CCBI raises ASMPT target 52 percent on record AI chip demand

ASMPT’s leadership in the specialized equipment required for assembling AI chips prompted a significant forecast upgrade from CCBI analysts.

A new report from CCBI analysts boosted the target price for semiconductor equipment supplier ASMPT Ltd. (00522.HK) by 52 percent to HKD 190, arguing the company’s dominance in advanced packaging technology positions it as a key beneficiary of the artificial intelligence boom. The upgrade reflects a sharp increase in expected earnings, driven by record-high orders in the first quarter of 2026.

"As one of the leading semiconductor packaging equipment suppliers with strong AP capabilities, ASMPT represents a solid long-term investment, especially as AP plays an increasingly critical role in IC miniaturization," the broker stated in its report, maintaining an "Outperform" rating on the stock.

The bank’s conviction is supported by a significant upward revision to its financial models. CCBI raised its adjusted net profit forecasts for ASMPT for fiscal years 2026 and 2027 by 39 percent and 10 percent, respectively. The new HKD 190 target, up from HKD 125, is based on lifting the target price-to-book multiple from 3.0x to 4.6x, signaling strong confidence in the company's growth trajectory and market position.

This bullish outlook is not just about a single company but underscores a critical shift in the semiconductor industry. As demand for complex AI chips from hyperscalers accelerates, the method of assembling and connecting these chips—known as advanced packaging—is becoming a primary driver of performance and value, benefiting specialized equipment makers like ASMPT.

TCB: The Bonding Behind the AI Boom

At the heart of CCBI’s thesis is ASMPT's leading position in advanced packaging equipment, particularly in Thermo-Compression Bonding (TCB). TCB is a crucial process for manufacturing the high-bandwidth memory (HBM) that is essential for AI accelerators, enabling faster data transfer and processing. The growing importance of this technology is a sector-wide tailwind, with competitors like Kulicke and Soffa (NASDAQ:KLIC) also projecting approximately 70 percent growth for their TCB business in fiscal 2026, according to company statements.

ASMPT's strategic focus on this back-end packaging segment allows it to capitalize on the increasing complexity of chip design. As traditional Moore's Law scaling slows, chipmakers are turning to innovative packaging techniques to continue improving performance, a trend that directly fuels demand for ASMPT's high-precision equipment.

A Sector-Wide Surge

The forces lifting ASMPT are elevating the entire semiconductor equipment industry. According to a recent industry report from Zacks, the electronics and semiconductors sector has appreciated 115.9 percent over the past year, vastly outperforming the S&P 500’s 33.2 percent gain, largely due to the proliferation of AI.

Peers are seeing similar momentum. Lam Research (NASDAQ:LRCX) recently reported a 23.8 percent year-on-year revenue increase and issued surprisingly strong guidance, with its CEO citing "escalating AI compute needs" as a primary driver. Similarly, KLA Corporation (NASDAQ:KLAC) saw its advanced packaging segment grow 70 percent year-over-year in fiscal 2025, demonstrating the widespread demand for these next-generation manufacturing solutions.

For investors, CCBI's report frames ASMPT as a pivotal player in the ongoing AI infrastructure build-out. While the sector trades at high valuations—with companies like KLA commanding a trailing P/E ratio of 51—the sustained, multi-year demand for AI-related equipment provides a strong argument for continued growth. The significant forecast revisions and valuation multiple expansion for ASMPT suggest that, in the eyes of some analysts, the market is still catching up to the long-term earnings power generated by the AI revolution.

This article is for informational purposes only and does not constitute investment advice.