Woofun AI reports that Serenity has upgraded semiconductor wafer foundry XFAB to a "Buy" rating, driven by improving demand from Melexis and emerging opportunities in silicon carbide, gallium nitride, and photonics chips. The firm argues that AI-related demand will counteract automotive sector cyclicality, while XFAB's current 2027 EV/EBITDA of 4.8x remains significantly below the peer median of 14.5x.

Serenity highlights XFAB's leadership in the EU's PhotonixFAB project, which aims to build a European silicon photonics supply chain. Although commercial orders are not yet finalized, the company is positioned to benefit from data center optical communication growth driven by AI leaders like NVIDIA, a long-term value proposition currently underpriced by traditional valuation models.