The PCB industry chain is very long and has clear divisions of labor, which can be vividly compared to a “crisscrossing” matrix. Vertically, it consists of a vertical chain from basic raw materials to final products, while horizontally, it serves a wide market for different downstream applications.
1. Overview of the Industry Chain (Vertical)
The PCB industry chain can be divided into three main segments from top to bottom: Upstream: Raw Material and Equipment Suppliers. This is the foundation of the entire industry, determining the performance, cost, and quality of PCBs. The main raw materials include: Copper Clad Laminate: This is the core and most costly raw material for PCB manufacturing (approximately 30%-40% of costs). It is made by laminating copper foil, fiberglass cloth, and resin (such as epoxy resin, special high-frequency and high-speed resins, etc.). Copper Foil: Provides conductive pathways, mainly supplied by copper smelting and processing companies. Fiberglass Cloth: Provides reinforcement and insulation, woven from fiberglass yarn. Resin: Acts as an adhesive and insulator, produced by chemical companies. Key Chemicals: Dry Film/Wet Film: Photosensitive materials used for pattern transfer. Electroplating Chemicals: Such as copper balls, copper sulfate, tin plating additives, etc. Developing, etching, and stripping solutions, etc. Special Materials: Prepreg: Bonding materials used for multilayer board lamination. Gold Salt: Used for gold plating in areas like gold fingers. Production and Testing Equipment: Front-end Equipment: Laser drilling machines, mechanical drilling machines, exposure machines, electroplating lines, etc. Back-end Equipment: Etching lines, optical inspection machines, flying probe testers, etc. Auxiliary Equipment: Presses, warpage correction machines, etc. Characteristics: The upstream industry has high technical barriers and relatively high concentration (especially for high-end copper clad laminates and key equipment), with strong bargaining power. Midstream: PCB Manufacturing. This is the core segment of the industry chain, consisting of PCB manufacturers. They procure upstream raw materials and manufacture PCBs that meet customer requirements through complex processes such as pattern transfer, lamination, drilling, electroplating, and etching. There is a wide variety of product types with a clear technological gradient: Single/Dual-sided Boards -> Multilayer Boards -> HDI Boards -> IC Carriers -> Flexible Boards/Rigid-Flex Boards -> High-Frequency and High-Speed Boards, with increasing technical difficulty and added value. Business models vary: Prototyping/Small Batches: Focused on speed and flexibility, such as Chongda Technology (early stage). Mass Production: Focused on cost control and economies of scale, such as Shenzhen Circuit and Jingwang Electronics in the communications sector. Characteristics: The midstream is a capital-intensive, labor-intensive, and technology-intensive industry, with fierce competition, and company profit margins are significantly affected by fluctuations in upstream raw material prices and downstream customer demand. Downstream: Wide Application Fields. PCBs are known as the “mother of electronic products” and are indispensable in almost all electronic devices. The prosperity of downstream demand directly determines the development of the PCB industry. Communication Sector: One of the largest and highest-end markets. Includes 5G base stations (backplanes, motherboards), core network equipment, routers/switches, optical modules, etc. Requirements include high frequency, high speed, and high reliability. Computers and Data Centers: Servers, storage devices, etc. The explosion of AI servers has placed extremely high demands on PCB layer counts, material speeds, and heat dissipation. Consumer Electronics: Smartphones, laptops, tablets, wearable devices, etc. Pursuing lightweight and compact designs, with extensive use of HDI and flexible boards. Automotive Electronics: One of the fastest-growing markets. From traditional dashboards and entertainment systems to the “three electric systems” (battery, motor, electronic control) of new energy vehicles, as well as intelligent driving systems like ADAS, millimeter-wave radar, and laser radar. Requirements include high reliability, high-temperature resistance, and long lifespan. Semiconductors and Integrated Circuits: The pinnacle of technical barriers. IC carriers are used to support chips and are key to connecting chips with external circuits. Industrial Control, Medical Electronics, Aerospace, etc.: High customization requirements with strict demands for stability and adaptability to special environments.
2. The “Horizontal” Characteristics and Development Trends of the Industry Chain. Industrial Transfer and Regional Clustering: The global PCB industry has undergone a transfer path from “Europe and America -> Japan -> Taiwan & South Korea -> Mainland China”. Mainland China has become the largest PCB production and consumption market in the world, forming industrial clusters centered around the Pearl River Delta and Yangtze River Delta. Specialized Division of Labor and Integrated Consolidation: Specialization: Most companies focus on a specific segment of the industry chain. For example, Shengyi Technology is a top global supplier of copper clad laminates but does not manufacture PCBs; while Shenzhen Circuit is a top PCB manufacturer but does not produce copper clad laminates. Integration: A few giants attempt vertical integration to reduce costs and quality fluctuations. For instance, Kingboard Chemical is the largest copper clad laminate manufacturer globally and is also expanding into PCB manufacturing. Technology-Driven and Product Upgrading: Downstream electronic products are continuously evolving towards high performance, miniaturization, and high frequency, which continuously drives PCB technology upgrades. The current technological trend includes: high layer counts, high density (HDI/SLP), high-frequency and high-speed materials, embedded components, and system-in-package (SiP), etc. Cost Pressures and Environmental Requirements: Fluctuations in the prices of bulk commodities like copper and oil directly affect raw material costs. PCB manufacturing involves extensive chemical processing and wastewater and waste discharge, with tightening environmental policies prompting the industry to transition towards green and clean production.
3. Key A-Share Listed Companies in the Industry Chain (Examples) Upstream – Copper Clad Laminate: Shengyi Technology (600183): The absolute leader in domestic copper clad laminates, with a comprehensive product range and significant breakthroughs in high-frequency and high-speed fields. Huazheng New Materials (603186): Actively laying out in high-speed copper clad laminates and other fields. Nanya New Materials (688519): A leading domestic copper clad laminate manufacturer. Midstream – PCB Manufacturing: High-end multilayer boards/carriers: Shenzhen Circuit (002916), Xingsen Technology (002436), Huidian Co., Ltd. (002463) High-end HDI/graphics card boards: Shenghong Technology (300476), Jingwang Electronics (603228) Communication/server boards: Shengyi Electronics (688183), Huidian Co., Ltd. (002463) Flexible boards: Pengding Holdings (002938) (global leader in FPC), Dongshan Precision (002384) Downstream: The downstream is too broad, including ZTE, Huawei (communications), Inspur Information, Foxconn (servers), BYD, Tesla (automotive), Apple, Xiaomi (consumer electronics), and almost all technology giants. The PCB industry chain is a typical technology-driven manufacturing chain: the upstream provides the “flour and seasoning,” determining the basic performance of the product. The midstream is the “baker,” processing raw materials into “bread” that meets different needs through exquisite craftsmanship. The downstream is the “consumer” and “restaurant,” whose constantly changing demands (for more exquisite, nutritious, and special bread) are the fundamental driving force for the entire industry chain’s advancement. Understanding this chain helps grasp the PCB industry’s prosperity cycle, technological evolution direction, and the core competitiveness of different companies. As the computing power demand of AI servers grows exponentially and the electronicization rate of new energy vehicles exceeds 50%, PCBs (printed circuit boards), as the “cornerstone of the electronics industry,” are standing at the critical point of industrial explosion. This sector, once regarded as “traditional manufacturing,” is now resonating with high-end upgrades and emerging demands, reconstructing the global competitive landscape—Chinese manufacturers, with technological breakthroughs and production capacity advantages, are transitioning from “scale leadership” to “value dominance,” while AI and automotive electronics are becoming the core engines driving high prosperity in the sector. The PCB sector is currently in a golden cycle of “demand explosion, supply optimization, and value enhancement,” with investment logic shifting from “general rise” to “structural opportunities,” focusing on “high-end” and “high elasticity” as the two main lines. From a segmented perspective, PCBs for AI servers (high multilayer boards, carriers) and automotive HDI boards are the most certain tracks, with fast demand growth and high technical barriers. Companies that achieve technological breakthroughs and capacity releases first will continue to benefit; upstream high-end materials (such as M9-grade copper clad laminates, third-generation electronic fiberglass) and equipment (such as high-end drilling and exposure equipment) are also key focus areas due to significant import substitution potential and high performance elasticity. For investors, when selecting targets, three dimensions need to be carefully considered: first, technological reserves, whether they have the R&D capabilities for high-end products and certification qualifications from downstream giants; second, capacity rhythm, whether they can release effective capacity during the capacity gap period of 2025-2026; third, cost control, whether they have bargaining power over raw materials and lean production management levels. Only companies that meet all three conditions can truly seize the growth dividends in the high-end wave of PCBs.