The requirements for PCB materials, signal transmission, and thermal management have significantly increased due to AI servers, leading to higher product prices and added value.According to Zhang Yuansong, an analyst at the Industrial Technology Research Institute in Taiwan, major mobile board manufacturers like Zhen Ding and Wistron previously had gross margins below 20%. This was primarily due to the maturity of the mobile market, intense price competition, and limited profit margins.In contrast, Jinchang Electric, which focuses on AI servers, has seen its gross margin exceed 30% in the first half of this year (up from 26% in the same period last year), reflecting an upgrade in product structure towards high-end AI boards, successfully escaping the fierce competition of low to mid-margin products, with overall profits rising accordingly.Zhang believes that AI servers are transforming the entire industry structure, stating, “Before 2020, many thought PCBs were entering a sunset industry, but now we are entering a new era of brilliance. Next year, PCB output value may surpass that of 2022, setting a new record!”T-Glass is a type of reinforced glass fiber cloth that features advantages such as “low thermal expansion, minimal deformation,” and “low signal loss,” allowing circuit boards to remain stable and accurate during high-speed operations. It is a key material for producing high-end PCBs. Additionally, T-Glass is a niche market with high gross margins and technical barriers, currently dominated by Nitto Denko and PPG, which hold over 80% of the global T-Glass market share.Notably, some Taiwanese manufacturers, such as Taiwan Glass, have already achieved mass production and supply capabilities for T-Glass, becoming one of the few non-Japanese and non-American companies to enter the AI packaging material supply chain, which holds significant strategic value.According to TrendForce, the demand for high-end glass fiber cloth has surged due to AI servers and other high-frequency applications, but production capacity has not kept pace with demand. As a result, price increases began in August, with the highest increase reaching 20%, and the price of the highest specification T-Glass climbing to $80 to $100 per kilogram.The increased requirements for board components driven by AI servers are pushing the entire supply chain to upgrade. Taiwanese manufacturers are competitive in materials, processes, and delivery times, but they still face pressure from reliance on imported key raw materials.On the upstream materials side, Taiwan Glass is one of the few suppliers of T-Glass and is expanding its capacity for low dielectric materials; Jinchang is focusing on HVLP high-end copper foil, targeting the high-speed and automotive markets; and Nanya has integrated capabilities for glass fiber cloth, copper foil, and resin.In the CCL manufacturing sector, companies like Taiyo and Unimicron are optimizing their product mix due to material upgrades and the introduction of AI applications, with analysts optimistic about their growth momentum.On the downstream side, major ABF substrate manufacturers such as Nan Ya, Xinxing, and Jingzhu supply products for CPUs, GPUs, and AI accelerators. Among them, Nan Ya is seen as the biggest beneficiary of the price increase cycle due to its high proportion of non-long-term contracts.Returning to the upstream side, key materials like T-Glass are still controlled by large companies in Japan and the United States, making it difficult to alleviate the current supply-demand imbalance in the short term, which may limit the future expansion and growth of Taiwanese manufacturers.However, as domestic manufacturers accelerate material research and vertical integration, such as Taiwan Glass investing in T-Glass expansion and Nanya mastering various raw material technologies, there remains an opportunity to break the dependency on materials and enhance self-supply capabilities if they can successfully pass international customer certifications in the future. (Excerpted from today’s PCB and foreign media)
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