PCB manufacturer Zhen Ding-KY announced its third-quarter financial report, with a quarterly revenue of NT$47.366 billion, a quarter-on-quarter increase of 23.98% and a year-on-year decrease of 6.41%; net profit after tax was NT$2.392 billion, with earnings per share (EPS) of NT$2.46. Cumulatively, the EPS for the first three quarters reached NT$3.79. The company indicated that revenue was affected by exchange rate fluctuations, showing a year-on-year decrease; however, in US dollar terms, the third quarter still saw a slight increase of 0.6% compared to the same period last year, indicating a stable growth in demand for AI applications.
Zhen Ding stated that the gross margin for the third quarter was 22%, slightly down by 0.5 percentage points compared to the same period last year, mainly due to increased investment in AI computing power capacity and a higher proportion of depreciation. However, the gross margin for the first three quarters still rose to 18.5%, with an operating margin of 6.4%, both better than the same period last year, reflecting continuous improvement in operational efficiency. All four application areas saw year-on-year growth, with IC substrates growing by 30%.
Looking ahead to the fourth quarter, Zhen Ding expects that customer new product shipments will enter the peak season, maintaining a normal overall shipment rhythm and high capacity utilization. Demand for BT substrates has significantly rebounded since the second half of the year, with an average utilization rate exceeding 90%; ABF substrates have benefited from the introduction of large-sized products, with a substantial increase in the number of prototypes, driving strong performance in the substrate business. Analysts expect Zhen Ding’s operations in the fourth quarter to continue the seasonal peak, with annual revenue expected to reach a new high.
Zhen Ding pointed out that 2026 will be a key growth year, with all four applications accelerating. The AI server sector focuses on the next-generation platforms of customers, launching Intelligent HDI (iHDI) and HLC (High-Level Board) products, with revenue expected to gradually increase in 2026 and double in 2027; IC substrates will initiate the BT substrate expansion plan at the Qinhuangdao plant in the first half of next year. Meanwhile, the number of prototypes for ABF substrates related to AI computing power large-sized products has significantly increased, with revenue contributions expected to rise quarter by quarter.
In addition, edge AI devices are another growth engine. As AI smartphones and foldable devices become more complex in design, the value of single boards continues to rise; AI glasses are also expected to see exponential revenue growth next year due to accelerated investments from multiple brands.
In terms of capacity, Zhen Ding is simultaneously expanding AI application capacity. The iHDI and HLC capacity at the Huai’an plant is expected to double by the end of next year; the Thailand plant is gradually ramping up production, expected to reach full capacity by the second quarter of 2026, with the second, third, fifth plants, and mechanical drilling plant being established simultaneously; the ABF substrate and iHDI+HLC production lines at the Kaohsiung AI park are expected to enter the prototyping stage in the first quarter of 2026. As new capacities are gradually coming online, the overall operational efficiency is expected to gradually manifest in the coming years.
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