Author: Yu Rou Lin | Release Date: August 27, 2024 12:36 | Categories: Semiconductors, Packaging Testing, Materials, Equipment

According to a recent report issued by the American foreign investment firm Morgan Stanley, Taiwanese semiconductor equipment manufacturers Gigalight and Wintelegen have been given ratings that are better than the market average in the two major trends of extreme ultraviolet (EUV) and CoWoS. Gigalight has a target price of up to NT$700, while Wintelegen has a target price of up to NT$500.

Morgan Stanley points out that EUV is the driving force behind the development of advanced processes, and leading foundries such as TSMC, Samsung, Intel, as well as leading memory manufacturers Samsung, SK Hynix, and Micron, are all increasing their adoption of EUV in advancing their processes.

Gigalight holds an 85% global market share in EUV pod, and as more applications of EUV are introduced with the migration of advanced process technology, Gigalight is expected to be a major beneficiary. Morgan Stanley believes that Gigalight's revenue is highly correlated with ASML's EUV installation volume, and expects its revenue to exceed the potential market size of the semiconductor industry.

Meanwhile, CoWoS investment remains strong, with expectations that capacity will reach 39 kwpm by the end of this year and 77 kwpm by the end of 2025, with TSMC being the main supplier of CoWoS.

Morgan Stanley states that Wintelegen focuses on back-end equipment such as dispensing, bonding, automatic optical inspection (AOI), and measurement equipment, and is also a major beneficiary of CoWoS capital expenditure expansion. The company holds a 100% market share in dispensing and thermal interface material (TIM) heat sink attachment in the "Wafer-on-Substrate" (WoS) process, so its revenue is highly correlated with global CoWoS capacity expansion. Morgan Stanley expects CoWoS to account for 70-80% of Wintelegen's revenue in the second half of the year.

As for global semiconductor equipment manufacturers, Morgan Stanley is bullish on ASML and MKS Instruments in the EUV field, with the latter responsible for exposure and process control. In the CoWoS segment, they are optimistic about ASM Pacific Technology (ASMPT) and Advantest, with the former providing fine pitch TCB tools and the latter focusing on testing equipment.

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