MediaTek, LandMark Benefit from AI and Silicon Photonics Demand
Cathay Securities Consulting noted on the 2nd that, with demand for AI ASICs, AI servers, silicon photonics, CPO, and high-speed optical communications continuing to heat up, semiconductors, advanced packaging, and ABF substrates face growth opportunities. MediaTek (2454) benefits from strong demand for AI ASICs and the Smart Edge Platform, with 26 revenue estimated to grow 14.2% YoY and 27 ASIC revenue contribution revised up to about NT$500 billion, driving overall revenue up 83.3% YoY; 26 and 27 EPS are estimated at NT$73.85 and NT$171.17, with a Buy rating maintained. LandMark (3081) benefits from growing demand for silicon photonics and 800G and 1.6T optical modules, with 4Q26 earnings expected to hit a new peak; with strong demand for CW Laser and EPI Wafer and packaging capacity coming online, 26 and 27 EPS are estimated at NT$21.49 and NT$65.65, with a Buy rating maintained.
Lite-On Shifted to Neutral, Makalot Targets New High
Lite-On (2301) posted record single-quarter EPS in 3Q26 on AI server power supply demand, but contributions from ASIC PSU, BBU, NVIDIA Power Shelf, and 800VDC solutions are deferred, while memory shortages limit 27 growth; 26 and 27 EPS are estimated at NT$10.84 and NT$11.49, with the rating downgraded to Neutral. Makalot (1477) benefits from an improved product mix and more short-lead orders, with 3Q26 EPS estimated at NT$3.97 and 4Q26 gross margin expected to rise to 25.3%; looking to 27, with customer inventory normalization and a higher share of sports products, full-year EPS is estimated at NT$17.11, a record high, with an estimated 26 dividend yield of about 7%, and a Buy rating maintained.
Chipbond, Advanced Echem Materials, Hon Hai Momentum Remains Strong
Chipbond (6147) posted record-high 3Q26 revenue of NT$7.58 billion, with EPS of NT$2.46 beating expectations; with the 1.6T optical module upgrade driving demand for TIA, PD, and advanced packaging, 27 optical communications revenue is expected to grow more than 3-fold to over 20% of revenue, with EPS seen at NT$10.52, and a Strong Buy rating maintained. Advanced Echem Materials (4749) posted 3Q26 EPS of NT$5.63, beating expectations, benefiting from economies of scale in its semiconductor business and improved gross margin; with its new N2 plant in production, shipments of Rinse, BARC, and EBR materials are increasing quarter by quarter, and a higher share of N3 and N2 advanced processes will lift revenue and earnings, with a Buy rating maintained. Hon Hai (2317) showcased its AI data center integration capabilities including DSX POD, Vera Rubin racks, and CPO at its Tech Day, with DSX POD build time cut to about 14 days and rack assembly yield reaching 99.9%; 26 and 27 EPS are estimated at NT$17.89 and NT$23.65, with a Buy rating maintained.
ABF Gap May Widen, Focus on Election and Interest Rates
On the ABF industry, Prismark forecasts the global substrate market will grow from US$14.9 billion in 2025 to US$40.2 billion in 2030, with AI and HPC driving demand for high-end ABF substrates; with materials and equipment expansion constrained, the supply-demand gap may widen after 27, favoring Unimicron (3037), Nan Ya PCB (8046), Kinsus (3189), and Zhen Ding Technology (4958). On macroeconomics, the likelihood of a divided Congress rises after the U.S. midterm elections, making fiscal policy harder to advance; the economy remains resilient, but inflation, energy, and tariff pressures limit room for Fed rate cuts, the U.S. dollar stays elevated, and continued AI data center expansion keeps driving demand for grid and power supply equipment, though rising build costs may add to capex pressure.