (Teflon). Taiwan-based suppliers Taiwan Union Technology (台郡, 6269-TW) and Taiflex Scientific (台虹, 8039-TW) reportedly recorded several consecutive limit-up sessions. Du noted that even his wife placed an order at the limit-up price. The dramatic price action illustrates how quickly investor interest can move toward supply-chain stories, but it also underscores the possibility of sharp reversals.

Du’s key warning concerned Taiwan Union Technology’s planned private placement. He described the company as having moved from a loss of 6 dollars last year to a profit of 2 dollars this year, with an estimate of 3 dollars for the year after next. He also said it was preparing a private placement of 320 million dollars, equivalent to about 10%. These figures and estimates are presented as reported in the interview and should be checked against current company filings and disclosures.

Drawing on his past experience as a leading underwriter in the underwriting department at Ta Hua Securities, Du described a potential pattern around private placements and convertible bonds. Before pricing, he said, major or designated buyers may support the share price in an effort to lift the placement or conversion price. Once pricing is set and the intended objective has been achieved, that support may end, potentially leaving the share price vulnerable. As examples, he referred to Wistron being priced in the 180-something-dollar range and UMC in the 140-something-dollar range, followed by declines after the relevant pricing events. Such examples are not proof that every financing follows the same pattern, but they highlight why financing terms and timing may matter to investors.

For short-term risk management, Du pointed to the high-volume session following Taiwan Union Technology’s consecutive limit-up moves. The stock had recorded historically high trading volume and a volatile session in which it opened higher and then fell. His proposed warning level is the low of that high-volume day: if the share price falls below it during the session, he considers that a sign that the short-term theme may have run ahead of itself and that major holders may be exiting. He applies a similar high-volume-low reference to Taiflex Scientific, suggesting it can serve as a strict basis for evaluating exits. This is one trading approach, not a universally reliable rule.

Overall, Du proposes a two-track framework for the PCB-related stocks discussed. For a longer-term core position, he favors Unimicron and its forecast EPS revision to above 71 dollars, with a view toward the potential AI-related opportunity through 2028. For thematic trades in Topoint, Taiwan Union Technology, and Taiflex Scientific, he emphasizes recognizing the short-term nature of the catalyst, acting with discipline, and defining exit conditions in advance. The distinction is between a thesis based on longer-term earnings expectations and a trade based on a temporary market theme; neither is free of risk.

This article summarizes views attributed to a program interview and is provided for informational purposes only. It is not investment advice. Readers should conduct independent research, assess risks carefully, and make decisions based on their own circumstances. The original article was reproduced with authorization from U Analysis; individual stocks, funds, and futures mentioned are for reference only and should not be treated as recommendations.

Key Insights Table

Afterwards...

The outlook for Taiwan’s PCB and substrate businesses will depend on whether demand linked to AI servers, high-speed computing, and advanced materials converts into sustainable orders and earnings. Investors can follow company disclosures, revenue trends, capacity plans, and forecast revisions rather than relying solely on a sector narrative or a single price target.

For stocks driven by near-term announcements or financing events, the same discipline applies: understand the catalyst, examine the relevant disclosures, and decide in advance how much volatility is acceptable. Du’s distinction between a longer-term Unimicron thesis and short-term trades in thematic names offers one framework for analysis, but outcomes remain uncertain and independent judgment is essential.