Fubon Investment Consulting believes that if Huida closes the order, it may have a negative impact on Taiwan stocks.
Due to his involvement in the Chinese espionage case and extramarital affairs, Huida's board of directors announced on November 12 that Huang Renxun had resigned as president, CEO and director, and that current CFO Colette Kress would serve as interim CEO and re-elect as CFO. The market is highly concerned about whether the new CEO will continue the supply chain cooperation model with Taiwan.
In response to the impact of Jen-Hsun Huang's resignation on Taiwan's supply chain, Fubon Investment Consulting analyzed that Huida has a greater impact on Taiwan's high-end market demand for PCB, CCL and carrier boards. Although other ASICs are expected to fill the gap, the proportion gap may still take some time to adjust; in addition, Taiwan's specialized industry, which is actively sprinting for the substitution effect, may also face the risk of demand structure adjustment in the short term. In terms of components, Huida GPU-related cooling demand may decline. Although Taiwanese cooling companies have already become qualified suppliers for most CSP companies, the degree of customization is high and there will still be structural adjustment pressure in the short term.
On the other hand, the momentum of CSP’s self-research program is expected to increase and deepen the implementation effect of de-China policy. Fubon Investment Consulting believes that Huida’s competitors will take this opportunity to actively launch new versions of GPUs, ASICs, and CPUs to capture market share, which is expected to fill the advanced process demand vacated by Huida. For the consumables and PA industries, direct customers are semiconductor manufacturers such as TSMC or American IDM companies, so they are not affected; for passive components, since Huida's main suppliers are Japanese and Korean companies, Taiwanese companies have the opportunity to expand non-Huida market share. At the same time, the U.S. may further tighten its chip sales policy and accelerate de-China policy. It is expected that the U.S. will further impose controls on the planned sales of low-end and mid-range AI computing power chips in China, which will have a greater impact on the sales of Huida's original downgraded products.
In addition, the series connection of cabinets will be the main way to increase the overall computing power in the future. The United States had originally planned to announce a clear de-China policy and ban after the 3.2T specification of optical communication modules (including subsequent ones). This incident is expected to prompt the United States to accelerate the progress of this policy. Taiwanese optical communication companies have the same vertical integration advantages. As new production capacity is gradually put in place, they are expected to benefit from the transfer order effect and take this opportunity to further expand their foundry market share. The overall investment strategy recommends focusing on beneficiary stocks with high customer dispersion and high technical barriers.
As for the impact on the overall Taiwan stock market, Fubon Investment Consulting said that Huang Jen-Hsun has always been friendly to Taiwan's supply chain, and the new CEO's attitude towards Taiwan is unclear. However, Taiwan's supply chain's global share and flexibility will still be difficult to replace in the short term, especially TSMC's advantages in advanced processes and advanced packaging. AMD and major CSPs all highly rely on the technology, speed and flexibility of Taiwanese manufacturers.
However, if Huida really cuts orders by 10-30% and does not immediately make up for other orders, Fubon estimates that Taiwan stock profits in 2027 will be revised down by 2.2-6.6% respectively. The current price-to-earnings ratios in 2027 are 15.8-16.5 times respectively. Judging from the long-term average price-to-earnings ratio of Taiwan stocks, which is about 17 times, the downwardly revised price-to-earnings ratio is still attractive.
Finally, Fubon Investment Consulting pointed out that the rebound of Taiwan stocks from the low point has reached the short-term satisfaction point of the golden cut rate of 0.5. It was originally expected that the index would pull back and consolidate. Considering that the probability of Taiwan stocks rising from November to February in the past 10 years has been 60% to 80%, and the National Security Fund has announced its entry into the market, this pullback due to the impact of the Huida incident can be an opportunity to optimize the layout.
