GlobalWafers Earnings Forecast Rises as Silicon Wafer Spot Prices Surge Amid Supply Chain Component Price Hikes
Nomura Securities raised its earnings forecast for GlobalWafers, anticipating that the silicon wafer maker can gain from the unexpected increased demand for spot prices in the second half of the year. The firm maintained its buy call for the stock while boosting its price target to NT$ 1200 (approximately $37.45 USD). Other Taiwan based investment advisory parties remain optimistic, with some even maintaining Buy ratings and setting price targets as high as NT$ 1500 (approximately $46.81 USD) for the major semiconductor material vendor.
The bullish trend in GlobalWafers follows a wider trend of price increases radiating out from the electronics component supply chain. Earlier over investment in memory chips and passives has now been replaced by a similar boom in copper clad laminates, glass fiber sheets, and upstream raw materials. Riding the wave of price rises through the sector, the company shares have once again reached their daily ceiling rise, following a correction earlier in the session.
Market intelligence obtained from Nomura Securities suggests that silicon wafer spot prices are already up by 5 to 10 percent during the first half of the year. While the earlier expectation was for a flat 10 percent rise in spot prices during the subsequent half, the latest supply chain audit indicates a stronger demand picture. Logic foundries and memory makers have started boosting their silicon wafer purchases, which provides a full fledged demand picture. Consequently, spot prices in the second half are expected to go much higher than original estimates.
This heightened demand provides wafer manufacturers with much greater bargaining power during contract negotiations. This is particularly true in cases where customer order sizes surpass historical levels of the contractual agreement. Historically, spot prices were approximately 20 percent less than the long term agreement rate between 2023 and 2025. However, thanks to this tremendous bull run, industry experts forecast that spot prices for some wafer types will soon translate into the long term contract prices.
