Jefferies has begun coverage of SUSS MicroTec SE (SMHN: GR), a key player in the semiconductor equipment industry, assigning a Buy rating and setting a price target at €76.00.
SUSS MicroTec, recognized for its role in the supply chain of NVIDIA (NASDAQ:NVDA) and AI technologies, is highlighted for its significant exposure to the Chip-on-Wafer-on-Substrate (CoWoS) process, which accounts for approximately 30% of its sales.
The analyst from Jefferies pointed out that the demand in the High Bandwidth (NASDAQ:BAND) Memory (HBM) segment for Temporary Bonders is expected to be a major growth opportunity for the company.
Additionally, the growth in Photomask Cleaning is closely linked to the shipments of Extreme Ultraviolet (EUV) lithography systems from ASML (AS:ASML), one of the leaders in the semiconductor industry. The potential for further expansion through localization efforts was also noted.
Jefferies' forecast for SUSS MicroTec's earnings per share (EPS) for fiscal years 2025 and 2026 stands at 12% and 15% above consensus, respectively.
The optimistic outlook is based on the belief that the current 18% discount in the company's valuation, compared to its peers, is likely to diminish as the market gains a better understanding of SUSS MicroTec's growth trajectory.
SUSS MicroTec's position within this supply chain and its potential for further expansion could make it an attractive prospect for investors seeking exposure to this market segment, noted Jefferies analyst.
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