Yesterday, due to space constraints, we discussed the first part of the PCB industry chain. Today, we will continue to dissect this industry.
Midstream Manufacturing
This segment involves processing copper-clad laminates into finished PCBs, and it is the most technology-intensive and competitive segment, with gross margins typically ranging from 20% to 30%. The product value varies significantly due to differences in technical difficulty and application fields.
China ranks first globally in PCB production and output value, so there are many companies engaged in PCB manufacturing. According to relevant statistics, there are over 1,500 enterprises involved in this field. Today, we will mainly discuss some leading companies, along with their technical characteristics and areas of expertise.
1.Multilayer Boards
This application has the widest range, with higher layers leading to more complex technology and higher value. The main application scenarios are in communication equipment and high-end servers.
Representative players include Shenghong Technology, which we discussed earlier. This company follows a high-end PCB route, focusing on PCBs for graphics cards and AI servers, and is a core supplier for NVIDIA, with projected revenue of 10.7 billion in 2024; Shenzhen South Circuit has the most comprehensive technology and platform, leading in IC substrates domestically, and is also a core PCB supplier for Huawei, with projected revenue of 17.9 billion in 2024.
2.High-Density Interconnect Boards (HDI) and Substrate-Like PCBs (SLP)Through micro-hole technology, higher wiring density is achieved, mainly applied in high-end smartphones and ultra-thin laptops. Advanced processes, such as MSAP (Modified Semi-Additive Process), can achieve finer line widths, further enhancing wiring density.
Domestic representative players include Unimicron Technology, a core PCB supplier for Apple, with projected revenue of 35.1 billion in 2024; and Kingboard Holdings, which has capabilities in high-end HDI/HLC PCBs for AI servers, with projected revenue of 12.6 billion in 2024.
3.IC Substrates (Packaging Substrates)
This provides support, protection, and electrical connections for chips, representing the pinnacle of PCB technology with the highest barriers. ABE substrates are mainly used for high-end chips like CPUs and GPUs.
Representative players include Huada Empyrean, a leader in domestic packaging substrates and high-speed PCBs, and a core supplier for NVIDIA server motherboard switches, with projected revenue of 13.3 billion in 2024.
4.Flexible Circuit Boards
These are suitable for bendable smartphones with foldable screens and automotive electronics in space-constrained scenarios. A representative player is Dongshan Precision, with projected revenue of 36.7 billion in 2024, making it a global leader in flexible PCBs and also a core supplier for Apple.
All the aforementioned PCB companies have revenues exceeding 10 billion, and many enterprises are also laying out in different technological routes, competing with each other.
In 2024, there are five PCB companies with revenues between 5 billion and 10 billion, namely Hongda Technology, Hongxin Electronics, Xingsen Technology, Ultrasonic Electronics, and Shiyun Circuit.
Downstream Applications
Finally, let’s discuss the downstream application end of this industry chain, which is also the ultimate driving force behind PCB demand. The scale and growth potential of different fields determine the ceiling of the PCB market, which can be divided into three main segments.
The most prosperous and largest application market is undoubtedly communication, computers, and servers, especially with the explosive growth of AI servers this year. The value of a single PCB is several times that of traditional servers, making it the strongest growth engine in the past two years.
Ranked second is automotive electronics. With the development of the automotive industry’s “new four modernizations,” especially the three electric systems (battery, motor, and electronic control) of new energy vehicles and advanced driver-assistance systems (ADAS), the demand for high-reliability and high-multilayer PCBs is growing rapidly.
Lastly, there is traditional consumer electronics, which also has a very large market scale and a fast pace of innovation. There is a continuous demand for lightweight and high-density (HDI/SLP) PCBs, which also means a need for more advanced materials and more precise processes, directly increasing the value of each board.
Conclusion
In the coming years, the most promising growth segments in the PCB industry are multilayer boards with more than 18 layers, packaging substrates, and HDI boards. According to relevant institutions, the compound annual growth rates for the next five years are projected to be 15.7%, 7.4%, and 6.4%, respectively.
Due to the significant reliance on imports for high-end upstream materials and equipment, domestic substitution is also a core logic of this industry. With the support of national policies and the pull of downstream demand, achieving domestic substitution is one of the most certain investment themes in the coming years, especially breakthroughs in high-end upstream materials are worth our attention.
The development of technology within the industry will also drive value enhancement. For example, advanced packaging solutions like CoWoP may allow PCBs to undertake some functions originally performed by packaging substrates, which raises the requirements for PCB flatness, line width, and precision to near semiconductor levels, significantly increasing the value of PCBs in the entire consumer goods market.
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