[ZhejiangBusiness Certificate]PCB Equipment: AI catalyzes simultaneous growth in industry volume + price, accelerating the opening of space for domestic leaders.
1、【PCB Industry】 benefits fromAIDC drive, with a new round of capital expenditure cycle expected to explode.
（1）Market Space:PCB is known as the “mother of electronic products”; in 2024, the global PCB total output value is expected to reach 73.6 billion USD, with a year-on-year growth of 5.8%, and China has the largest production capacity in the world. In the medium to long term, benefiting from AI demand, the market for high-end PCB “thinner, denser, and better heat dissipation” is expected to continue to grow, with the global PCB output value expected to reach 94.661 billion USD by 2029, with a CAGR of 5.2% from 2024 to 2029.
（2）Capital Expenditure: The third round of capital expenditure cycle has begun, and in the first three quarters of 2025, the total capital expenditure of eight domestic PCB leaders reached 16.3 billion CNY, a year-on-year increase of 85%, with upstream equipment expected to benefit significantly.
2、【PCB Equipment】 benefits from global AI demand + high-end iteration of PCB, with equipment demand experiencing simultaneous growth in volume and price; there is significant room for improvement in localization.
（1）Market Space: Global market: from 5.84 billion USD in 2020 to 7.085 billion USD in 2024, with a CAGR of 4.95%. Chinese market: According to the China Business Industry Research Institute, in 2024, the Chinese PCB equipment market size is expected to reach 29.442 billion CNY, with a CAGR of 5.6% from 2020 to 2024. Trends: AI drives the demand for high-layer boards, HDI boards, and IC packaging substrates, boosting the demand for PCB equipment.
（2）Competitive Landscape: The industry concentration is relatively low, with China’s CR5 market share totaling 23.9%, and Dazhu CNC leads the domestic market with about 10.1% share (6.5% globally). Moreover, the localization rate of high-end PCB equipment is less than 30%. The leading domestic PCB equipment manufacturers are gradually forming global competitiveness in drilling (Dazhu CNC), lithography (Xinqi Microelectronics), electroplating (Dongwei Technology), and consumables (Ding Tai Gao Ke).
3、Focus Areas: PCB drilling + exposure + electroplating equipment, and drilling needles; the industry is expected to experience simultaneous growth in volume + price.
（1）【Drilling Equipment】 The global market size is expected to exceed 10 billion USD in 2024, benefiting from the increasing demand for 14-layer and above high multilayer PCBs. The high-end market share is mainly occupied by Japan’s Hitachi, Germany’s Schmoll, and Japan’s Mitsubishi, while domestic companies including Dazhu CNC (with a domestic market share of 30% in 2024), Suzhou Weijia, and a large number of technology companies are expected to accelerate their catch-up.
（2）【Drilling Needles – Consumables】 In 2024, the global PCB drilling needle market sales are expected to reach 836 million USD, with AI driving demand towards high-end products, and the industry is expected to experience simultaneous growth in volume and price, benefiting domestic leaders like Ding Tai Gao Ke.
（3）【Exposure Equipment】 benefits from AIPCB with higher precision, lower costs, and faster iteration trends;
（4）【Electroplating Equipment】 benefits from the increase in PCB layers, precision + yield, increasing the difficulty of equipment.
4、Investment Recommendations: Benefiting from the rapid expansion of global AI data centers + the demand for high-end iteration of PCB technology, the industry is expected to experience simultaneous growth in volume + price. Domestic industry chain leaders are expected to seize significant breakthrough opportunities. Key focuses include: Dazhu CNC, Ding Tai Gao Ke, Xinqi Microelectronics, Dongwei Technology, Di’er Laser, Kaige Precision Machinery, and Zhongtung High-tech.
5、Risk Warning: The global data center expansion progress may not meet expectations, risks of new technology development falling short of expectations, and risks of PCB industry transfer.
【Dongwu Machinery】 Dazhu CNC: M9 material application is imminent, optimistic about the rapid demand growth.
PCB layer materials are developing towards M9, with ultrafast laser being the optimal solution.
To achieve higher frequency and speed signal transmission, NV plans to introduce M9 material as the copper-clad laminate core material in the Rubin architecture. Using Q cloth as the supporting material for M9 is the mainstream solution, with a melting point of 1700°C, significantly higher than that of glass cloth. The traditional CO2 thermal processing method faces bottlenecks in drilling M9 material, while ultrafast laser provides a cold processing solution with strong material compatibility, making it the optimal solution for M9 material processing.
Micro-hole diameter development also favors ultrafast technology.
1.6T optical module hole diameter has shrunk to 50 microns, requiring the use of mSAP technology. The difficulty of processing micro-hole diameters has increased, and the traditional CO2 thermal processing method struggles to control hole wall quality, while ultrafast technology offers better yield and efficiency for small diameter processing. Looking ahead, HDI hole diameters will gradually shrink, and ultrafast laser drilling is expected to capture a larger market space.
In 2026, capital expenditure from board manufacturers is highly certain, and the company is expected to benefit significantly.
In 2025, the company’s performance is expected to grow significantly, mainly due to Shenghong being the company’s largest customer contributing a large number of orders. Looking ahead to 2026, many domestic board manufacturers are planning to layout high-end PCB production capacity, and numerous capital expenditure plans are expected to be implemented in 2026 for equipment bidding. Currently, the company has a significant positioning advantage, and the penetration rate of high-end products is gradually increasing, which is expected to benefit fully from the PCB expansion wave.
We judge that the 1.6T optical module and M9 material PCB will open up demand space for ultrafast lasers, and the company is expected to benefit significantly. It is estimated that the company will achieve a profit of 1.2 billion in 2025 and 2.5 billion in 2026, with a target market value of 100 billion.
【Guangfa Communications】 recommends core material shortages in optical modules— Domestic cw lasers: Source Jie Technology, Yongding Co., Ltd.
Silicon photonic module performance/cost/material complexity advantages are significant, and domestic optical module leaders are accelerating transformation. We expect that the silicon photonic penetration rates for Zhongji Xuchuang will be 50%/75% in 2025/2026, while Xinyi Sheng is accelerating the self-research of silicon photonic modulator chips and enhancing its own module’s silicon photonic penetration rate.
CW light source expansion cycles are long, and there will be a definite shortage in 2026. CW light sources are the lasers that support silicon photonic modules and are currently the most scarce link in the optical module industry chain. The current industry situation is that the production capacity of the world’s leading cw manufacturers has been almost completely divided among leading optical module manufacturers, and second-tier optical module manufacturers are attempting to introduce new cw laser suppliers to moderately alleviate shortages.
Source Jie Technology: Domestic cw laser leader, with strong determination to expand production/pathway sentiment, and scale expected to exceed expectations.
Yongding Co., Ltd.: Among second-tier cw/EML manufacturers, it is the fastest growing company. According to the industry chain adjustment, the company’s cw/100G EML is nearing sample completion for one leading second-tier optical module company in both domestic and overseas markets, and is expected to ship in large quantities in 2026, thus becoming the fastest growing domestic cw/EML supplier aside from Source Jie.
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