CSP Capital Expenditure Keeps Surging as GPU Production Value Targets New High
Although the market has recently voiced concerns over the timing of returns on artificial intelligence investment and power supply, a local institutional investor's latest in-depth industry report notes that global cloud service providers show no sign of slowing capital expenditure, forecasting it will reach 1.43 trillion U.S. dollars in 2027 and exceed 1.85 trillion U.S. dollars in 2028. Driven by both packaging volume and chip value, global GPU and AI ASIC production value in 2028 is expected to reach 1.112 trillion U.S. dollars, up 49.4% year-on-year. The institution believes Taiwan's supply chain, with its key position, is fully embracing long-term business opportunities.
TSMC Remains at the Core of CoWoS as OSAT Faces Stringent Tests
In advanced logic processes and CoWoS advanced packaging, TSMC (2330) has the most direct and broad business exposure. As AI computing demand surges, the institution forecasts its EPS will be 112.6 and 166.1 for 2026 and 2027 respectively, with a Buy rating and a target price of up to 3,500. The institution notes that although high-end packaging equipment carries high unit prices, related supply chain momentum remains strong as capacity expands and demand heats up. In back-end testing and packaging, ASE Technology Holding (3711) is capturing outsourced packaging opportunities through its VIPack platform, with forecast EPS of 21.9 and 36.6 for 2026 and 2027 respectively, with a Buy rating and a target price of 820.
Testing and ASICs Gain Momentum as Server Leader Seizes Opportunities
As chips move toward chiplets and heterogeneous integration, high-power chips are driving burn-in and testing demand. King Yuan Electronics (2449) is forecast to post EPS of 8.3 and 15.0 for 2026 and 2027 respectively, with a target price of 350; Chroma (2360) plays a key role in advanced packaging measurement and test equipment, with forecast EPS of 50.2 and 69.8 for the next two years and a target price of up to 2,700. In custom ASICs, MediaTek (2454) is actively expanding projects and is expected to win more orders from international majors, with forecast EPS of 153.3 and 70.8 for 2026 and 2027 respectively, with a Buy rating and a target price of 6,000. Hon Hai (7769) leverages assembly and vertical integration strengths, with forecast EPS of 135.8 and 216.5 for 2026 and 2027 respectively and a target price of up to 8,600. The local institution believes that as long as end demand and capacity arrive as scheduled, earnings performance of Taiwan's semiconductor and technology supply chains is worth anticipating.