Taiwan's Hon Precision Inc. has emerged as one of the most closely watched names in the AI supply chain after three heavyweight foreign brokerages delivered outsized price target upgrades, putting the IC test equipment maker on track to become only the third stock on the Taiwan Stock Exchange to break the NT$10,000 barrier — roughly US$310 at current exchange rates.
Three Firms, Three Massive Upgrades
Goldman Sachs more than doubled its target to NT$12,000 from NT$5,700. Morgan Stanley nearly doubled its forecast to NT$10,008 from NT$5,000, while Hong Kong-based Aletheia Capital raised its target to NT$10,000 from NT$6,200. The rare show of confidence followed a recent investor conference at which the company painted a picture of demand running far ahead of supply.
A Factory Purchase That Still Was Not Enough
Orders for its advanced testing machines are so strong that even the purchase of a new factory has failed to close the gap. Hon Precision has now lifted its 2026 capacity expansion plan to 40% from an earlier 30% and is preparing a further 50% increase the following year. Capital expenditure is forecast to grow at a compound annual rate of about 50% through 2028.
The AI Testing Boom Is Not Cooling — It Is Broadening
The bullish outlook challenges any assumption that the AI chip testing boom is cooling. Beyond core testing work, fresh orders are piling up in functional testing (FT), system-level testing (SLT) and co-packaged optics (CPO). Brokerages now expect the company's earnings next year to hit as much as 22 times paid-in capital — a sharp acceleration from already elevated levels.
Taiwan Riding a Global AI Earnings Wave
That momentum mirrors a broader surge across global tech. First-quarter results from S&P 500 companies showed more than 80% beating profit estimates, driving aggregate earnings growth of 27.1%. The wave has lifted technology shares in the US, Japan, Taiwan and South Korea, powering Taiwan's own market higher even as some foreign investors took profits in April.
Hon Precision Leads, but Taiwan's AI Bench Is Deep
Taiwanese firms at the heart of AI infrastructure have delivered particularly strong results and guidance, sparking a fresh round of upward revisions from foreign desks. Hon Precision stood out, but it was not alone. Server slide-rail producers King Slide Works (川湖科技) and Repon — trading as Nan Juen International (南俊國際) — received higher targets from Daiwa-Cathay Securities after their quarterly figures. AI server switch maker Accton Technology (智邦) saw Morgan Stanley lift its target to NT$3,150 following better-than-expected gross margins.
The upgrades underscore how deeply entrenched Taiwan remains in the global AI build-out — and why investors are once again turning bullish on its specialised equipment makers. （Related： Yageo Turns Passive Components into AI Infrastructure Powerhouse ｜ Latest ）
(Adapted from Wealth Invest Weekly, Issue 2405. By Lin Li-hsueh)
