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Stock Markets May 13, 2026 09:27 AM

MPI Q1 Gross Margin Surpasses Estimates as MEMS Revenue Strengthens

Higher-margin VPC sales, led by MEMS probe cards, push gross margin to 59.4%; analyst meeting set for Friday to address capacity and qualification updates

By Derek Hwang

MPI reported preliminary first-quarter results showing a 59.4% gross margin, well above both Goldman Sachs' 54.3% estimate and consensus of 56.0%. The margin expanded 5.7 percentage points from the prior quarter, driven by stronger revenue from the company's VPC business, where MEMS probe cards are said to account for more than half of sales and carry higher margins. First-quarter EPS was reported at NT$12.5, helped by larger non-operating gains. MPI will hold an analyst meeting on Friday to provide updates on MEMS capacity expansion, qualification progress on testing services, and opportunities in server-related applications.

MPI Q1 Gross Margin Surpasses Estimates as MEMS Revenue Strengthens

Key Points

  • MPI reported a first-quarter gross margin of 59.4%, exceeding Goldman Sachs' 54.3% estimate and the 56.0% consensus.
  • Margin expansion of 5.7 percentage points was driven by stronger VPC revenue, with MEMS probe cards estimated to be more than half of VPC sales and carrying higher margins.
  • MPI recorded first-quarter EPS of NT$12.5, aided by higher non-operating gains; an analyst meeting on Friday will address MEMS capacity expansion, server-related application opportunities, and testing qualification updates.

MPI on Wednesday released preliminary figures for the first quarter showing a notable improvement in profitability. The company recorded a gross margin of 59.4%, topping Goldman Sachs' 54.3% estimate and the 56.0% consensus.

The quarter-over-quarter margin gain amounted to 5.7 percentage points. Company commentary and analyst interpretation point to a shift in revenue mix toward MPI's VPC business as the primary driver. Within VPC, MEMS-based products, particularly MEMS probe cards, were highlighted by Goldman Sachs as contributing disproportionately to the margin expansion. Goldman Sachs estimates that MEMS probe cards represented more than half of VPC revenue in the quarter and that these probe cards carry substantially higher gross margins than the firm's other VPC solutions.

Reported first-quarter earnings per share were NT$12.5. The EPS beat was attributed in part to elevated non-operating gains rather than operating margin alone.

MPI is scheduled to brief analysts on Friday. According to Goldman Sachs, topics expected to be discussed include updates on MEMS capacity expansion, where potential upside could materialize toward the fourth quarter. That upside would be supported if multiple MEMS projects enter mass production in the second half of 2026 and the first half of 2027, as noted by Goldman Sachs.

In addition to capacity, the analyst meeting is expected to touch on product and market diversification. Company commentary and analyst expectations point to potential opportunities in server-related applications beyond AI ASICs, which could gain from rising inference demand. MPI is also targeting testing services in EIC/PIC and die-level testing for CPO applications, and attendees will look for qualification progress on those fronts.

Goldman Sachs has maintained a Buy rating on MPI following the preliminary results and ahead of the analyst meeting. The coming presentation is likely to be closely watched for clarity on production timelines, qualification milestones, and the sustainability of the higher-margin revenue mix.

Risks

  • Capacity expansion for MEMS may not deliver the anticipated upside timing or scale; investors will watch updates at the analyst meeting.
  • Qualification timelines for EIC/PIC testing and die-level testing for CPO applications remain uncertain and will be clarified only if MPI provides updates at the analyst meeting.
  • The EPS beat was partly supported by higher non-operating gains, indicating that operating performance alone may not fully explain the earnings surprise.

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