UWC's FY27 earnings poised to grow 60pct on wafer fabrication equipment boom
KUALA LUMPUR: UWC Bhd is poised to benefit from capacity expansion across its customer base as the outlook for wafer fabrication equipment (WFE) continues to strengthen, Hong Leong Investment Bank Bhd (HLIB) said.
KUALA LUMPUR: UWC Bhd is set to experience a 60% year-on-year increase in earnings for the fiscal year 2027 (FY27), according to Hong Leong Investment Bank Bhd (HLIB). The bank attributes this growth to a surge in capacity expansion within UWC's customer base, driven by the strengthening outlook for wafer fabrication equipment (WFE) spending.
Industry projections indicate that WFE spending will reach US$140 billion to US$150 billion in 2023 and US$190 billion to US$200 billion in 2027, fueled by persistent investments in memory and leading-edge logic. This growth translates to tangible capacity expansion for UWC's customers, with one firm constructing a second facility in Kulim, Malaysia, slated for completion in 2027, and another doubling its cleanroom footprint in Singapore.
Additionally, UWC has secured a new WFE customer with exposure to several niche segments. HLIB anticipates a further upside in FY28 earnings, primarily driven by increased activity from key customers. UWC reported core earnings of RM34.9 million for the fourth quarter, totaling RM106.8 million for FY26, which exceeded expectations by 110%.
HLIB maintains a Buy rating on UWC's stock with a target price of RM7.70, citing the company's growing exposure to the front-end segment, which positions it to benefit from the ongoing WFE capital expenditure upcycle.
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