A latest Jefferies report highlights SUSS MicroTec, a German semiconductor firm, as a “unique play” in the Nvidia and synthetic intelligence (AI) provide chain. Described as a “hidden gem,” the agency is gaining consideration amongst European tech firms.
Growth Potential and Coverage
Jefferies has initiated protection of SUSS MicroTec with a purchase suggestion and a worth goal of 76 euros ($84). This signifies a potential 28% enhance in the inventory’s worth.
Key Technology for AI
SUSS MicroTec has direct publicity to a complicated know-how known as Chip-on-Wafer-on-Substrate (CoWoS). This know-how is utilized in the manufacturing of synthetic intelligence chips. Nvidia makes use of CoWoS to bundle its graphics processing models (GPUs) that energy AI instruments.
Demand for CoWoS has grown considerably over the previous 24 months, pushed by the growth of AI, in accordance to the Jefferies report.
Important Clients in the Supply Chain
SUSS MicroTec provides its merchandise to main high-bandwidth reminiscence producers and TSMC. TSMC makes use of the know-how to produce superior packaging for its chips, with Nvidia being its largest buyer on this space, the report mentioned.
Memory chips play a vital position in AI, as they’re important for graphics and knowledge processing in superior generative AI instruments.
Opportunities in the Temporary Union Market
Jefferies highlights that certainly one of the greatest alternatives for SUSS is in “time-binding” know-how, which is utilized in the manufacturing of high-bandwidth reminiscence. Orders for this know-how elevated considerably in the third quarter of 2023.
This enhance is immediately associated to the latest development in Nvidia’s provide chain and AI, making SUSS a key participant on this rising market.
Strong Demand for Specialized Tools
The multi-layer structure of high-bandwidth reminiscence requires specialised instruments. SUSS options allow these layers to be built-in inside superior packaging. According to Jefferies, the firm controls 55% of the market on this section, giving it a robust place to profit from the anticipated development in the coming years.
Future Perspectives
Jefferies expects SUSS MicroTec gross sales to attain €471 million by 2025, representing a 16% year-over-year development. The agency is nicely positioned to benefit from rising CoWoS shipments from TSMC and development in demand for high-bandwidth reminiscence.
In conclusion, SUSS MicroTec presents itself as certainly one of the most promising firms in the superior packaging marketplace for AI, with much less competitors than different world gamers.
