Taiwan Rebound Focuses on AI Supply Chain
After last week's correction, Taiwan stocks staged a strong rebound on the 9th, with AI supply chain and semiconductor stocks leading the market. Cathay Securities Futures consultants noted that AI computing demand continues to expand, from NAND Flash, enterprise SSDs, AI server power supplies, and 800G switches to advanced packaging equipment, high-end CCL and PCB materials, with long-term growth momentum remaining strong.
Phison Hits Limit-Up, EPS Seen at 455.55 Yuan
Phison benefited from surging AI and enterprise SSD demand, with 3Q26 operations hitting a record high, and momentum expected to continue into 4Q26. In 2026, benefiting from NAND price increases, Enterprise SSD volume growth, and low-cost inventory advantages, EPS is estimated at 455.55 yuan. In 2027, as AI inference and KV Cache Offload drive high-capacity SSD demand, with PCIe Gen6 and aiDAPT taking over growth, EPS is estimated at 380.70 yuan, with a Buy rating maintained. Phison shares hit the daily limit today, closing at 1,650 yuan, up 150 yuan or 10%, with volume of about 1,118 lots.
AES-KY, Accton, Holy Stone Remain Strong
AES-KY posted 3Q26 revenue of 5.234 billion yuan, up 8.9% QoQ and 26.8% YoY, with first-three-quarter EPS of 35.95 yuan. Benefiting from strong BBU demand from CSP customers, with high-voltage battery modules entering mass production in 2027, 2026 and 2027 EPS are estimated at 46.96 yuan and 59.19 yuan, with a Buy rating maintained. Accton posted October revenue of 44.663 billion yuan, up 10.6% MoM and 91.2% YoY, a fresh record high, with 3Q26 revenue of 120.744 billion yuan, up 26.4% QoQ, and EPS estimated at 23.91 yuan, with a Buy rating maintained. Holy Stone posted October revenue of 1.432 billion yuan, up 33.4% YoY, with 4Q26 EPS estimated at 5.08 yuan, and MLCC capacity expected to increase by about 40% in 2027, with a Buy rating maintained.
Cybersecurity, Equipment, PCB and Macro Developments
AIDC has completed delivery of 66 Brave Eagle advanced trainers, with military business shifting to maintenance from 4Q26. 2026 and 2027 EPS are estimated at 2.58 yuan and 2.45 yuan, with a Neutral rating maintained. Brokers are also positive on AI cybersecurity, advanced processes and high-end PCB materials, naming CHT Security, Zero One, Systex, as well as Hermes Epitek, Chang Guang, Eternal Materials, EMC and TUC. Doosan announced investment of about 970 billion Korean won to expand CCL lines, with actual production likely delayed until the first half of 29. On the macro front, U.S. October nonfarm payrolls added 165,000 jobs, the U.S. dollar remains strong, USD/TWD may test 33, and focus next week will be on U.S. October CPI, estimated at 3.7% YoY, and Taiwan export performance.