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Citi Lowers Alchip Target Price to NT$6,000 While Maintaining Buy Rating
Electronic Technology · Semiconductors · economic_daily · 2026-11-09
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Citi has cut its target price for Alchip-KY to NT$6,000, citing macroeconomic uncertainties, while Morgan Stanley remains optimistic about new HPC client wins.
What Happened
Target Price Revision: Citi has lowered its target price for Alchip-KY from NT$6,800 to NT$6,000, though it maintains a "Buy" rating. The adjustment reflects concerns over macroeconomic headwinds and AI policy uncertainty, while Morgan Stanley keeps its "Overweight" rating and NT$5,888 target.
Operational Challenges: Citi highlights that as Alchip scales, it faces increased working capital requirements and complex payment terms. The company's ability to manage its financial resources and fund large-scale wafer procurement will be critical to its future profitability.
Growth Prospects: Despite financial hurdles, Citi remains confident in Alchip's long-term growth, driven by the acceleration of N3 projects. The company's role as the sole physical design partner for N2 projects further solidifies its competitive position and revenue visibility through 2027.
New Client Wins: Morgan Stanley noted that a key highlight from the recent earnings call was Alchip securing a second major US-based HPC client. This partnership is expected to begin contributing to revenue by the second quarter of 2027, bolstering the company's long-term growth outlook.