2026 PCB Industry Outlook: Material Availability Equals Computing Power

1. Overall Conclusion: 2026 Will Be a “Material Shortage Year”; Material Availability Equals Computing Power

• Core Viewpoint: Driven by AI, the supply and demand for upstream materials in the PCB industry chain (copper foil, drill bits, glass cloth) is tight, and prices are expected to rise.

• Key Logic: Explosive demand for computing power → Increased demand for high-end PCBs → Insufficient supply of upstream materials → Price increase cycle begins.

2. Upstream PCB Materials: Tight Supply and Demand + Capacity Expansion + Price Increase

1. Copper Foil (HVLP4)

• Monthly Demand: Revised to over 3,000 tons (original assumption of yield 80-90%, actual only 50-60%).

• Supply: Capacity expansion is slow, with only 1,200–1,300 tons of monthly capacity in 2026.

• Processing Fees: Price increases have begun, with companies like Mitsui, Furukawa, Jincheng, and Luxembourg raising prices by 2 USD/kg in Q4 2025.

• Shortfall: The supply-demand gap for 2026 is about 25%, expanding to 42% in 2027.

2. Drill Bits

• Demand: Increased usage due to the rise in PCB layers (AI servers reaching 40-50 layers).

• Supply: Expansion is slower than PCB manufacturers, with continued shortages expected in 2026-2027.

• Main Manufacturers: Sharp Point, Ding Tai High-Tech, Zhong Tung High-Tech, You Neng.

• Sharp Point’s Plan: Expansion to 40 million units/month by 2026.

3. Glass Cloth (Fiberglass Cloth)

• Demand: 15 million meters/month for first-generation cloth, 2.5 million meters/month for second-generation cloth, and 1 million meters/month for third-generation cloth/quartz cloth in 2026.

• Supply: Low Dk glass cloth capacity is about 10 million meters/month in 2026, with a shortfall.

• Price: Expected to rise, with Taiwanese Fu Qiao, Chinese Hong He, and Guang Yuan as stock sources.

3. Midstream PCB Manufacturing: High-End Capacity Tightens, Overseas Capacity Takes Priority

1. Tight Capacity

• High-end PCB capacity will be tight in 2026-2027, with limited supply chain capacity.

2. Overseas Layout Becomes Key

• Ding Ying, Jing Cheng Ke, Jin Xiang Dian: Leading in overseas capacity layout, securing large orders for ASIC/GPU.

• Other Manufacturers: TTM, ISU, Sheng Hong, Xin Xing, Zhen Ding, Hua Tong, etc., are also expanding in Thailand, Malaysia, Vietnam, and other locations.

3. Supply Chain Restructuring

• Traditional First-Tier Manufacturers (Zhen Ding, Xin Xing, Hua Tong) are temporarily lagging in the AI thick board field.

• Emerging First-Tier Manufacturers: Sheng Hong, Jin Xiang Dian, Ding Ying, ISU, Gao Ji, etc., are rising due to rapid technology transformation and advantages in overseas capacity.

4. Downstream PCB Customers: Demand Continues to Be Revised Upward, Actively Securing Materials

1. AWS

• Order visibility extends to H1 2026, with potential demand for 4 million TR3 units (2026-2027).

2. Google

• Combined chip demand for TPU v6/v7 is 3.5-4 million units, with main PCB manufacturers being Jing Cheng Ke and Ding Ying (joining in H2 2026).

3. Nvidia

• Estimated shipments for GB200/GB300 in 2025-2026 are 23K/34K, with Rubin series production in H2 2026 and ramp-up in 2027.

4. Others

• Meta, Microsoft, OpenAI, etc., are also driving ASIC demand, leading to upgrades in PCBs and materials.

5. Key Material and Technology Trends

1. CCL Material Upgrades

• M8.5~M9: Used for 224G/1.6T transmission, requiring Low Dk/DF materials.

• Quartz Cloth: High performance but difficult to process, currently non-essential, mainly used for Nvidia Rubin’s intermediary boards.

• Main Suppliers: Taiwan Optoelectronics, Sheng Yi Technology, Doosan have passed Nvidia NPR certification.

2. Switch Materials

• 800G/1.6T drives material upgrades from M7 to M8–M9, with price increases of over 60%.

• Main Customers: Cisco, Arista, Celestica, Accton, etc.

6. Investment Recommendations and Stock Focus

1. Recommended Stocks

• 8358 Jin Ju (HVLP Copper Foil)

• 8021 Sharp Point (Drill Bits)

• 1815 Fu Qiao (Glass Cloth)

• 6274 Tai Yao (CCL)

• 3715 Ding Ying (PCB)

• 2368 Jin Xiang Dian (PCB)

• 5439 Gao Ji (PCB)

2. Profit Estimates

• Most companies are expected to see significant EPS growth in 2026, such as:

• Jin Xiang Dian: 29.3 NTD

• Gao Ji: 26.4 NTD

• Jin Ju: 14.4 NTD

• Tai Optoelectronics: 55.5 NTD

7. Policies and Market Environment

1. U.S. Policies

• OBBBA Act: Tax reductions, accelerated depreciation, and R&D expense capitalization to encourage AI investment.

• AAAP Plan: Accelerates AI infrastructure approvals and promotes sovereign AI development.

2. Cloud Vendor Capital Expenditure

• 2025 CSP capital expenditure is expected to grow by 67% (including Amazon at 54%), with a 43% increase in 2026.

3. Server Shipments

• Global server shipments are expected to grow YoY by 7-8% in 2026, with a CAGR of 4% from 2024-2029.

8. Conclusion: Three Main Lines of the PCB Industry in 2026

1. Upstream Materials: The supply-demand gap for HVLP4 copper foil, drill bits, and Low Dk glass cloth is widening, with a continuing price increase cycle.

2. Midstream Manufacturing: High-end capacity is tight, and manufacturers with overseas layouts will prioritize orders.

3. Downstream Demand: AI servers and switches are driving specification upgrades, leading to simultaneous increases in volume and price for materials and PCB manufacturers.