Global tech giants have quietly visited leading Chinese PCB companies, signaling an undercurrent in the AI chip supply chain. A report from the Shanghai Securities Journal has ignited the market: Google has recently conducted visits to several major domestic PCB giants, including Shenghong Technology, to discuss the procurement of PCBs for artificial intelligence chips. This report has created ripples in the market, akin to a stone thrown into a calm lake. On November 6, the A-share market experienced a surge, with the Shanghai Composite Index successfully breaking the 4000-point mark. The PCB sector had already begun to move quietly, with Shenghong Technology seeing a net inflow of 466 million yuan in principal funds on November 5, ranking among the market leaders.
—01 Event Overview: Google’s Visit to China
Google’s recent inspection activities have been quite low-key, but sources reveal that Google has been visiting several major domestic PCB giants, primarily to discuss the procurement of PCBs for artificial intelligence chips. This is not an ordinary procurement visit, but rather an olive branch thrown by global AI giants to the Chinese PCB industry chain. Insiders emphasize, “If these intended orders are realized in the future, it will greatly boost the PCB industry chain.” This statement encapsulates the significance of this visit. As the ‘mother of electronic products’, PCBs are the foundation that connects chips to circuits, and in the AI era, the demand for high-end PCBs is even more urgent. AI chips require higher-performance PCBs to support high-speed data transmission, which is precisely why Google is seeking collaboration with Chinese manufacturers.
02 Market Impact: The ‘Google Effect’ on the PCB Sector
Although the news has just emerged, the market’s optimism towards the PCB sector has been evident for some time. On July 8, the A-share circuit board (PCB) index surged immediately after opening, with a single-day increase of 4%. At that time, Jin’an Guoji and Bomin Electronics hit the daily limit, while Jingwang Electronics, Kexiang Co., Shengyi Technology, Huadian Co., and Shenghong Technology all rose over 5%. Therefore, this Google visit could become a catalyst for a new round of market activity in the PCB sector. From the perspective of capital flow, smart money has already positioned itself. In October, financing clients increased their holdings in Shenghong Technology by 2.551 billion yuan, ranking second in the market. This data fully reflects institutional confidence in leading PCB stocks. Additionally, the current A-share market is experiencing a warming trend. On November 3, over 3,500 stocks in the A-share market rose, with 90 stocks hitting the daily limit. On November 6, the Shanghai Composite Index even broke the 4000-point threshold. Market risk appetite has clearly increased, creating a favorable environment for tech stocks.
03 Stock Analysis: Who Will Benefit the Most?
If Google’s intended orders are ultimately realized, several leading PCB companies will be the first to benefit. Shenghong Technology is undoubtedly the main player in this event. The company has not only become the focus of Google’s inspection but also boasts impressive fundamentals—achieving a net profit attributable to shareholders of 1.102 billion yuan in the third quarter, a year-on-year increase of 260.52%, maintaining its leading position in the high-end PCB market. Additionally, Zhongji Xuchuang is also worth noting. In October, financing clients increased their holdings in Zhongji Xuchuang by 2.943 billion yuan, ranking first in the market. This indicates strong market confidence in AI computing power infrastructure targets. Huadian Co., Jingwang Electronics, Shengyi Technology, and others have all performed excellently during the PCB sector’s fluctuations in July, and these companies have deep layouts in the high-end PCB field, likely to benefit from the growing demand for PCBs for AI chips. From the perspective of the industry chain, PCB equipment and material suppliers will also benefit indirectly. As PCB companies expand production, the demand for Laser Direct Imaging (LDI) equipment has surged by 180% year-on-year, making related equipment companies worth watching.
04 Industry Outlook: PCB’s Shining Moment
The development prospects of the PCB industry extend far beyond the demand from Google alone. From a policy perspective, the government continues to support the development of the PCB industry. The 14th Five-Year Plan explicitly proposes the development of high-performance printed circuit board (PCB) products and the research and development of new types of printed circuit boards and copper-clad materials. From an industry cycle perspective, the PCB sector is entering a new round of prosperity cycle. Analysts point out that unlike the capacity expansion driven primarily by consumer electronics demand in 2021-2022, this round of PCB capacity investment is shifting towards the long-term rigid demand for computing power infrastructure. The proportion of high-end products has increased to 45%, driving a 12% year-on-year increase in the average industry price. From a global perspective, Chinese PCB companies are seizing opportunities for order transfers. The U.S. has imposed a 25% tariff on Japan and South Korea, leading to increased costs for Japanese and South Korean PCB companies, providing a replacement space for Chinese companies.
05 Investment Strategy: How to Seize Opportunities?
In light of the potential opportunities in the PCB sector, how should investors position themselves? Focus on leading stocks with high earnings certainty. The trend of increasing concentration in the PCB industry is evident, with leading companies achieving performance breakthroughs through technological advantages. Companies like Shenghong Technology have already proven their profitability. Invest in high-barrier niche areas. The demand for high-level HDI boards and packaging substrates for AI servers is growing faster than expected, driving global high-end PCB capacity utilization rates above 90%. Companies with a high proportion of high-end products are more competitive. Pay attention to market rhythm. The current market rotation speed is accelerating, and November may experience fluctuations, setting the stage for year-end trends. It is recommended to buy on dips and avoid chasing highs. Market analysts believe that for sectors with high prosperity such as technology, it is essential to continue focusing on core leaders with a high match between performance and valuation, while also paying close attention to sectors that show marginal improvement in low-position areas.
—As global AI competition intensifies, Google’s outreach to Chinese PCB companies is just the beginning. AI chips require high-performance PCBs, just as the brain requires complex neural networks. Without sophisticated PCBs, even the most powerful chips cannot perform effectively. Chinese PCB companies have upgraded from simple ‘processing plants’ to key participants in the global AI industry chain. In the future, as the demand for AI computing power explodes, leading Chinese PCB companies are expected to occupy a more significant position in the global supply chain. For investors, this wave driven by technological and industrial upgrades may just be getting started.