One world inventory stands proud as a “distinctive play” within the Nvidia and synthetic intelligence provide chain, consistent with Jefferies. It is German semiconductor company SUSS MicroTec , Jefferies stated in a Sept. 17 document, calling it a “hidden gem” amongst Eu semiconductor corporations. The inventory additionally trades over-the-counter within the U.S. The funding financial institution initiated protection of the inventory at a purchase score and a goal value of 76 euros ($84). That represents attainable upside of about 28%. The company has “multi-layered publicity” to a sophisticated packaging era referred to as Chip-on-Wafer-on-Substrate, stated Jefferies, explaining that it is used to make AI chips. SMHN-FF 1Y mountain SUSS MicroTec Nvidia makes use of that era to bundle its AI graphics processing gadgets, Jefferies famous. “Call for for CoWoS has subsequently risen considerably within the final 24 months, as AI adoption has speeded up.” SUSS sells its merchandise to 2 main prime bandwidth reminiscence providers and TSMC, for use within the manufacturing of that complex packaging. TSMC’s greatest CoWoS buyer is Nvidia, consistent with Jefferies. Reminiscence chips were within the highlight as AI ramps up, as they’re utilized in graphics processing gadgets, which underpin maximum generative AI equipment. “SUSS has a couple of layers of CoWoS/NVIDIA publicity,” stated the funding financial institution. The packaging era wanted for the prime bandwidth reminiscence referred to as “brief bonding” gifts the “largest alternative,” with such orders spiking for SUSS within the 3rd quarter of 2023, stated Jefferies. “This section has observed the most powerful uptick in orders since Q3’23, an inflection this is closely connected to fresh enlargement observed around the NVIDIA/AI provide chain,” the financial institution wrote. There’s a “important” want for SUSS’ equipment given prime bandwidth reminiscence’s “multi-layered structure,” as they allow all layers to suit throughout the packaging, the financial institution defined. SUSS has a 55% marketplace proportion within the house, and is “smartly positioned to profit” from two enlargement drivers within the subsequent one to 2 years: emerging CoWoS shipments at TSMC and emerging prime bandwidth reminiscence layer depend, stated Jefferies. For the reason that company’s publicity to the packaging tech wanted for prime bandwidth reminiscence is “completely new,” the potential of upside in orders and revenues is “a lot more subject material” than that of alternative apparatus providers, stated Jefferies. “As well as, we imagine SUSS is among the most enticing CoWoS performs globally because it has a lot decrease pageant right here than its Complex Packaging friends,” the financial institution wrote. Jefferies predicts gross sales of 471 million euros for fiscal yr 2025, implying 16% enlargement yr on yr. — CNBC’s Michael Bloom contributed to this document.
