Summary of PCB Micro Drill Industry Conference Call Industry Overview - The AI server micro drill market is dominated by Jingzhou Precision and Dingtai High-Tech, which together hold approximately 80% market share [1][3] - The development of the PCB micro drill industry is primarily driven by the rapid growth of AI servers, which demand higher material specifications and board thickness [2] Key Players - **Jingzhou Precision**: Serves customers in the Pearl River Delta, including companies like Shenghong, Fangzheng, and Jingwang [3] - **Dingtai High-Tech**: Primarily serves Taiwanese companies such as Taiwan Huachong and Shanghai APP [4] Equipment and Production - The Romantique equipment is crucial for producing high-precision micro drills, with a maximum quarterly production of 100 units and a lead time of one year from order to operation [1][5] - Romantique equipment outperforms self-developed equipment in production efficiency, especially for high-end micro drills used in AI servers, achieving daily outputs of 4,000-5,000 units compared to 2,500-3,000 units for self-developed equipment [1][6] Pricing and Market Dynamics - High aspect ratio micro drills are significantly more expensive than standard micro drills, with prices for GP300 around 3 yuan and upgraded Ruby V2,200 potentially reaching 7-10 yuan [1][8] - The current market is a seller's market with intense resource competition, limiting the potential for cost reductions in advanced products [8] Supply Chain and Material Costs - The rising price of tungsten steel affects mid-to-low-end products significantly, while high-end AI server products are less impacted due to lower tungsten steel content (approximately 30%) [3][20] - The competition in the overseas market mainly comes from Japan, but its market share is relatively small, posing minimal threat to the domestic market [21] Profitability and Future Outlook - The gross profit margin for main drills is higher (60%-70%) compared to sub-drills (30%-40%), with potential for overall margin improvement through product upgrades [3][19] - Jingzhou's higher profit in the first half of the year compared to Jingtai is attributed to a greater focus on high-value AI server products, which are expected to account for 20% of AI business revenue by mid-2026 and 30% by year-end [23] Additional Insights - The complexity and thickness of PCB materials are increasing, leading to a significant rise in demand for micro drills [2] - The consumption of main and sub-drills is critical for cost management, with the need for more sub-drills as board thickness increases [16][18] - There are no significant improvements expected in the production capacity of existing equipment, which is already at its limit [12]