PETALING JAYA: Unisem (M) Bhd
is poised for stronger earnings growth as utilisation at its Gopeng Phase 1 (GP1) facility improves, its wafer-bumping operation turns around and customer demand picks up.
CIMB Research said the semiconductor assembly and test services provider is also laying the groundwork for its next growth phase, with construction of GP2 expected to begin in the fourth quarter of financial year 2026.
GP2, which will involve capital expenditure of RM1bil to RM1.1bil, is expected to expand Unisem’s capabilities into wafer bumping, probing and advanced wafer-level packaging, complementing its existing assembly and testing operations.
The research house said GP1 was currently operating at about 60% to 70% utilisation, with the main constraint now being volume loading rather than the facility’s physical readiness.
“We expect sequential revenue growth to continue, with profit after tax growth potentially outpacing revenue growth as operating leverage improves.
“Key earnings drivers include a stronger production ramp from Monolithic Power Systems and Infineon in the second half of financial year 2026 (2H26), turnaround at Unisem Advanced Technologies (UAT), higher GP1 utilisation, and a favourable product mix shift towards higher-value flipchip packages,” the research house said in a report.
CIMB Research added that it raised its FY26/27/28 earnings per share forecasts by 3%/69%/64%, respectively.
UAT, the group’s wafer-bumping operation, had returned to profitability in June, removing a previous drag on earnings.
A US$15mil equipment upgrade is also under way to raise UAT’s capacity to about 20,000 wafers per month from around 12,000 wafers currently.
For GP2, the research firm said Unisem is looking to secure long-term agreements, customer-consigned equipment and potentially upfront customer funding to reduce the risk of underutilised capacity once the new facility comes onstream.
The expansion will be carried out in two sections. The company has also raised RM467.5mil through the first tranche of its private placement, which is expected to partially fund the GP2 expansion.
“We upgrade our rating to ‘buy’ (from ‘hold’) with a higher RM5.50 target price, based on 37 times FY27 price-to-earnings (PE), which is in line with the Malaysian outsourced semiconductor assembly and test sector’s five-year mean PE.”
An analyst said the semiconductor sector remains on a strong growth trajectory, supported by sustained artificial intelligence- or AI-related demand and ongoing data centre expansion.
He said recent share price weakness offers more attractive upside potential for the stock.
This comes as the group’s 1H26 results came in within expectations, with core net profit surging 171.2% year-on-year to RM19.8mil, driven primarily by higher sales volumes.
He noted that the industrial segment was the key growth driver, with a substantial number of orders linked to power management applications for AI and data centres.
He added ongoing capacity expansion is set to provide a foundation for the group’s future growth.
Shares of Unisem traded at RM4.33 at the time of writing.
