Episil Technologies Inc. (3707) AI Stock Analysis

Episil Technologies Inc.

(TPEx:3707)

Select Model

Rating:38Underperform

Price Target:TWD 48.00▼(-20.27% Downside)

Action:initiatedcoverage

Date:11/09/26

Episil Technologies scores near the bottom of the range. The dominant factor is a severe cyclical trough in its foundry operations: negative gross margin, a second consecutive year of widening net losses, and a fourth straight year of negative free cash flow as aggressive capital spending runs far ahead of near-collapsed operating cash flow. Technicals reinforce the caution, with the share price well below all major moving averages and a deeply negative MACD, although oversold RSI and stochastic readings suggest selling may be extended in the short term. Valuation provides no cushion given negative earnings and no dividend. The main mitigating factor is a conservative balance sheet - low 0.30 debt-to-equity, ongoing debt reduction and still-positive EBITDA - which buys time for a recovery, but until revenue and margins inflect the overall risk profile remains elevated.

Positive Factors

Specialized Semiconductor PositionEpitaxial wafer manufacturing is a specialized position within the semiconductor supply chain, where quality requirements can support customer relevance. Its focus on power-device applications and processing services provides a defined business niche that may remain strategically important over the next several quarters.

Negative Factors

Severe Profitability DeteriorationThe shift from prior profits to sizeable losses, culminating in negative gross profit in 2025, indicates that current pricing and cost economics are not supporting the business. Persistent margin weakness can erode equity, restrict reinvestment, and make earnings recovery dependent on a meaningful operating improvement.

Episil Technologies Inc. (3707) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 24.27B
Dividend Yield: ―
Average Volume (3M): 10.04M
Price to Earnings (P/E): -51.0
Beta (1Y): 1.71
Revenue Growth: 22.70%
EPS Growth: 38.31%
Country: TW
Employees: 1,340
Sector: General
Sector Strength: 55
Industry: Semiconductors

Episil Technologies Inc. Business Overview & Revenue Model

Company Description

Episil Technologies Inc. is primarily involved in the research, development, production, and worldwide sales of advanced semiconductor products, including epitaxial wafers, silicon wafers, mixed-signal integrated circuits, and linear integrated circu...

Episil Technologies Inc. Financial Statement Overview

Summary

The weakest part of the story. Revenue has fallen three years running and sits roughly 35% below the 2022 peak, gross margin has collapsed from 19.5% to negative 3.3% (product is being sold below cost), and the net loss widened to about NT$757 million for a -13.1% net margin and -10.7% ROE. Cash generation is the most acute issue: operating cash flow nearly evaporated to about NT$20 million while heavy capex drove free cash flow to roughly negative NT$1.57 billion, the fourth consecutive year of negative FCF. The one genuine offset is a conservatively financed balance sheet - debt cut to NT$2.16 billion, debt-to-equity of just 0.30, and equity funding over half of assets - plus still-positive EBITDA, indicating losses are largely depreciation-driven. That cushion is shrinking, however, as accumulated losses erode equity.

Income Statement

19Very Negative

Balance Sheet

61Positive

Cash Flow

16Very Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Mar 2023	Dec 2021
Income Statement
Total Revenue	6.43B	5.77B	5.82B	7.08B	8.88B	7.27B
Gross Profit	220.51M	-190.45M	42.10M	809.48M	1.74B	989.92M
EBITDA	501.75M	142.70M	387.69M	931.25M	1.96B	1.17B
Net Income	-591.58M	-757.49M	-525.29M	67.07M	821.00M	232.03M
Balance Sheet
Total Assets	14.84B	12.88B	13.91B	11.79B	12.85B	9.88B
Cash, Cash Equivalents and Short-Term Investments	4.11B	4.02B	5.71B	3.53B	4.73B	2.80B
Total Debt	1.96B	2.16B	2.61B	2.31B	2.23B	1.33B
Total Liabilities	3.67B	3.71B	4.29B	4.22B	4.86B	3.51B
Stockholders Equity	8.72B	7.10B	7.52B	5.53B	5.77B	4.47B
Cash Flow
Free Cash Flow	-1.09B	-1.57B	-1.07B	-705.39M	562.73M	691.67M
Operating Cash Flow	393.88M	20.11M	336.12M	760.38M	1.72B	1.02B
Investing Cash Flow	-831.91M	-1.40B	-907.56M	-1.44B	-752.38M	-713.55M
Financing Cash Flow	145.06M	-158.39M	2.58B	-519.07M	1.36B	511.28M

Episil Technologies Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:3707 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:8131	65Neutral	TWD 23.84B	13.29	―	1.86%	37.20%	416.69%
TW:8086	63Neutral	TWD 19.63B	18.62	―	1.68%	38.98%	147.17%
TW:3265	58Neutral	TWD 21.46B	22.56	―	2.60%	15.38%	34.04%
TW:2329	56Neutral	TWD 24.47B	14.80	―	2.68%	10.61%	51.02%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:8110	51Neutral	TWD 18.96B	10.01	―	4.00%	11.36%	213.16%
TW:3707	38Underperform	TWD 24.11B	-51.01	―	―	22.70%	38.31%

* General Sector Average

Performance Comparison

TW:3707 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:3707	Episil Technologies Inc.	60.20	9.80	19.44%
TW:2329	Orient Semiconductor Electronics, Limited	37.30	-14.60	-28.13%
TW:3265	Winstek Semiconductor Co. Ltd.	157.50	60.56	62.46%
TW:8086	Advanced Wireless Semiconductor Co.	99.90	-15.43	-13.38%
TW:8110	Walton Advanced Engineering, Inc.	37.35	-3.52	-8.62%
TW:8131	Formosa Advanced Technologies Co., Ltd.	53.90	6.24	13.10%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Nov 09, 2026

Episil Technologies Inc. AI Stock Analysis