GlobalWafers (6488) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw gradual semiconductor market recovery, driven by AI, HPC, and broader end-market applications, with inventory correction largely complete but recovery still uneven.

• Q1 2026 revenue was NT$13,985 million, down 3.6% sequentially and 10.3% year-over-year, with gross margin at 20.8%.

• Expansion projects are moving from investment to ramp-up and qualification, with operational focus shifting to realizing returns.

• Government subsidies from the US and Europe exceeded TWD 11 billion, strengthening the balance sheet and financial flexibility.

• Long-term agreements with customers are increasing, reflecting improved demand visibility and deeper collaboration.

Financial highlights

• Q1 2026 revenue was TWD 13.98 billion, down 3.57% quarter-over-quarter; gross profit was TWD 2.91 billion, with a gross margin of 20.8%.

• Operating margin was 10.5%, net margin 13.6%, with net margin up year-over-year due to Siltronic share valuation gains.

• EPS was TWD 3.97, nearly TWD 1 higher year-over-year.

• EBITDA for Q1 2026 was NT$4,060 million, with a margin of 29.0%.

• Prepayment balance at TWD 23.5 billion, down 5.5% QoQ, reflecting fulfillment of long-term agreements.

Outlook and guidance

• Full-year 2026 operating performance expected to improve sequentially and exceed 2025 levels on a constant currency basis.

• Industry recovery is broadening beyond AI, with growth expected to continue into 2027, though momentum will vary by segment.

• CapEx has peaked; focus is now on ramp-up, yield improvement, and operational efficiency.

• Pricing improvement is anticipated in the second half of 2026, especially for 12-inch wafers, due to high utilization and rising costs.

• AI infrastructure investment is expected to offset near-term macro headwinds and support long-term demand.