JPM-Asia First to Market Top Stories-20250717

Near-term impact from T-glass supply constraint

2Q preview: Decent 2Q revenue momentum but FX impact meaningful. Unimicronreported 2Q revenue of NT$32.5bn, up 8% q-o-q, in-line with consensus and JPMe.Excluding the effect of a strong TWD, revenue growth would have been in the range of13-15% q-o-q, making it one of the strongest 2Qs in recent years. Mix during 2Q islikely similar to that in 1Q, as both substrates and non-substrates benefitted from risingshipments/improving yields for Blackwell (we saw both substrate and HDI yields risemeaningfully in 2Q). However, despite decent revenue growth, we believe margins arelikely to be just flattish vs 1Q, as the company’s sensitivity to FX impact seems to be abit higher than our previous expectation (0.5-0.6 ppt per 1ppt swing of TWD, vs ourexpectation of 0.3-0.4ppt). Meanwhile, we also expect the strong TWD to impact non-op income as the company holds USD-denominated assets.