Core Viewpoint - The PCB (Printed Circuit Board) industry is undergoing significant structural changes driven by the explosive growth of artificial intelligence (AI) technology, with increasing demand for AI servers, computing infrastructure, terminal AI applications, and automotive intelligence pushing the market towards high-end and refined products [2]. Market Drivers: High-End Products as Growth Core - High-layer multilayer boards (18 layers and above) and HDI boards are the main drivers of growth, with a projected year-on-year increase of 40.3% and 18.8% respectively in 2024, significantly outpacing the overall industry growth [3]. - The global PCB industry is expected to have a compound annual growth rate (CAGR) of 5.2% from 2024 to 2029, while the CAGR for high-layer multilayer boards and HDI boards will reach 15.7% and 6.4% respectively, indicating a strong growth in high-end products [3]. Application Areas: Fastest Growing Segments - The server/storage segment is the fastest-growing market, with a projected year-on-year growth rate of 33.1% in PCB and substrate output in 2024, far exceeding the overall industry growth of 5.8% [8]. - From 2024 to 2029, the CAGR for PCB output in the server/storage sector is expected to be 11.6%, indicating sustained leadership in this segment [8]. Technological Evolution: Breakthroughs in Low Loss and High Density - The technical challenges in AI PCBs focus on material systems and manufacturing processes, with advancements in materials such as M9 materials for lower dielectric constant and loss, and HVLP5 copper foil to reduce skin effect [12]. - High-end PCBs are increasingly adopting mSAP and SAP processes for finer line widths and spacing, with high-layer stacking and back-drilling technology becoming standard to optimize signal integrity [12]. Industry Landscape: Domestic Capacity Dominates but Lacks Strength - China accounts for 58% of global PCB capacity, leading the world, but the capacity structure shows a "large but not strong" characteristic, with severe competition in low-end products and insufficient supply of high-end products [12]. - The domestic production rate for high-layer multilayer boards required for AI servers is only 30%, indicating significant room for domestic replacement and high-end upgrades [12]. Leading Enterprises Accelerating High-End Layout and Overseas Expansion - Major domestic companies like Pengding Holdings, Huadian Co., and Shenzhen South Circuit are expanding high-layer and HDI capacity in regions like Huai'an, Wuxi, and Shenzhen [14]. - To enhance supply chain resilience and be closer to overseas clients, companies are establishing operations in Thailand, Vietnam, Malaysia, Europe, and North America through new factories and mergers [16]. Deep Participation of Domestic Enterprises in Overseas Supply Chains - Domestic companies have formed a complete supporting capability in the supply chains of international giants like NVIDIA, AMD, Intel, and Apple, with firms like Huadian Co. and Pengding Holdings involved in PCB production [18]. Summary and Outlook - AI technology is the core driving force reshaping the PCB industry, with a clear direction towards high-end, refined, and highly reliable products [19]. - The focus of competition is shifting from "scale expansion" to "technological breakthroughs" and "global delivery capabilities," with companies that can bind closely with overseas AI giants and achieve high-end product mass production expected to occupy core positions in the upcoming industrial upgrade wave [19].

Core Viewpoint - The PCB industry is experiencing significant growth driven by increasing demand for HDI products, particularly due to advancements in AI server technology and substantial capital investments from major tech companies [3][7]. Market Trends - The HDI market is projected to grow at a compound annual growth rate (CAGR) of 6.4% from 2024 to 2029, reaching a global market size of $17.037 billion by 2029 [3]. - Major companies like Google are increasing their capital expenditures, with a reported $22.446 billion for Q2 2025, marking a 30.5% quarter-over-quarter increase and a 70.2% year-over-year increase [3]. Company Performance - Shengyi Technology (生益电子) reported a 91% year-over-year increase in revenue for the first half of 2025, reaching 3.769 billion yuan, and a 452% increase in net profit to 531 million yuan [3]. Technological Developments - The PCB industry is evolving towards high-frequency, lightweight, and lead-free technologies, with CoWoP (Chip-on-Wafer-on-Panel) becoming a focal point for innovation [5][9]. - CoWoP technology requires Low-CTE (Coefficient of Thermal Expansion) materials to ensure compatibility with high-precision applications, leading to a focus on specialized materials and advanced manufacturing processes [9]. Key Drivers of Demand - The demand for PCBs is primarily driven by two segments: high-performance GPUs led by Nvidia and custom ASIC chips developed by cloud service providers like Google and Amazon [7][8]. - The shift towards custom ASICs is aimed at optimizing workloads and reducing reliance on external suppliers, which is expected to further increase PCB demand [8]. Advanced Packaging and Materials - CoWoP technology transforms PCBs from mere connectors to high-precision "inner substrates," necessitating advanced materials and manufacturing techniques [9]. - The introduction of HVLP (High-Voltage Low-Power) copper foil is essential for high-speed signal transmission, with surface roughness controlled to minimize signal loss [12][13]. Resin Innovations - The industry is moving away from traditional epoxy resins due to high dielectric loss, favoring advanced resin systems like PPO, PTFE, and CH, which offer better electrical performance [14].