Finn Stockinger
Equity Analyst & Investor, Technology Research
X-FAB is not a strong long-term investment because legacy automotive drag and high operating costs are too heavy for a big pivot or soaring profits in the next few years. It is a relatively stable, revenue-generating company, but it rarely delivers anything groundbreaking. It works only as a short-term swing trade, riding occasional hype or liquidity pumps such as @aleabitoreddit's interest. x.com
X-FAB is too early to own because its photonics pivot lacks hard evidence. Its roadmap looks like a bid to become Europe's Tower Semiconductor, with Nvidia using its SOI platform via the photonixFAB consortium, 200mm thin-film lithium niobate and Microsystems revenue above $100M. But @MoodyWriter13 notes about 96% of business is automotive, with essentially no AI data center link and a photonics story years away, and @MarkosAAIG reports a bad experience waiting for it to deliver. x.com x.com x.com
X-FAB is a mediocre foundry trading at more than 70 times forward earnings while making bottom-of-the-barrel gross margins and burning cash for almost its entire history. Traders buying it for Nvidia exposure could own Nvidia itself at 20 times earnings. x.com
X-FAB's celebrated AI capacity expansion means very little for shareholders today: no new revenue, no new customer and no meaningful earnings before 2029. It is merely the formal handover of a €127 million subsidy approved in late 2025, a normal 30-40% rate, and X-FAB must still fund most of the investment. The cleanroom will not produce until late 2028 and mainly serves its legacy automotive, smartphone and medical markets, making it one of the least exciting AI-linked stocks fundamentally. … Show more
X-FAB is a good name because 800V demand is booming for its traditional CMOS business, not because of CPO, which is too small and far from taking off. It can shift capacity from unprofitable automotive to profitable cloud-provider work, and its silicon carbide also targets 800V. It is a rare fab with products at about 1.5x book, cheap because past profits were weak; earnings should improve as Chinese foundry costs have doubled. A 2–2.5x book multiple looks achievable, but not a 5–10x return. … Show more
X-FAB still has a lot to prove because its execution has consistently been poor, despite promising technology. Management targeted about €300 million of silicon carbide revenue by 2026 and delivered essentially nothing, with most of that business going to Infineon. Its new photonics story, led by a €48 million EU consortium with NVIDIA as a partner, makes headlines, but NVIDIA has no obligation to become a customer. It stays on the watch list until actual execution under the new CEO. x.com
X-FAB Silicon Foundries' exposure to co-packaged optics and 800V power is now confirmed, but it is a 2028 patience trade rather than a near-term catalyst. Per @aleabitoreddit's earnings-call recap, X-FAB said it is making progress in CPO and expects the 800V transition to support SiC and GaN demand. Photonics volume production and the new Erfurt fab both land at the end of 2028, and wide-bandgap revenue dipped 30% quarter on quarter on one customer's timing. x.com
X-FAB looks quite undervalued, with 2x potential in the short term, as a Bernstein upgrade and new CHIPS Act funding arrive. Bernstein upgraded it to Outperform and raised its target to €12.8 from €5, leaving about 38% upside from roughly €9.3. Per @aleabitoreddit, X-FAB receives €127.4 million under the CHIPS Act for its Fab4Micro MEMS foundry in Erfurt, with production planned for 2028. x.com x.com
X-FAB's earnings confirmed direct exposure to co-packaged optics and the 800V shift, which should drive a re-rating as markets price growth ahead. Management said it is progressing in CPO, with three silicon photonics projects and photonics volume production expected in 2028, a timeline not in revenue models yet. The 800V transition supports SiC and GaN demand, with three new SiC data center design wins pointing to a 2027 ramp. Current revenue is unimpressive, so some waiting is needed. x.com … Show more
