Date: July 24, 2026 Research Perspective: Global PCB full industry chain (upstream CCL → midstream PCB manufacturing → downstream applications) Core Judgment: Cautiously bullish | Confidence: Low-to-medium | Time Horizon: 12 months
This is the first initiation; no previous view to compare.
The Printed Circuit Board (PCB) is the "skeleton" of electronic products—all electronic components achieve electrical interconnection through PCBs. This report covers:
One-sentence industry chain: CCL oligopolists (Shengyi/Kingboard) hold material pricing power; PCB manufacturing is a "large industry with small companies" (global CR10 of only 47%); profits concentrate in AI high-multilayer boards and upstream CCL; traditional consumer electronics PCB yields profits in the squeeze.
According to Prismark's Q1 2026 report, global PCB output value grew from USD 73.6 billion in 2024 to USD 85.2 billion in 2025 (+15.8% YoY), and is expected to reach USD 95.8 billion in 2026 (+12.5%) and USD 123.3 billion by 2030 (2025-2030 CAGR of 7.7%). A key feature is that value growth (+15.8%) far exceeds area growth (+9.3%)—product structure upgrades (increasing share of AI high-multilayer/HDI/IC substrates) drive structural ASP increases.
| Application Area | Share | 2025 Growth Rate | Key Drivers |
|---|---|---|---|
| Servers/Data Storage (incl. AI) | 19.6% | +43.6% | AI training/inference server PCB value surge |
| Consumer Electronics/PC | 19.0% | Low single-digit | Replacement cycle, modest boost from AI PC/phones |
| Mobile Terminals (phones/tablets) | 16.5% | Mid single-digit | AI phone motherboard layer count increase |
| Packaging Substrates (separate) | 14.6% | +20.5% | AI chip advanced packaging (CoWoS/FC-BGA) |
| Automotive Electronics | 11.5% | 4-6% | EV penetration + ADAS/domain controllers |
| Wired Infrastructure (AI networking) | 8.8% | +40.8% | 800G/1.6T switches + optical modules |
| Industrial/Medical/Military | 10.0% | ~8% | Geopolitical-driven military + industrial automation recovery |
Source: Prismark Q1 2026 PCB & Substrate Market Report
The biggest difference in this PCB cycle vs. history is that the demand driver has shifted from "consumer electronics replacement cycles" to "AI computing infrastructure investment cycles." This is not a moderate demand upgrade, but a nonlinear leap in PCB value.
Morgan Stanley's May 2026 BOM teardown of the NVIDIA Rubin VR200 rack provides the clearest quantitative evidence to date:
Goldman Sachs in January 2026 significantly raised AI PCB TAM from USD 9.1 billion in 2025 to USD 26.6 billion in 2027. However, note that this implies a two-year CAGR of 71%, which faces downward revision risk recently (see I7).
Optical module PCBs represent another underestimated increment: Morgan Stanley's June 2026 report shows 1.6T optical module PCB unit price jumps from USD 10/unit in the 400G era to USD 25/unit (mSAP process required), with optical module PCB TAM reaching USD 3.77 billion by 2028.
Automotive Electronics: EV PCB usage per vehicle is 5-6 times that of ICE vehicles (TrendForce), and ADAS HDI PCB unit price is more than 3 times that of conventional boards. The automotive PCB market is expected to grow from USD 9.3 billion in 2024 to USD 12.8 billion in 2028 (CAGR ~6.5%).
Source: Combined estimates from Prismark, Goldman Sachs, Morgan Stanley. Note: AI servers include GPU accelerator cards + switch boards; traditional servers account for x86 platform replacement declines.
In the PC era, PCBs followed PCs; in the smartphone era, PCBs followed smartphones. In the AI era, PCBs are upgrading from "consumer electronics accessories" to "core components of computing infrastructure." AI PCB as a share of global PCB has risen from ~5.5% in 2024 to ~10.7% in 2025, and is heading toward ~20-25% by 2027 (Note: the previously assumed 30.2% share by 2030 implied a global PCB market of USD 219 billion, inconsistent with the industry's 3-5% long-term growth; the actual achievable share is likely in the 18-24% range).
Mainland China (including Taiwanese-invested) is the dominant global PCB production region, collectively accounting for ~67% of global capacity (Prismark/TPCA 2025 data):
| Product Tier | 2024A | 2025A | 2026E |
|---|---|---|---|
| High-end (AI high-multilayer/HDI/IC substrates) | 85-90% | 90-95% | 88-93% |
| Mid-range (standard multilayer 8-16 layer/automotive) | 75-80% | 78-82% | 75-80% |
| Low-end (single/double-sided, 4-6 layer standard) | 65-72% | 65-70% | 60-68% |
Source: CPCA, company disclosures, industry estimates
The PCB industry is undergoing its most intensive technology upgrade period since 2000:
Multilayer → Ultra-high multilayer backplane: AI server PCBs have upgraded from traditional 8-16 layers to 20-30 layers; the NVIDIA Rubin architecture requires 40+ layer ultra-high multilayer backplanes. Only a few manufacturers globally, including SCC, WUS, and TTM, have mass production capability, with yields of 80-85%. NVIDIA's Kyber backplane (70+ layers, matching Rubin Ultra) has reportedly been delayed to 2028 or even canceled (according to Jefferies June 2026 report)—this poses downward revision risk for 2027-2028 AI PCB TAM.
HDI → mSAP: mSAP (Modified Semi-Additive Process) is the standard process for 800G/1.6T optical module PCBs (14-18 layers, M8-grade CCL). SCC is domestically leading, with cases of customers locking in capacity 6-12 months ahead—a "capacity grab" behavior.
IC Substrates: BT → ABF: Global ABF substrate shortage is ~22% (Morgan Stanley May 2026), capacity utilization above 95%, lead time 9-12 months. SCC has achieved mass production of FC-BGA up to 22 layers; Fastprint (Xing Sen) has 8-20 layer mass production yields of 85-90%. The core bottleneck, ABF film, is monopolized by Japan's Ajinomoto with >95% global share; a new factory will break ground only in 2028 and start production in 2032.
Top-tier manufacturers plan total new investments exceeding RMB 50 billion:
| Company | Project | Investment Amount | Commissioning Time |
|---|---|---|---|
| WUS Printed Circuit (Kunshan WUS) | Kunshan high-layer HDI project (2) | RMB 5.5+6.8 billion | 2026-2029 |
| Zhending (Avary) | Huai'an AI server + Shenzhen substrate-like board | RMB 11+10 billion | From 2027 |
| SCC (Shennan Circuits) | Wuxi high-speed high-density + AI computing project | RMB 4.6+4.5 billion | 2027H1 |
| Shengyi Electronics (Shenghong) | 2026 Annual Plan (incl. overseas) | RMB 20 billion | 2026-2028 |
Source: Company announcements
Key Risk: These expansion projects are concentrated in AI/high-end PCB directions. If AI demand growth slows in 2027-2028 (e.g., UBS forecast of cloud CapEx growth plunging from +76% in 2026 to +25% in 2027, only +6% in 2028), we could see a "shortage today, surplus tomorrow" situation.
High-end PCB capacity expansion is constrained by upstream materials, not just plant and equipment:
These bottlenecks mean: Even if a PCB factory builds a production line, it may not get enough qualified materials to run at full capacity.
Source: Prismark Q1 2026 and estimates. Note: 2024-2026 basically balanced (capacity utilization adjustment); 2027-2028 new capacity release leads supply to exceed demand.
Aggregate numbers mask extreme structural divergence—high-end (AI/IC substrate) gap of 15-22%, low-end (standard multilayer) surplus of 10-15%. This is the core of the K-shaped divergence.
PCB pricing follows a three-factor model: "cost-plus + supply-demand gap premium + product structure upgrade":
| Category | 2025A ASP | 2026E ASP | YoY Change | Key Drivers |
|---|---|---|---|---|
| AI high-multilayer board (20L+, M7-M9) | USD 3,200-4,000/m² | USD 3,500-4,500/m² | +8-15% | CCL price pass-through + supply-demand premium |
| HDI board (incl. mSAP) | USD 900-1,400/m² | USD 1,000-1,500/m² | +5-10% | Optical mSAP ramp-up + CCL pass-through |
| Standard multilayer (4-10L, FR-4) | USD 500-750/m² | USD 530-750/m² | 0-5% | CCL cost push but demand constrained |
| FPC | USD 300-600/m² | USD 300-600/m² | Flat | Consumer electronics price pressure |
| IC substrate (ABF FC-BGA) | USD 5,000-8,000/m² | USD 5,500-9,000/m² | +5-15% | ABF film price increase + structural gap |
Source: Combined estimates from Prismark, Caixin Securities, industry surveys. PCBs are non-standard; ASPs are indicative category averages.
| Period | AI High-Multilayer Board | Standard Multilayer Board | Core Logic |
|---|---|---|---|
| Q3 2026 | USD 3,500-4,500/m² | USD 550-750/m² | Full pass-through of 20-30% CCL price hikes; Rubin peak loading |
| Q4 2026 | USD 3,600-4,600/m² | USD 530-720/m² | High-end continues +2-3%; consumer electronics off-season softens mid-low end |
| Q1 2027 | USD 3,700-4,700/m² | USD 510-700/m² | CCL continues +10-15% pass-through; non-AI season pressure |
| Q2 2027 | USD 3,800-4,800/m² | USD 500-680/m² | New capacity trial production; high-end gap narrows to ~15%; price increase slows to +1-2% |
Pricing Framework: The incentive price for AI high-multilayer boards (steady-state price delivering >15% ROE for top players) is approximately USD 4,000-6,000/m². Supply-demand gaps provide premium, while CCL price increases provide a cost floor. Standard multilayer boards have a marginal cost floor of USD 500-800/m² but lack upside elasticity.
Current AI PCB customer lead times have extended to over 26 weeks, while downstream inventories are only 4-6 weeks (below the normal 6-8 weeks), showing classic active restocking characteristics. However, the NCAB Mid-2026 Report reveals a neglected signal: approximately 20% of order growth comes from price effects, and another ~20% from pre-buying/stockpiling—meaning actual end-demand growth may be only 10-15%. Once restocking completes, order growth may sharply decelerate. The over-ordering in 2021 → inventory correction in 2022-2023 (industry-wide output -15%) is still fresh in memory.
PCB Manufacturing: Global CR5 ~30%, CR10 ~47% (Prismark 2023 data)—a typical fragmented manufacturing industry. (Note: In the top 10 share chart, "Others" includes many small and medium-sized manufacturers not listed separately; the top 5 total ~30% consistent with the CR5 metric.)
High-end segment concentration far exceeds the industry average—ABF substrate CR5 >80% (Unimicron/Ibiden/Shinko Electric/Kinsus/Nanya PCB), HVLP copper foil Mitsui global share >90%, ABF film Ajinomoto global share >95%. This means AI PCB core material segments are controlled by very few suppliers.
Source: Prismark/NTI-100. Zhending data includes PZDT (002938.SZ).
Current Profit Distribution (estimated based on 2025 data):
| Industry Chain Link | Global Market Size | Top Player Gross Margin | Profit Trend | One-Liner |
|---|---|---|---|---|
| Upstream CCL | ~USD 15 billion | Shengyi 26.5%/Kingboard 19.6% | Expanding | Best duopoly structure; 5 consecutive price hikes capture the largest profit elasticity in the chain |
| Midstream AI PCB | ~USD 9.1 billion (incl. AI server + networking) | Shenghong 35.2%/WUS 35.5% | Expanding | Supply shortage enjoys premium; capacity utilization 92%+ |
| Midstream Traditional PCB | ~USD 50 billion | 15-20% | Under pressure | Overcapacity + downstream price pressure; revenue growth without profit growth |
| IC Substrate | ~USD 12 billion | 35-40% (ABF) | Expanding | ABF gap 22%; domestic substitution window opening |
| Downstream Assembly | — | — | Stable | PCB accounts for 1-5% of device cost; not calculated separately |
Source: 2025 annual reports, Prismark
Profit Migration Directions (next 2-3 years):
Return Quality Conclusion: PCB manufacturing overall return quality is medium, but internal divergence is sharp. True cash-earning segments: AI high-multilayer boards (Shenghong ROE 33.8%, cash/earnings ratio 107%), high-speed communication boards (WUS ROE 28.4%), CCL leaders (Shengyi ROE 21.1%). Revenue-without-profit growth illusion: traditional consumer electronics FPC (Dongshan Precision revenue RMB 40.1 billion but net profit only RMB 1.4 billion, ROE only 6.9%), low-end multilayer board SMEs (gross margin 10-15%, net margin <5%).
| Company | Ticker | 2025 Revenue | Main Track | Gross Margin | ROE | Competitive Advantage | AI Purity |
|---|---|---|---|---|---|---|---|
| Shenghong (Victory Giant) | 300476 | RMB 19.3 billion | AI server HDI/high-multilayer | 35.2% | 33.8% | NVIDIA OAM module PCB market share ~95% | ★★★★★ |
| WUS Printed Circuit (Kunshan WUS) | 002463 | RMB 19.0 billion | High-speed communication/servers/automotive | 35.5% | 28.4% | One of the purest AI server PCB plays | ★★★★★ |
| Shennan Circuits (SCC) | 002916 | RMB 23.7 billion | Communication + IC substrate + AI PCB | 28.3% | 20.6% | Only domestic producer with mass-produced FC-BGA substrate | ★★★★ |
| Shengyi Electronics | 688183 | RMB 9.5 billion | AI server high-multilayer/HDI | 31.2%→35.2% | — | Direct CCL supply from Shengyi Technology + tied to cloud service providers | ★★★★ |
| Shengyi Technology | 600183 | RMB 28.4 billion | Upstream CCL + PCB (subsidiary) | 26.5% | 21.1% | Global #2 CCL, positioned in M9 materials | ★★★ (indirect beneficiary) |
| PZDT (Avary) | 002938 | RMB 35.1 billion | FPC/HDI/SLP | ~22-24% | — | Global largest PCB manufacturer by revenue, core Apple supplier | ★★ |
| Jingwang (Kinwong) | 603228 | RMB 15.3 billion | Multi-category general/automotive | 21.6% | 10.1% | Diversified clients counter-cyclical, Thailand capacity | ★★ |
| Dongshan Precision | 002384 | RMB 40.1 billion | FPC + rigid board | 14.1% | 6.9% | Global #2 FPC, but thin margins | ★ |
| Fastprint (Xing Sen) | 002436 | ~RMB 10 billion | IC substrate + prototype | ~25-28% | — | Scarce FC-BGA domestic substitution target | ★★★ (substrate) |
| Kingboard Laminates | 1888.HK | HKD 20.4 billion | Upstream CCL + electronic yarn/cloth/copper foil | 19.6% | — | Global #1 CCL + vertical integration | ★★★ (indirect beneficiary) |
Source: 2025 annual reports. AI purity is a subjective composite assessment.
The Shenwan Printed Circuit Board Index (850822.SI) currently stands at:
This implies that current valuations have already priced in extremely high earnings growth expectations. Historically, whenever the PE ratio has been above the 90th percentile, sector returns over the subsequent three years have been mostly negative or extremely low. Even if earnings quadruple (+300%) from 2026-2028, the 2028 forward PE would still be around 19x — not cheap for a cyclical manufacturing industry. Valuation is the biggest risk factor for PCB investment right now, not the sustainability of AI demand.
The Ministry of Industry and Information Technology (MIIT)'s "Standard Conditions for the Printed Circuit Board Industry" (2025 Edition, Draft for Comments) sets three hard standards: capacity control, R&D investment (≥3% of revenue and ≥10 million yuan), and green production, strictly limiting low-level expansion and encouraging specialization and innovation. The "Guidance Catalogue for Industrial Structure Adjustment (2024 Edition)" classifies HDI boards, IC substrates, and rigid-flex boards as encouraged categories. The policy direction is clear: eliminate small and medium low-end capacity that fails to meet environmental standards, and concentrate resources on developing high-end PCBs.
On the environmental front: the "Discharge Standard of Water Pollutants for Electronics Industry" (GB 39731-2020) was fully implemented in 2024, with wastewater treatment costs accounting for 15-20% of manufacturing costs. Jiangxi Province took the lead in including bisphenol A and benzotriazole in its key controlled new pollutant list — this raises industry entry barriers, accelerates the exit of small and medium capacity, and benefits leading companies that are already compliant.
Driven by US-China trade frictions and cross-strait geopolitical risks, PCB capacity is accelerating its shift from mainland China to Thailand, Vietnam, and Malaysia. Thailand's BOI offers extremely favorable conditions, including 8-year corporate income tax exemptions and customs duty exemptions on equipment. From 2023-2024, it has already received 95 PCB investment projects (total investment of 162 billion baht). Zhen Ding Technology has invested over 65 billion baht in Thailand. By 2026, PCB production value in Thailand, Vietnam, and Malaysia is expected to reach $13.4 billion (about 13% of global share). However, in the short term, yield ramp-up and customer certification for new Southeast Asian capacity will take time, limiting the impact on global supply before 2027.
The US Section 301 tariff exemption for PCB components has been extended to November 10, 2026, but uncertainty remains high after expiration. Cross-strait geopolitical risk is the biggest "gray rhino" for the PCB industry — Taiwan concentrates approximately 30%+ of global PCB capacity (Zhen Ding is world No.1, Unimicron, etc.) and 90% of advanced chip manufacturing. A conflict escalation would have catastrophic consequences for the global electronics supply chain. This directly drives the "Taiwan+1" strategy.
Overall Direction: Policy is slightly bullish. AI PCB domestic substitution and capacity migration are two definitive themes. The biggest tail risks come from cross-strait tensions and US tariff policy.
Bullish side: The PCB value per unit for NVIDIA's Rubin/Ultra platform jumps 233-500%, and the AI PCB TAM grows from $9.1 billion in 2025 to $26.6 billion in 2027 (Goldman Sachs). Cloud providers' 2026 capex guidance is extremely strong. AI inference demand is still in its early stages, with huge long-term potential.
Bearish side: 1) Jefferies confirmed in June 2026 that NVIDIA's Kyber backplane PCB has been delayed to 2028 or even canceled, cutting 2027/2028 AI PCB TAM by 5%/11% respectively; 2) UBS predicts that the capex growth rate of the four major cloud providers will plummet from +76% in 2026 to +25% in 2027 and only +6% in 2028; 3) NCAB data reveals that ~20% of orders are pre-buying, with actual end-user demand growth potentially only 10-15%; 4) North American PCB orders showed signs of softening in Q1 2026 (Custer Contexo Group).
Tracking indicators: Quarterly capex guidance from the four major cloud providers, NVIDIA GPU shipments, and monthly PCB order growth (TPCA/CPCA data).
Current balance: Slightly bullish, but bearish evidence is accumulating. 2H 2026 is a key verification period — if North American orders continue to weaken, the balance will tip towards bearish.
Bullish side: ABF substrate gap at 22%, HVLP copper foil gap at 48%, ABF film monopolized by Ajinomoto with no large new capacity before 2032. Shennan/Wus printed circuit board (PCB) AI order backlog extends to end-2026, with capacity utilization above 95%. High-end material bottlenecks are hard constraints that cannot be resolved in the short term.
Bearish side: 1) Three leading Chinese PCB companies announced over 40 billion yuan in new investments in 2026, all targeting AI/high-end PCBs; 2) Samsung and SK Hynix have already requested substrate price cuts in 2H 2026 (Digitimes, July 2026); 3) If AI demand growth slows (Debate 1), the concentrated supply release will lead to localized oversupply in 2H 2027-2028.
Tracking indicators: ABF substrate lead times and price changes, Ajinomoto ABF film capacity expansion progress, actual production ramp-up of new capacity at Wus/ Shennan/ Zhen Ding.
Current balance: Neutral to slightly bullish (shortage is certain in 2026, inflection risk increases in 2027).
Bullish side: Earnings growth for AI PCB-related companies is staggering (Shengyi Technology's 2025 net profit attributable to parent +274%, ShengYi Electronics +344%). High growth rates can absorb high valuations. Although PE is high, if earnings double, forward PE falls to a reasonable range.
Bearish side: 1) PE of 75.65x is at the 93rd percentile; historically, every time PE reaches such extreme levels, sector returns over the next 3 years have been mostly negative; 2) BofA's July 2026 fund survey showed 82% of fund managers consider semiconductors/hardware the most crowded trade, with no one shorting — a classic contrarian indicator; 3) ShengYi Electronics' DCF fair value is only 67.5 yuan vs market price 117.9 yuan (75% premium); even the purest AI beneficiary is already valued above intrinsic value; 4) The semiconductor index has already fallen 20% from its high as of July 2026, valuation compression has begun.
Tracking indicators: PCB sector PE percentile changes, whether quarterly earnings growth meets expectations, sector fund flows.
Current balance: Slightly bearish. Even if earnings meet expectations, a mean reversion from the 93rd percentile to the 75th percentile (about 40x PE) would imply a stock price decline of approximately 47%. If earnings also miss, downside is even larger.
| Scenario | Probability | Core Assumptions | Industry Implications |
|---|---|---|---|
| Bear | 25% | AI capex growth drops to <20% by 2027, Kyber canceled, concentrated high-end capacity expansion leads to oversupply in 2H 2027, copper price crashes | AI high-multi-layer ASP drops to $2,500-3,000/m²; sector PE compresses from 75x to 30-40x, stock prices fall 40-60% |
| Base | 55% | AI demand maintains 30-50% growth, high-end gap narrows slowly from 2027, CCL price hikes pass through quarterly, valuations remain elevated | AI high-multi-layer ASP $3,500-4,800/m²; sector earnings continue to grow rapidly but PE gradually compresses to 50-60x |
| Bull | 20% | AI inference demand explodes (e.g., massive ASIC ramp-up), material bottlenecks persist, domestic substitution accelerates, cloud capex continues to beat expectations | AI high-multi-layer ASP $4,500-6,000/m²; sector earnings beat expectations driving passive PE compression, double-win scenario |
| Date/Window | Event | Direction Impact | Related Debate |
|---|---|---|---|
| Jul-Aug 2026 | Four major cloud providers Q2 earnings + capex guidance update | Determines AI demand expectations | Debate 1 |
| Aug 2026 | PCB sector interim reports disclosed intensively (Shengyi Tech/ Wus/ Shennan, etc.) | Verifies if Q2 earnings growth materializes | Debate 3 |
| Sep 2026 | NVIDIA GTC 2026 (Rubin Ultra roadmap) | Kyber progress and AI PCB value update | Debate 1 |
| Oct-Nov 2026 | US Section 301 tariff exemption expires (Nov 10, 2026) | If not renewed, pressures export-oriented companies | Geopolitical risk |
| Q4 2026 | Shennan Circuit Wuxi project trial production, Zhen Ding Huai'an project progress | New capacity release pace | Debate 2 |
| Q1 2027 | Ajinomoto ABF film expansion progress update | Material bottleneck easing signal | Debate 2 |
| Q1 2027 | Four major cloud providers' 2027 capex guidance | Largest annual catalyst | Debate 1 |
Matrix Interpretation:
Value Trap Logic: Bullish industry outlook ≠ worth buying. DSBJ ranks among global top three in revenue, but its FPC track is dominated by a downstream giant customer (Apple) with extreme pricing power, resulting in a gross margin of only 14.1% and net margin below 3.5%. Even if the PCB industry is in an upcycle, such targets cannot convert industry dividends into shareholder returns.
Beneficiary Targets (ranked by logic strength):
Avoid/Cautious Targets:
| Scenario | Most Benefited | Most Hurt | Logic |
|---|---|---|---|
| Bear | Shengyi Technology (600183), Kingboard Laminates | Shengyi Technology (300476), Wus Printed Circuit | CCL has cost floor + dividend support; AI high-purity stocks face earnings and valuation double-kill |
| Base | Shengyi Technology (300476), Wus Printed Circuit, Shennan Circuits | DSBJ, low-end manufacturers | AI continues to drive high-end prosperity; traditional PCB remains pressured |
| Bull | Shengyi Technology (300476), Wus Printed Circuit, ShengYi Electronics | — | AI demand explosion, high-end capacity fully utilized, double-win scenario |
Disclaimer: This report is based on public information and industry research, and does not constitute investment advice. The PCB sector is currently at historically extreme valuation levels; investors need to fully understand the downside risks.