Globalwafers stock rating upgraded to Buy at UBS on silicon wafer demand

UBS has upgraded Globalwafers Co Ltd. (6488:TT) from Neutral to Buy, doubling its price target to NT$700.00, driven by an improved industry outlook for 12-inch silicon wafers. The firm revised 2025-2027 utilization estimates upwards, citing slowed greenfield capacity expansion by major players and a projected demand recovery starting Q2 2025, with 12-inch wafer demand forecast to grow 11% in 2025 and 10% in 2026. Despite a recent 40% stock rally, UBS anticipates further upside from increasing silicon wafer utilization, stabilizing spot prices, and Globalwafers' accelerating U.S. expansion plans from 2026.

Analysis

UBS has issued a significant upgrade for Globalwafers Co Ltd. (6488:TT), moving its rating from Neutral to Buy and doubling the price target to NT$700.00 from NT$350.00. This revision is predicated on an improved industry-wide outlook for 12-inch silicon wafers, a critical component in semiconductor manufacturing. The bank's conviction stems from revised utilization forecasts, which are now projected at 81.8% for 2025 and 82.2% for 2026, up substantially from previous estimates of 77.7% and 76.4%, respectively. Two primary factors underpin this bullish view: a slowdown in greenfield capacity expansion by major industry players, which is expected to constrain supply, and a meaningful demand recovery anticipated to begin in the second quarter of 2025. UBS projects 12-inch wafer demand will grow 11% in 2025 and 10% in 2026, supported by recovering memory demand and higher foundry utilization. Despite Globalwafers' stock already appreciating 40% in September, UBS identifies further upside catalysts, including the stabilization of wafer spot prices and the company's accelerating U.S. expansion plans slated for 2026.

Key Decisions for Investors

• Given the doubled price target and fundamental tailwinds from a tightening supply-demand balance, investors should evaluate the significant upside potential in Globalwafers (6488:TT) even after its recent 40% rally.
• It is crucial to monitor industry-level data, specifically silicon wafer utilization rates and spot pricing, as these are the key leading indicators cited by UBS that could trigger the next phase of the stock's appreciation.
• The thesis points to a recovery beginning in mid-2025 and continuing into 2026, suggesting an investment horizon of at least 12-24 months may be necessary to realize the full potential of this cycle.