Chipbond Technology Corporation (6147.TWO): Concrete improvement in fundamentals in sight

Nomura upgrades Chipbond Technology Corporation (6147.TWO) to Buy from Neutral and raises its target price to TWD270 (from TWD171), implying 43% upside, based on 30x (unchanged) 2027F EPS of TWD9.04, at the high end of the company's historical band to capture the diversification into silicon photonics (SiPh). We were encouraged by Chipbond's efforts to utilize its idle bumping capacity and make inroads into SiPh; beside the reset in market sentiment (share price -38% from the peak in late May vs. TAIEX +3%), we see increased progress in Chipbond's bumping services in SiPh and that its baseline DDIC business could enjoy the "AI ripple effect" given a Korean DDIC vendor's supply chain reshuffle. We lift our 2026/27/28F EPS from TWD4.55/5.71/6.70 to TWD5.77/9.04/10.60. TIA bumping remains the major driver in SiPh: while the addressable segments include TIA, photodetector (PD), driver and modulator, we believe so far only TIA and PD are in production, with most SiPh revenue from 200G TIA b