Investment Rating - The report maintains a "Buy" rating on GCE, EMC, and TUC, with target prices revised upwards to NT$420, NT$1,080, and NT$330 respectively, reflecting a 13-28% upward revision in earnings estimates for 2026-2027 [12][20][76]. Core Insights - The AI server CCL/PCB total addressable market (TAM) is projected to grow significantly, reaching US$2.3 billion for CCL and US$5.3 billion for PCB in 2025, and expanding to US$8 billion and US$17.4 billion by 2027, indicating a compound annual growth rate (CAGR) of 88% and 80% respectively from 2024 to 2027 [14][25][33]. - The demand for high-end technology is expected to increase, benefiting first-tier suppliers like GCE, EMC, and TUC, as they are likely to maintain high utilization rates and improve their product mix due to the inability of first-tier suppliers to meet solid client demand [2][32][40]. - The report anticipates that the market share of EMC and TUC in the ASIC AI server CCL market will rise from 42% in 2024 to 85% by 2027, driven by proactive capacity expansion and increasing M8 grade CCL penetration [3][37][40]. Summary by Sections AI Server Market Outlook - The overall AI server CCL TAM is expected to account for approximately 71% of EMC's total revenue in 2025, increasing to 230% by 2027, while for GCE, the AI server PCB TAM will represent 230% of its total revenue in 2025 and 500% in 2027 [2][32]. - The report highlights that the ASIC AI server CCL/PCB TAM is projected to reach US$3.8 billion and US$9.1 billion in 2027, with GCE and EMC expected to gain significant market share [37][46]. Pricing and Profitability - There is a favorable outlook for average selling price (ASP) expansion for Taiwan CCL/PCB suppliers, with expectations of ASP increases of 19%, 11%, and 10% for GCE, EMC, and TUC respectively from 2024 to 2027 [8][64]. - The gross margins (GM) for GCE, EMC, and TUC are projected to improve significantly, with ASIC AI server average GM expected to be over 45% compared to the companies' average levels [63][74]. Capacity and Supply Dynamics - The report notes that the high-end CCL industry is expected to grow at a CAGR of 40% from 2024 to 2027, driven by increasing demand for M7+ grade CCL, while capacity expansion for high-end CCL is only expected to increase by 21% during the same period, leading to a supply-demand gap [15][26][58]. - The tightening supply conditions for high-end CCL and high layer count PCB are anticipated to lead to longer lead times and potential pricing hikes, benefiting key players in the industry [54][57].

Group 1 - The core viewpoint is that the computing power industry maintains high prosperity around investment opportunities in the Nvidia chain and ASIC chain [1] - The domestic PCB/CCL industry leaders are expected to benefit from the tight supply-demand situation in high-end capacity, indicating strong sustainability and high certainty in performance growth [1] - Companies positioned to capture core customer technology upgrade cycles and those with collaborative development capabilities are expected to continue to benefit deeply [1]