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1. Development Trends of the PCB Micro Drill Industry: AI Server Driven Logic:The rapid development of AI servers is the core driving force behind the PCB micro drill industry.From the perspective of technological evolution, the GB300 is expected to be the mainstream solution from 2025 to 2026, while the Ruby solution is anticipated to become dominant by 2027. With the iteration of solutions, the requirements for substrate materials and processing techniques have significantly increased: the laminated structure of the substrate has become more complex, with thickness gradually increasing to 48-78 layers; the aperture has further decreased due to solution requirements, and the aspect ratio has increased, leading to greater difficulty in drilling and higher performance requirements for the substrate (such as M8, M9, or Cob combination), while the precision requirements for drill needles have increased and processing yields have decreased.Demand Growth Logic: The upgrade of AI server solutions directly drives the growth of micro drill demand.The GB300 solution has increased the number of holes per set by 40%-50% compared to previous generations, with each set containing approximately 5000 holes; the Ruby solution has significantly reduced the lifespan of micro drills due to harder substrates (using M9 or a mix of Cob and M9), with a single M9 drill only able to process 100 holes, while M8 material can process 300-400 holes.The main and auxiliary needle combination mode further amplifies demand:The 0.2×6.5 solution adopts one-to-one (1 main needle + 1 auxiliary needle), while the 0.2×7.5/8.5 solution adopts one-to-two (1 main needle + 2 auxiliary needles), and thicker substrates may adopt one-to-three, leading to exponential growth in demand for main and auxiliary needles.In terms of pricing, influenced by declining yields, reduced efficiency, and a seller’s market, prices are rising non-linearly: the 0.2×6.5 model is approximately 3 yuan, while the Ruby solution’s 0.2×8.5 model reaches 7-8 yuan, and the 0.2×9.5 model may exceed 10 yuan.2. Analysis of the Competitive Landscape in the Industry Chain: Market Position of Leading Enterprises:The AI server drill market is mainly dominated by Ding Tai High-Tech and Jin Zhou Precision (a subsidiary of Zhong Tung High-Tech), which together occupy about 80% of the market share. In terms of customer distribution, Ding Tai High-Tech primarily serves Taiwanese clients, including Taiwan Huachong, APP, etc.; while Jingzhou Precision mainly serves clients in the Pearl River Delta region, covering companies such as Shenghong, Fangzheng, and Jingwang.The current market entry barriers are relatively high, making it difficult for other manufacturers to enter, and the competitive landscape is basically stable.Differences in Business Operations: From the performance in the first half of the year, Jin Zhou Precision may have slightly lower revenue than Ding Tai High-Tech, but its profit volume is higher, mainly because its high-value products, such as AI server drill needles, account for a higher proportion of revenue, driving overall profit margins up.Ding Tai High-Tech covers the entire industry chain, with a relatively lower proportion of high-value products, thus its profit margin is not as high as that of Jingzhou Precision. Currently, Ding Tai High-Tech’s AI business revenue accounts for about 20%, and it is expected to increase to 30% by 2026.3. Raw Material and Equipment Supply: Sources and Costs of Raw Materials:The raw materials for AI server micro drills mainly rely on imports from Japan, such as Kyocera materials, as domestic materials cannot meet the drilling performance requirements and are difficult to use in AI server scenarios.In terms of cost composition, the imported tungsten steel used in high-end AI servers accounts for about 30% of the drill needle cost, while in mid-to-low-end products, tungsten steel can account for up to 50%.The rise in domestic tungsten steel prices mainly affects mid-to-low-end products, while high-end AI servers, due to the use of imported tungsten steel, are less affected.Key Equipment Competitive Barriers: The Romantique equipment is a key barrier in the industry, with a maximum quarterly production capacity of 100 units, and the delivery cycle from order to commissioning is one year.In terms of equipment allocation, Jin Zhou Precision and other manufacturers can each obtain 30-40 units.The purchase of equipment serves dual purposes: one is to expand their own production capacity, and the other is to suppress competitors’ access to equipment.Capacity efficiency comparison shows that for ordinary needles, imported equipment has a daily production capacity of 6800 units, while self-developed equipment has a capacity of 5800-6000 units; for AI needles, self-developed equipment has a daily production capacity of 2500-3000 units.Jin Zhou Precision relies mainly on purchasing Romantique equipment, and due to limited equipment supply, its capacity expansion is slow, currently having a capacity of over 7000 units, which is significantly lower than its competitors’ 11,000 units.4. Product Pricing and Technical Analysis: Price Ranges of Different Products:Product prices exhibit non-linear characteristics: the GP300 main model of 0.2×6.5 is about 3 yuan; the upgraded Ruby solution, due to increased substrate thickness, has the price of the 0.2×8.5 model reaching 7-8 yuan, and the 0.2×9.5 model may exceed 10 yuan. Prices are tied to solutions and do not follow a linear pattern.Due to being in a seller’s market, with tight global demand, and product yields decreasing with increased thickness and aspect ratio, efficiency declines, and costs rise, prices are unlikely to decrease. Characteristics of Super Hard Material Technology: Super hard material micro drills are based on tungsten steel, reinforced with surface coatings.The coatings include TiC, diamond, etc., but not all can use diamond materials due to their brittleness and poor rigidity.The mainstream coating currently is TAC ultra-lubricating coating. The “super hard material” promoted in the market mainly focuses on the coating, while the substrate remains tungsten steel.5. Main and Auxiliary Needle Combination and Industry Dynamics: Main and Auxiliary Needle Combination Solutions:The main and auxiliary needle combination solutions are determined by the thickness of the board. For example, a 6mm thick board uses a 0.2×6.5 main needle paired with a 0.2×3.6 auxiliary needle, adopting a one-to-one method; an 8.5mm thick board may use one-to-two (two auxiliary needles, one main needle) or even one-to-three methods. The main needle, due to its longer length, has a lower lifespan and fewer holes drilled, resulting in greater overall consumption. Tests show that under the same board thickness, the main needle using M9 material can drill 100 holes, while the auxiliary needle using M8 material can drill 300-400 holes.In terms of usage calculation, taking the GB300 solution as an example, a set has about 5000 holes. If the main needle uses M9 material to drill 100 holes, then the number of main needles is about 580, and the number of auxiliary needles is twice that of the main needles, with a total usage of about 1500-1600 needles. As the substrate becomes thicker and harder, the number of holes increases and the lifespan decreases, leading to a further increase in the number of auxiliary needles, driving demand to rise exponentially.Potential Competitors in the Industry: The main competitors in the overseas micro drill sector are Japanese companies, but their market is concentrated in Japan and Europe, with a small share; the Pearl River Delta region in mainland China accounts for over 80% of the PCB industry and is the main market.Regarding new entrants, PCB manufacturers like Shenghong have insufficient technological accumulation and can only produce PCB boards, making rumors of their entry into the micro drill field unrealistic. Q&AQ: What is the upstream and downstream relationship between Jingzhou Precision and Ding Tai High-Tech in the AI server industry chain, and what is the situation with raw material suppliers?A: The two companies share about 80% of the market, mainly serving Taiwanese and Pearl River Delta clients. Raw materials are mainly sourced from Japan, such as Kyocera products. Equipment is primarily self-developed, while also purchasing Romantique equipment, both to expand capacity and to limit competitors.Q: What is the capacity and delivery cycle of Romantique equipment? A: The maximum quarterly capacity is 100 units, with a delivery cycle of one year from order to commissioning.Q: What are the price ranges and pricing patterns for products with different aspect ratios?A: The 0.2×6.5 model is about 3 yuan; the 0.2×8.5 model reaches 7-8 yuan; the 0.2×9.5 model may exceed 10 yuan. Pricing does not follow a linear pattern and is based on solution pricing, influenced by yield and efficiency, showing non-linear growth.Q: Is there room for cost reduction in advanced products in the future? Will downstream customers accept their prices?A: There is little room for cost reduction. Currently, a solution pricing model is adopted, and being in a seller’s market, prices are unlikely to decrease in the future.Q: Are the consumption levels and drilling quantities of the main and auxiliary needles consistent?A: The main needle has a lower lifespan and fewer drilled holes due to its longer length, resulting in greater consumption; the auxiliary needle is used to increase the number of holes drilled by the main needle, reducing the burden on the main needle.Q: What are the drilling quantities for the main and auxiliary needles in the GB300 and Ruby solutions? A: A single M9 material needle can drill 100 holes, while other materials can drill 300-400 holes. The Ruby solution is confirmed to use M9 material and may adopt a Cob and M9 mixed pressure process.Q: How is the number of needles required for a PCB board calculated?A: Taking the GB300 solution as an example, a set has about 5000 holes. If using a 100-hole model, the main needle is about 580 units, and the auxiliary needle is twice that of the main needle, with a total needle count of about 1500-1600 units per board.Q: How does the rise in tungsten steel prices affect drill needle costs?A: It mainly affects mid-to-low-end products, and there are considerations to reduce prices for mid-to-low-end products; high-end AI servers using imported tungsten steel are less affected. In high-end products, tungsten steel costs account for about 30%, while in mid-to-low-end products, it accounts for about 50%.Q: How significant is the threat from overseas competitors? A: Overseas companies like Sumitomo from Japan pose a small threat due to their narrow market coverage, with Japan and Europe having a small share, while the Pearl River Delta region in mainland China accounts for over 80% of the global PCB industry.Q: Is the rumor that Shenghong plans to produce micro drills independently true?A: It is unrealistic. Shenghong mainly engages in PCB board manufacturing and requires long-term technological accumulation to enter the micro drill field, which they lack.———————-

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