Provisional Injunction Against MPI Confirms MEMS Probe Card Technology Competitiveness; No Material Financial Impact Expected

Core Conclusion

Technoprobe's provisional injunction in Taiwan targeting MPI's probe products does not threaten the company's operations or financial standing. MPI's counter-lawsuit in the US District Court for the Eastern District of Texas, combined with its assertion of distinct manufacturing technology, signals confidence in its intellectual property position. The legal event validates the technical progress MPI has made in MEMS-based probe cards, a segment forecast to contribute at least 93% year-over-year revenue growth in 2026e. The Overweight rating and NT$5,800 target price are unchanged.

Evidence Chain

Legal actions and MPI's response
Technoprobe filed a provisional injunction with Taiwan's Intellectual Property and Commercial Court, alleging MPI infringed Taiwan Patent No. I705249 and seeking to block manufacturing, sales, and use of probe products under model series MW90, MW120, and MW130. MPI countered on April 17, 2026, by initiating a patent infringement action in the US District Court for the Eastern District of Texas, asserting Technoprobe infringed two of its US patents.

Technology differentiation
MPI states its manufacturing and production technology is fundamentally different from both Formfactor and Technoprobe. The company routinely engages third-party validation during R&D, a practice that substantiates its claim of independent development. MPI expects zero operational disruption and no material financial effect from the proceedings.

Commercial validation
MEMS probe card revenue is projected to grow at least 93% year-over-year in 2026e. This trajectory reflects market acceptance of MPI's technology and reinforces why a competitor would seek to challenge it through injunctive relief—the dispute itself underscores MPI's growing competitive presence in a high-growth segment.

Key Risks

• Escalation of legal scope: The current provisional injunction targets specific probe model series in Taiwan. If Technoprobe expands to additional jurisdictions or obtains a broader injunction, MPI could face temporary supply constraints or increased legal expense. The "temporary status quo" nature of the current order limits immediate disruption, but the risk is non-zero.
• Operational distraction: Even without near-term financial impact, litigation diverts management attention from R&D and customer engagement, potentially slowing market share gains.
• Demand-side risk: Slower AI-driven semiconductor testing demand or delays in customer adoption of MEMS probe cards could weaken the revenue growth that underpins the current valuation.
• Valuation downside factors: As noted in the model, slower-than-expected AI demand, slower market share gains from peers, and slower co-packaged optics (CPO) development are the primary downside risks.

Valuation and Trade Implication

The price target of NT$5,800 is derived from a residual income model with 9.78% cost of equity, 75% payout ratio, 15% medium-term growth, and 4% terminal growth. This implies 44x 2027e P/E and 24x 2028e P/E. At the current close of NT$5,025, the upside is roughly 15%.

Earnings trajectory supports this multiple: ModelWare EPS is estimated at NT$64 for 2026e, rising to NT$133 in 2027e and NT$240 in 2028e. The legal event does not alter the fundamental growth case; if the market overreacts with a sell-off, it would present a tactical entry point.

The MEMS probe card opportunity is the primary catalyst. With 93% YoY growth implied and strong AI-linked demand for advanced testing, MPI's revenue base should expand from NT$13.4bn in 2025 to NT$61.7bn by 2028e. The injunction, while a headline risk, does not change this trajectory and instead provides external confirmation of MPI's technological relevance in a contested space.

Appendix: Key Financial Estimates