Full Text
1. AI-Driven PCB Equipment Industry Trend Background
· AI Industry Chain Transmission Logic：The application scenarios of AI terminals drive the transmission of the industry chain. In November 2022, the emergence of ChatGPT increased the demand for computing power. In mid-July 2023, NVIDIA’s performance showed a turning point, leading to improved profits and equipment procurement. Starting in 2024, companies like Shenghong and others will see performance changes that transmit to the upstream equipment sector, involving companies like DingTai High-Tech and Dazhu CNC. Shenghong Technology’s revenue from AI-related products is rapidly increasing, accounting for about 10% for the whole year of 2024, reaching 42% in the first quarter of 2025, and 50% in the first half of the year. The market recognizes Shenghong Technology in 2025, with its performance being released seasonally.
· Equipment Investment Cycle Assessment：Based on the expansion situation of PCB downstream, the expansion will last at least until 2027. The maximum elasticity phase for equipment investment is in the first half, with investment logic being clear before the first half of 2026.
2. Breakdown of the PCB Industry Chain and Equipment Segment
· PCB Manufacturing Process and Equipment Distribution：The PCB manufacturing process can be divided into three major stages: inner layer precision processing, outer layer precision processing, and subsequent precision processing. Inner layer precision processing includes cutting, inner layer circuit, lamination, drilling, etc.: the cutting stage cuts copper-clad boards into smaller sizes, corresponding equipment is the cutting machine, accounting for about 2% of the value; the inner layer circuit stage transfers the circuit diagram to the substrate using an exposure machine, the value of the exposure machine accounts for 14% of the entire line, mainly used in inner layer circuits, outer layer circuits, and solder mask printing stages, with laser imaging technology becoming mainstream due to its quality, efficiency, and digital advantages; the lamination stage uses a vacuum press to bond multilayer boards, forming multilayer boards; the drilling stage drills holes in the PCB board, corresponding equipment is the drilling machine, which has the highest value proportion (about 20%). Mechanical drilling is suitable for large diameter and deep aspect ratio through-hole processing, while laser drilling is used for small diameter blind/buried hole processing, with differentiated scenarios. Outer layer precision processing includes de-soldering and copper deposition, electroplating, etc.: de-soldering and copper deposition remove residue from the hole walls and deposit thin copper to make the hole walls conductive; the electroplating stage uses electroplating equipment to thicken the thin copper for electrical conduction, with the value of electroplating equipment accounting for about 10%. Testing equipment runs through the entire PCB manufacturing process (testing is required after drilling, electroplating, exposure, etc.), accounting for about 12% of the value. Overall, the ratio of equipment investment to PCB output value is about 1:2 to 1:4 (producing 100 million PCBs requires about 50 million in equipment investment).
· Domestic Substitution Logic for Equipment：The AI-driven PCB expansion has threefold impacts on equipment: first, in terms of demand, the urgent need for AI PCB expansion leads to a high increase in equipment procurement orders; second, in terms of price, AI PCBs mainly focus on high-end capacities such as high multilayer and HDI, with process upgrades like thicker boards and smaller hole diameters driving the increase in high-value equipment proportion, thus improving overall equipment gross margins; third, in terms of domestic substitution, leading PCB manufacturers that previously preferred imported equipment are now facing cautious expansion from foreign equipment manufacturers, resulting in a capacity gap, allowing domestic equipment manufacturers to achieve domestic substitution in high-end equipment fields.
· Equipment Demand Space Estimation：Based on the expansion plans of leading PCB manufacturers, 2026 and 2027 will be concentrated production periods, with the latest data showing that leading manufacturers have new expansion or investment projects totaling nearly 80 billion (as of September 2025), with equipment accounting for about 80% of the total investment (approximately 63.8 billion). According to the breakdown of equipment value proportions, drilling equipment (20%) corresponds to a demand space of about 12.76 billion, exposure equipment (15%) corresponds to about 9.57 billion, and electroplating equipment (10%) corresponds to about 6.38 billion. In addition, some undisclosed data from second and third-tier manufacturers may also join the expansion, leading to even greater actual equipment demand. Equipment capital expenditure is ahead of schedule (procurement and installation are completed 8 months to 1 year before production), and if production starts in 2027, equipment investment will mainly concentrate in 2025 and 2026.
3. Analysis of Core Equipment Companies
· DingTai High-Tech (Drilling Needle Consumables)：DingTai High-Tech is the global leader in drilling needles, with a global market share of 26.5%, significantly ahead of other competitors (Jingzhou Precision, Japan’s Unimicron, Jindian Technology, etc., all have market shares below 20%). Its drilling needle business benefits from the AI PCB expansion wave and technological upgrades, showing a threefold increase in volume, price, and profit. On the demand side, drilling needles, as consumables, are strongly correlated with the operating rate of downstream PCBs, and with PCB technology upgrades, the hardness of board materials increases, thickness increases, and hole diameters decrease, leading to a significant reduction in drilling needle lifespan (traditional M6/M7 boards have a lifespan of 8000 holes, while M8/M9 and Q fabric boards have a lifespan of less than 300 holes), while the increased processing difficulty drives up prices (the average price of ordinary board drilling needles is 1 yuan, while GB200/GB300 boards are 1.4-1.7 yuan, and M9/Q fabric board prices exceed 2 yuan, with orthogonal backplane drilling needle prices reaching double digits), with the combination of shortened lifespan and price increases leading to a hundredfold demand elasticity. On the supply side, current monthly capacity is 100 million units, expected to expand to 120 million units by the end of 2025, and due to self-manufactured equipment, the expansion speed is fast and costs are low, with capacity far exceeding peers (other manufacturers have capacities of only a few thousand units/month), and some customers are willing to pay a 10%-20% premium to lock in capacity. On the profit side, net profit in 2025 is expected to be about 400 million (reaching equity incentive targets), and with capacity increasing to 150 million units/month in 2026, net profit is expected to reach 700-800 million, benefiting from PCB technology upgrades, with significant profit margins.
· Dongwei Technology (Electroplating Equipment)：Dongwei Technology is the domestic leader in electroplating equipment, with a vertical electroplating equipment market share exceeding 50%, and core customers include Huidian, Pengding, Dongshan, etc., with the top five customers accounting for 30%. In 2024, new PCB orders are expected to be about 1 billion, with 600-700 million orders in the first half of 2025, doubling year-on-year. In terms of products, AI PCBs have higher requirements for electroplating, with the proportion of pulse electroplating equipment (priced at 7-8 million, traditional direct current type at 4-5 million) increasing; the three-in-one electroplating equipment developed in collaboration with customers (integrating de-soldering, copper deposition, and electroplating processes) is currently in the customer verification stage (trial use by five to six customers, inquiries from over 20 customers), priced at over 10 million (similar foreign equipment costs 35 million), and after mass production, profit margins may exceed 50%. In terms of technical reserves, they are laying out MVCP equipment (for CoWoS packaging), TVG electroplating lines (for glass substrate materials), etc., targeting the semiconductor field. On the profit side, net profit in 2025 is expected to be about 200 million, and with the ramp-up of the three-in-one equipment and contributions from new energy and other equipment, it is expected to reach 400-500 million in 2026.
· Dazhu CNC (Comprehensive Equipment Manufacturer)：Dazhu CNC is one of the companies with the broadest product line layout for PCB-specific equipment, with drilling machines accounting for over 60% of revenue, and mechanical drilling machines holding over 70%-80% market share among leading customers like Shenghong. Benefiting from AI PCB demand, the back-drilling process is driving the increase in CCD mechanical drilling machines (priced at 1.5 million, traditional models at 700,000; gross margin 35%, traditional models 20%), with the proportion expected to rise from 5%-10% last year to over 30% in 2025, boosting overall profit margins. In terms of orders, the growth rate of orders in 2025 continues to be revised upward (Q1 30% → Q2 50% → Q3 60% +). In terms of technical upgrades, ultra-fast laser drilling equipment (picosecond technology, suitable for micro-holes below 50 microns) has already received small batch orders from customers like Star and Pengding, targeting the high-end IC substrate market, with potential for domestic substitution. In addition, foreign equipment (such as Japan’s Mitsubishi and Germany’s Small) face capacity shortages and long delivery cycles, providing Dazhu CNC with local substitution opportunities.
· Other Equipment Companies: Other equipment companies include Xinqi Microelectronics, Kaige Precision Machinery, and Jintuo Co., Ltd. Xinqi Microelectronics is the leader in PCB exposure equipment, with a global market share of 10%-15% (second only to Israel’s Orbotech and Japan’s OIC), covering customers like Shenghong and Huidian, with the top five customers accounting for 30%. In the first half of 2025, shipments have already exceeded the total for 2024 (with less than 400 units shipped in 2024, over 100 units shipped in March 2025), with a capacity of about 600 units in 2025, reaching 1000 units in 2026, and full production of 1500 units in 2027, with expected net profit of 750 million after full production (with a unit price of 2.5 million and a net profit margin of 20%).Kaige Precision Machinery is the global leader in solder paste printing equipment, with a unit market share of 30% and a value market share of 20%, with products divided into three categories: one category (for home appliances, unit price 100,000, gross margin 32%, expected to account for 20% in 2025), second category (for mobile phones/tablets, unit price 230,000, gross margin 48%, expected to account for 65% in the first half of 2025), and third category (for AI servers/high-end mobile phones, unit price 430,000, gross margin 65%, expected to account for 15% in the first half of 2025, with Q3 expected to exceed 20%). In the first half of 2025, new orders increased by 70% year-on-year (reaching last year’s total volume). Jintuo Co., Ltd. is the leader in reflow soldering equipment, with a domestic market share of 60% and a global share of 40%, with contract liabilities in the first half of 2025 increasing by over 30% year-on-year, and overseas revenue accounting for 11% (targeting to double in three years); AI server reflow soldering products (competing with Germany’s Ersa, priced in the millions) are currently being validated in the Foxconn supply chain, and successful validation will support orders and profits.
4. Summary of PCB Equipment Investment Logic
· Continuity of Industry Prosperity：Driven by AI, the PCB equipment industry shows strong continuity of prosperity. The transmission path of the industry chain is ‘improvement in terminal demand → increase in PCB factory operating rates → improvement in PCB factory performance → capital expenditure landing → equipment orders and performance realization’. Historically, PCB equipment, as specialized equipment, has investment logic similar to that of specialized equipment in new energy (photovoltaics, lithium batteries) in 2020-2021, requiring attention to industry trends, new orders, and performance realization rhythms. Currently, AI is driving high growth in capital expenditure for PCB companies, with strong equipment orders, and equipment capital expenditure is ahead of schedule, making it the phase with the greatest investment elasticity. The industry trend is confirmed, and the industry prosperity can continue until 2027. We are currently in the first half of the investment phase, with orders just beginning to ramp up, performance gradually being realized, and new order trends upward, indicating that the market is far from over.
· Investment Recommendations and Tracking Indicators：In 2025, PCB equipment investment focuses on industry trends and positioning advantages, with pullbacks being opportunities to enter. Different segments have different tracking indicators: the equipment order confirmation cycle is 3-6 months, requiring tracking of contract liabilities and new orders; for consumables, tracking the operating rates of downstream customers (capacity utilization) is necessary, similar to tracking machine tool operating rates when researching cutting tools. Timing for specialized equipment investment: buy when the industry prosperity improves and performance has not been fully realized; sell during the phase of fastest quarterly performance growth. We are optimistic about investment opportunities in the PCB industry chain driven by AI and NVIDIA, and can layout at any time.