Shenghong has exceeded expectations in its expansion plans, aiming to double its production capacity next year. Shenghong stated that the current production pressure is significant, and the newly expanded capacity at its Thailand factory has quickly reached full production. By the end of the year, Shenghong’s output value is expected to reach 40 billion, with the original plan to expand production to 80 billion by 2027 now being advanced to achieve an output value of 80-100 billion by 2026.Drill Bits: Focus on the differences in flexibility and patterns between main drills and pre-drills. From M8 to M9, the aspect ratio of the main drill has significantly increased to over 30 times, leading to a dramatic price surge, while the lifespan of the main drill has sharply decreased to 100-200 holes. The flexibility of the pre-drill is mainly reflected in the increase in layers, resulting in the usage rising from 1 pre-drill to 2-3 pre-drills. Jinzhou has made rapid progress on main drills with an aspect ratio exceeding 30 times, while Dingtai is currently focusing on AI shipments primarily with 5mm pre-drills, and there have also been breakthroughs in main drills. Key attention should be paid to China Tungsten High-Tech and Dingtai High-Tech.Drilling Machines: Ultra-fast drilling machines may become a better solution for M9 processing, with Han’s Laser continuing to make breakthroughs. Since CO2 laser drilling machines use the principle of thermal ablation to melt materials, when the material iterates to M9, it can cause the resin in the board to melt. In contrast, ultra-fast laser drilling machines use cold processing methods, effectively addressing the thermal effect issues. Currently, Han’s Laser has received orders for over 15 machines, and small batch supply is expected to begin in Q1 next year.Exposure: The iteration of PCBs has led to a decrease in processing efficiency of exposure machines and an increase in resolution accuracy, significantly raising the value of each machine. The resolution accuracy of the exposure machine corresponding to GB200 is 20-30 microns, which improves to 10-15 microns after iterating to GB300, while the processing efficiency per board has halved, resulting in a doubling of the demand for exposure machines for processing the same area of boards. At the same time, the increase in accuracy has raised the equipment value from 2 million to 3 million, with significant order growth expected next year. Continuous attention should be paid to Chip Microelectronics.