Core Viewpoint - The PCB industry is in a golden era, with the drilling equipment market being a standout segment driven by strong demand from AI computing and steady growth in the server market [4][13]. PCB Industry - The PCB industry is experiencing a significant boom, with 42 listed PCB companies in mainland China achieving a total revenue exceeding 120 billion yuan in the first half of the year, reflecting a year-on-year growth of at least 25-30% [4]. - The industry is at the beginning of a prosperous cycle, with strong demand expected to continue for at least the next three years [4]. Products and Orders - The company manufactures three main products: ordinary mechanical drilling machines (approximately 500,000 yuan), high-end CCD back drilling machines (1.6-1.8 million yuan), and forming machines (450,000-500,000 yuan) [5]. - The company has shipped over 1,800 units from January to August 2025, a year-on-year increase of about three times, with current orders reaching approximately 800 units, extending delivery times to March 2026 [5][6]. Profit and Pricing - The gross margin for ordinary mechanical drilling machines is around 30-40%, while for CCD back drilling machines, it can reach 70-80% or higher [7]. - The pricing strategy is strong, requiring a 30% deposit, 30% upon shipment, and 40% after installation [7]. Supply Chain Challenges - Capacity constraints are a primary bottleneck, with the factory operating at full capacity and plans for a second phase of construction to meet demand [8]. - Key components, particularly spindles, are in short supply, with the company relying on two main suppliers [8]. Technology Aspects - The demand for high-density interconnect (HDI) boards driven by AI requires high precision in drilling equipment [9]. - CCD back drilling machines offer superior accuracy compared to ordinary drilling machines, making them essential for complex drilling processes [9]. Competitive Landscape - The PCB drilling equipment market is dominated by companies like Germany's Schmoll, Japan's Hitachi, and China's Dazhu CNC [10]. - Domestic and Taiwanese manufacturers are positioned to capitalize on the current demand surge due to their quick response capabilities [10]. Downstream and Global Trends - Downstream demand is primarily driven by AI computing and server needs, with major clients including Nvidia, Microsoft, Amazon, and Huawei [11]. - The shift of PCB manufacturers to Southeast Asia due to tariffs presents opportunities for domestic and Taiwanese equipment suppliers [11]. Equipment Lifespan and Production Line Configuration - The lifespan of the company's products is estimated at 10-15 years, while competitors like Dazhu CNC have a shorter lifespan of 5-8 years [12]. - A high-end HDI production line typically requires five mechanical drills for every back drill [12]. Future Outlook - The PCB drilling equipment industry is expected to enter a golden three-year period, with increasing demand driven by AI computing [13]. - The rapid expansion of leading manufacturers is anticipated to extend to smaller firms, further amplifying market demand [13].

Summary of PCB Drilling Equipment Industry Conference Call Industry Overview - The conference focuses on the PCB drilling equipment industry, highlighting the significant growth and demand for drilling machines and related equipment in recent years [2][5][38]. Company Profile - The company specializes in manufacturing and selling CCD back drilling machines, conventional mechanical drilling machines, and forming machines, with a notable increase in drilling machine business [3][5]. - The production bases are located in Jiangsu Huai'an and Nanjing, with the headquarters in Taiwan. The current monthly production capacity is approximately 400 units, totaling an annual capacity of around 4,000 units [6][9]. Key Products and Sales - The product mix includes forming machines (40% of new orders), CCD back drilling machines (30%), and conventional mechanical drilling machines (30%) [8]. - The pricing for the products is as follows: conventional mechanical drill at approximately 500,000 RMB, CCD back drill priced between 1.6 to 1.8 million RMB, and forming machines priced between 450,000 to 500,000 RMB [8]. Order and Delivery Status - As of August 2025, the company has shipped over 1,800 units, with a backlog of approximately 800 units, and delivery dates extended to March 2026 [7][9]. - Major clients include Taiwanese enterprises such as Hushi, Pengding, and state-owned enterprises like Shenwan and Jingwang [7]. Industry Dynamics - The PCB industry is experiencing a positive outlook, with aggressive expansion from companies like Jianding and Pengding, which have ordered 600 and approximately 3,000 drilling machines, respectively [5][19]. - The demand for high-end HDI (High-Density Interconnect) boards is increasing, driven by the need for precision in positioning and depth control, leading to significant equipment investments [29][30]. Supply Chain Challenges - The main constraint on delivery is insufficient production capacity, compounded by shortages of key components such as spindles, which are primarily supplied by Haozhi and Xifeng [9][10]. - Spindle costs account for about 1/5 to 1/8 of the drilling equipment's total cost, with each drilling machine requiring six spindles [11]. Technological Aspects - The company emphasizes the importance of the CNC system for machine precision, developed by a team led by a Tsinghua University PhD [12][17]. - Linear motors are crucial for spindle positioning and sensitivity, with suppliers including Mitsubishi and Fuji [18]. Market Trends and Future Outlook - The PCB industry is expected to maintain a favorable growth trajectory, with a projected increase in demand from major companies like Nvidia, Microsoft, and Amazon [21][38]. - The current industry cycle is anticipated to last at least three years, with many leading manufacturers already booked into 2026 [45]. Competitive Landscape - Domestic and Taiwanese equipment manufacturers are gaining a competitive edge due to shorter delivery times compared to foreign suppliers, who may have lead times of one to two years [46]. - The market is characterized by a mix of aggressive expansion from local firms and a more conservative approach from foreign companies, which focus on quality and stability rather than rapid scaling [44]. Conclusion - The PCB drilling equipment industry is poised for significant growth, driven by technological advancements and increasing demand for high-precision products. The company is well-positioned to capitalize on these trends, despite facing supply chain challenges.