UBS Equities-APAC Technology _Taiwan Tech Oct sales Tracking slightly ah...-118877439

ab14 November 2025Global ResearchAPAC TechnologyTaiwan Tech Oct sales: Tracking slightly ahead for Q4 as tech exports stay strongOctober sales in-line with seasonal but pacing slightly ahead for Q425In this report, we summarize October monthly sales across 169 Taiwan tech companies and analyze 50 covered companies against our/street expectations. October monthly sales were in-line with seasonal at +1.5% MoM and the seven-year average +0.6% MoM even following an above-seasonal September month +19.9% MoM. Hardware sales slightly lagged semiconductors at -1% MoM versus semiconductors +5% MoM. Overall QTD sales for Taiwan Tech are tracking in line with both UBSe/Street at 34.9% and seasonal consensus of 34.2%. Among all our covered tech companies, 19 are tracking above, 11 in line and 20 below. Most sectors are tracking in-line including foundry, packaging & testing, hardware, smartphones, and automation, with only IC design above, while display is behind.Hardware: AI servers guided to accelerate, but PCs weakening into year-endThe UBS Taiwan hardware coverage was flat MoM in Oct, +18% YoY to NT$1,860bn and 34.9% of consensus estimates. Key trends include 1) rack shipments slightly delayed near-term by data center readiness at 26k in 2025, but ramping to 60k in 2026 (Figure 9UBS sumary of Blackwel and Rubin hardware asembly: 26k/60k racks in 2025-26), 2) general server slightly down from a high 9M25 base, 3) notebook sales light in Oct and softer for Q425 (lowering from -5% QoQ to -6% QoQ), and 5) substrates passing through a 2nd price hike that should flow through in Q126 after only in-line results. Delta led growth +47% YoY, ODMs were led by Wiwynn and Hon Hai, while Quanta and Compal were light. Semiconductors tracking ahead, led by TSMC/UMC/Mediatek and the back-endThe UBS Taiwan semis from Sunny Lin saw October sales +6% MoM and +13% YoY to NT$569.8bn, tracking ahead QTD at 36% of UBS/consensus for +2-3% QoQ growth. Foundry sales were up +10% MoM while up +17% YoY, tracking ahead at 35%/36% of UBS/street. TSMC, UMC, PSMC and Win Semi are ahead, while Nanya Tech and GPTC are in line, and Vanguard and Gudeng are behind vs. consensus. Back-end sales were flat MoM and up +9% YoY, tracking ahead at 35% of both UBS/consensus estimates. Strength is coming from continued strong AI demand and mild upside to iPhone builds. For IC design, sales were in line at -6% MoM and flat YoY, reaching +35%/34% of UBSe/street, with Mediatek, Asmedia, and GUC ahead, ASpeed, Novatek, and Elan in line, and Realtek, Silergy, Parade, Andes, Alchip, and Faraday behind.Tone positive into year-end, backed by aggressive CSPs and AI nativesAlthough our Taiwan coverage universe valuation remains elevated at 22.4x/19.0x forward P/E for 2025-26E vs. average 12-15x levels for the TAIEX, the strong capex outlooks from the CSPs (+74%/+30% YoY in 2025-26) support supply chain momentum continuing in Q4 and 2026. Next catalysts include the off-calendar earnings from compute