Focus stock: Nan Ya says ABF substrate prices have no ceiling! Stock surges to daily limit on return

Nan Ya Printed Circuit Board (PCB) is making a substantial capital investment of NT$46.8 billion to construct a next-generation advanced packaging substrate factory. This move positions the company to capitalize on the escalating demand and pricing power within the semiconductor industry.

According to a recent report from a US-based foreign investment firm, the market for ABF (Ajinomoto Build-up Film) substrates faces a significant supply shortage. This imbalance is expected to persist for several quarters, with the tight supply-demand situation unlikely to resolve before 2028. Consequently, ABF substrate prices are projected to rise sequentially and annually, with no clear ceiling in sight. The report also suggests that BT substrate prices could see a 20-30% increase each quarter, leading to a substantial improvement in profit margins.

Reflecting this positive outlook, Nan Ya's stock experienced a sharp surge on its first day back after a trading suspension. The stock hit its daily upper limit, reaching NT$1265, with significant trading volume. This strong market reaction underscores investor confidence in the company's strategic investments and the favorable industry conditions.

The foreign investment firm maintained its "Buy" rating on Nan Ya, setting a target price of NT$2500. The analysis highlights Nan Ya's role as a key supplier in the ABF substrate spot market and anticipates the company will strongly benefit from the ongoing supply shortages and price increases. The firm projects sustained revenue and profit growth for Nan Ya due to the persistent supply-demand gap and rising ABF substrate prices.