ABF Substrates – Implications of AT&S' 2QF26/27 Results

AT&S reported C3Q revenue of €682mn (+24% q/q): Electronics Solutions +26% q/q and Microelectronics (ABF) +23% q/q. C3Q/F2Q Microelectronics EBIT margin increased another 580bp q/q to 30.5%, which management attributed to higher volumes, better product mix and an improved pricing environment. Guidance unchanged: revenue +45-55% y/y and EBITDA margin 32-37%. AT&S expects its ongoing capacity expansion for the Microelectronics business to have a positive impact on revenue and earnings already in the current fiscal year. In June, AT&S announced the expansion of its Kulim site based on agreements with customer AMD and another leading technology company, and reaffirmed planned investments of €1.5-2.0bn supported by long-term customer commitments to meet growing demand for advanced IC substrates. In September it announced an expanded collaboration with Marvell to further increase advanced IC substrate capacity for next-generation AI and cloud infrastructure. Customers' commitments underpin t