The stock prices of Xinxing, Jingshuo and Nandian are fragrant; ABF carrier board's rising trend raises the target price

Chip design companies AMD, Huida and Intel are said to have paid more than US$5 billion to Taiwanese substrate manufacturers. This figure is consistent with the investment amount of Taiwan's top three IC substrate manufacturers, Xinxing (3037), Jingshuo (3189) and Nanjing Nandian (8046), which are expanding their production bases to meet growing demand. Previously, Korean media reported that Tesla and Huida are increasing investment in Samsung to ensure substrate supply for the next five years.

Substrates are a key link in the semiconductor supply chain, allowing companies such as TSMC to package different components such as memory chips and GPU chips into a single module. The most commonly used substrate in this field is Ajinomoto Additive Manufacturing Film (ABF).

wccftech reported that the booming development of artificial intelligence chips and server equipment has also had an impact on the substrate market. For example, a report in May said that ABF substrate manufacturers were raising spot prices due to tight production capacity and long lead times. Specifically, the price of additive films, a key component of substrates, is expected to increase by 30%, which will result in a 3% to 6% increase in the price of the final substrate product.

Three companies, Xinxing, Jingshuo and Nandian, are investing more than US$5 billion in Taiwan's substrate supply chain to ensure long-term production capacity. Although major substrate manufacturers have not disclosed specific customers, they have begun to expand production capacity.

Local legal persons pointed out that the three major ABF companies, including Xinxing, Jingshuo and Nandian, all continued to record revenue in September and performed better than expected, reflecting strong demand for carrier boards and rising prices.

The legal person further gave a "buy" rating to three stocks including Xinxing, Jingshuo and Nandian. Among them, the most optimistic about the growth of Nandian was the target price of "2 prefix" to 2,000 yuan. Xinxing and Jingshuo were each priced at 1,200 yuan.

Previously, Korean media reported that Huida and Tesla were investing in Samsung to reserve production capacity for flip-chip ball grid array (FC-BGA) substrates. FC-BGA is an emerging technology mainly used in artificial intelligence chips. The report states that the reason for this expansion is that the region is expected to become the next shortage area in the artificial intelligence chip supply chain.

The report focuses specifically on Tesla, noting that the substrates supplied will be used in chip manufacturing for the company's self-driving cars and humanoid robots. During Tesla's most recent earnings call, CEO Musk outlined plans for robotic production and laid out his view on the value of the company's Terafab wafer manufacturing project.