BT substrates industry update: Structural changes in S/D conditions; raise ZDT/Kinsus/NYPCB/Unimicron TPs to NT$1,025/1,515/2,700/1,270

We update our BT substrate industry model (last updated in 2021) to factor in: (1) solid memory substrate demand (accounting for a rising share of total BT substrate TAM); and (2) a slower capacity growth rate vs. the previous upcycle as key Asian BT substrate suppliers continue to transfer capacity from BT substrates to ABF substrates over the coming quarters/years. Our model now suggests the BT substrate industry supply/demand gap will widen significantly in 2027/28E, while overall BT substrate TAM will continue to expand. While BT substrate pricing has already risen, we expect BT substrate suppliers ZDT/Kinsus/NYPCB/Unimicron to see further BT pricing increases and strong BT substrate profit growth in 2026-28E. We are also seeing increasing adoption of mSAP technology in optical transceivers, which continues to tighten supply and expand the TAM for BT substrate players, and we believe ZDT will become a market share leader in this segment. We raise our TPs for ZDT/Kinsus/NYPCB and ad