PETALING JAYA: The rapid buildout of artificial intelligence (AI) infrastructure is driving a new semiconductor investment cycle, shifting demand from consumer electronics-led demand to hyperscalers and data centres, a trend expected to underpin resilient order momentum for UWC Bhd
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According to Affin Hwang Investment Bank Bhd (Affin Hwang IB), the Malaysian precision engineering firm is leveraging its relationships with two major customers, alongside its system integration programme with Customer V, to enhance manufacturing value-add and deepen customer integration.
The group had noted demand from Customer T, a leading semiconductor test equipment original equipment manufacturer serving the AI accelerator market, has more than tripled from eight test handlers per week in mid-2025 to around 25 per week currently.
Meanwhile, UWC’s Customer I order flow is expected to recover as AI workloads shift towards inference and agentic AI applications.
Affin Hwang IB said this transition is expected to increase demand for central processing units (CPUs) alongside graphics processing units, bolstering the next server CPU refresh cycle.
This could drive a recovery for Customer I and further strengthen UWC’s back-end manufacturing outlook.
Looking ahead, the research house believes UWC’s structural growth trajectory will be driven by its strategic expansion into the front-end wafer fabrication equipment (WFE) market.
The group’s WFE segment accounted for approximately 87% of global semiconductor equipment spending in 2025, compared with only 13% for back-end assembly, packaging and test equipment, providing access to a substantially larger addressable market, it pointed out.
Affin Hwang IB expects WFE’s contribution to group revenue to increase from 31% in financial year 2025 (FY25) to 46% by FY28, fuelled by new programme ramp-ups and higher manufacturing content.
The research house initiated coverage with a “buy” call and a target price of RM8.30, based on a price-to-earnings ratio of 46 times its calendar year 2027 estimated earnings per share.
