Reaping the benefits of the AI boom.
Author | beyondEditor | Little White
Imagine, what is the “nervous system” of your smartphone, computer, or even smart car? It is the printed circuit board (PCB)! This seemingly unremarkable component is the “skeleton” and “blood vessels” of all electronic devices.
What is currently the hottest topic in the tech world? AI computing power! High-performance computing (HPC)! Data centers! Smart cars! Wearable devices! These fields are ravenously demanding higher performance, more complex, and more precise PCBs, especially the high-end ones serving AI servers and high-speed switches.
Why are high-end PCBs so sought after?
First, AI/HPC is a “money-eating beast.” Training large models and conducting high-performance computing require super servers. The PCBs in these servers must utilize precision technologies like high-density interconnects, which have high technical barriers, causing the value of each board to soar.
Secondly, optical modules are being upgraded. Network speeds are racing from 800G to 1.6T, and optical modules must keep pace. This requires more advanced PCB manufacturing processes, such as mSAP (modified semi-additive process), which is technically challenging but adds significant value. Future technologies like CPO (co-packaged optics) are expected to create even more new demands.
Additionally, the potential demand from smart cars and wearable devices is significant. The intelligent brains (domain controllers), various sensors, and in-car entertainment systems in cars, as well as smartwatches and headphones on your wrist, all require lighter, thinner, better heat dissipation, and faster signal transmission PCBs.
In summary, the competition in low-end PCBs is fierce, creating a red ocean; while high-end PCBs have high technical barriers, fewer players, and increasing concentration. Those with solid technology, stable major clients, and a willingness to invest in R&D will capture the largest share of the cake.
Huadian Co., Ltd. (002463.SZ) is a standout player among domestic competitors.
Huadian Co., Ltd.: Impressive Mid-Year Report
It is no exaggeration to say that Huadian Co., Ltd. is a top student in the industry. Look at its performance forecast for the first half of 2025: net profit attributable to shareholders is expected to be between 1.65 billion and 1.75 billion yuan, a year-on-year increase of 45%-53%; net profit excluding non-recurring gains and losses is expected to be between 1.61 billion and 1.71 billion yuan, also a year-on-year increase of 45%-54%.
(Source: Company 2025 Half-Year Performance Forecast)
This growth momentum is remarkable; it is worth noting that Huadian Co., Ltd.’s total revenue for 2024 is expected to increase by 49% year-on-year, with net profit attributable to shareholders increasing by 71% year-on-year. In the first half of this year, its performance continues to soar, driven primarily by high-end PCBs.
(Source: Company 2024 Financial Report)
In a July 2025 announcement, the company stated that its AI server and HPC-related products accounted for approximately 29.5% of its revenue in 2024, indicating that it has firmly captured the benefits of the AI computing boom.
(Source: Company July 2025 Announcement)
In the 2025 mid-year performance forecast, the company stated that its growth is primarily driven by the structural demand for printed circuit boards in emerging computing scenarios such as high-speed computing servers and artificial intelligence, as well as a balanced product layout and years of deep cultivation in mid-to-high-end products and mass production technology.
(Source: Company 2025 Mid-Year Performance Forecast)
Historically, the company has maintained a steady growth trend in revenue. From 2019 to 2024, the company’s revenue increased from 7.1 billion yuan to 13.3 billion yuan, with a CAGR of 13%. In the past two years, the company’s revenue growth has accelerated.
(Source: Market Value Cloud APP)
On the profitability front, the company’s net profit attributable to shareholders increased from 1.2 billion yuan in 2019 to 2.6 billion yuan in 2024, with a CAGR of 16%.
(Source: Market Value Cloud APP)
The cash ratio indicates that the company’s revenue growth has been matched by a sufficient cash flow. Meanwhile, the net cash ratio shows that the company’s profits are essentially real cash.
(Source: Market Value Cloud APP)
Growth Secrets: What Makes Huadian So Strong?
Huadian Co., Ltd.’s soaring performance in the past two years is not coincidental; it holds several “trump cards”:
(1) Differentiated Products Tied to Overseas Major Clients
As one of the leading PCB companies in China, the company successfully entered the supply chains of several international tech giants early on, especially establishing a foothold in the ASIC server and high-speed switch PCB sectors. In 2024, the company’s overseas revenue accounted for 86.5%.
The upgrade and development of the PCB industry are primarily driven by changes in downstream terminal demand. In 2024, AI servers and high-speed network devices in data centers are the main and key growth drivers for the PCB market, promoting the growth and development of various PCB products, among which multilayer boards with more than 18 layers grew by approximately 40.2%, making it the best-performing segment in the PCB market; HDI boards also benefited with a growth of about 18.8%.
Geographically, due to the strong growth of multilayer boards with more than 18 layers, BT-based packaging substrates, and HDI boards, the Chinese PCB market is expected to grow the fastest in 2024.
(Source: Company 2024 Financial Report)
As a leading manufacturer of high-speed communication PCBs globally, the company significantly benefits from the current round of PCB upgrades driven by AI. In 2024, AI servers and HPC-related products accounted for approximately 29.5% of the company’s enterprise communication market boards, while high-speed network switches and supporting equipment accounted for about 38.6%.
(Source: Company 2024 Financial Report)
It can be said that the company, based on its leading technology in enterprise communication market boards and high-speed network switch-related PCBs, has timely captured the explosive growth demand for high-end products in communication and automotive fields such as AI and ADAS, achieving higher revenue growth by binding overseas major clients and launching higher value-added products.
(2) High R&D Support for Profitability
Since 2019, the company’s R&D expenses have rapidly increased from 320 million yuan to 790 million yuan in 2024. The company’s R&D investments are primarily focused on cutting-edge fields such as HDI, ultra-high-speed signal transmission, and high-frequency materials.
These technological breakthroughs not only enhance product performance but also strengthen the company’s bargaining power among high-end clients. Especially in emerging application fields such as artificial intelligence and high-performance computing (HPC), the demand for high-end PCBs is rapidly growing, and the company has successfully seized this market opportunity with its technological reserves and R&D strength.
(Source: Market Value Cloud APP)
Compared to comparable companies in the industry, the company’s R&D expense ratio has been steadily increasing, reaching 5.9% in 2024, second only to Shenzhen South Circuit (which is 7.1%). Huadian Co., Ltd.’s R&D expense ratio is significantly higher than that of other comparable companies, placing it at a relatively high level among peers.
(Data Source: Various Company Financial Reports)
With its layout in the high-end PCB market and continuous breakthroughs in key technologies, as well as optimizing product structure, the company’s PCB product gross margin has improved from 30.4% in 2019 to 35.9% in 2024. Meanwhile, the company’s overall gross margin has increased from 29.5% to 34.5%.
After proper cost control, the company’s core profitability—net profit margin—has risen from 16.9% in 2019 to 19.4% in 2024.
(Source: Market Value Cloud APP)
Through high-intensity R&D investment and technological innovation, the company has not only enhanced its technical barriers but also provided continuous profit growth momentum. In 2024, the company’s high-end PCB expansion project in Thailand is progressing, which is expected to further release capacity and expand its market share in high-end products. This strategic move will help enhance its profitability.
(3) Capacity Expansion to Meet Medium- and Long-Term Demand
In the 2024 financial report, the company emphasized in its “Business Outlook” that it will “increase investment… implement a series of production line technology transformation projects, and accelerate the construction of new high-end PCB expansion projects for AI chips.”
(Source: Company 2024 Financial Report)
The proactive expansion of production capacity reflects the company’s confidence in business growth. Considering that historically, Huadian Co., Ltd. has been relatively cautious about investment expansion, the current large-scale investment in AI-related projects indicates that the company is indeed optimistic about the strong medium- and long-term demand in the industry.
In 2024, the company launched a high-end PCB expansion project for AI chips in Kunshan with a total investment of 4.3 billion yuan. At the same time, the company is also building a high-end PCB production base in Thailand, which is expected to enter small-scale production in 2025. These expansion measures will not only help alleviate the current capacity constraints but also lay a foundation for the company’s future sustainable development.
From an industry demand perspective, the compound annual growth rate (CAGR) for AI servers and HPC-related PCB products (excluding substrates) is expected to reach approximately 40.2% from 2023 to 2028, bringing new growth opportunities to the PCB market while also posing higher challenges to the technical and innovative capabilities of PCB companies.
(Source: Company 2024 Financial Report)
AI and high-speed network infrastructure require extremely high data processing and transmission speeds, integrating various complex technologies such as high-speed computing, large-capacity storage, and efficient heat dissipation, necessitating high-speed signal transmission, high density, and high reliability integration within limited space.
The company’s high-end PCB expansion plan is precisely designed to meet this demand, ensuring the company’s leading position in the AI server and switch markets.
Moreover, the rapid development of new energy vehicles is also driving growth in the automotive PCB market. By 2025, the global automotive PCB market is expected to exceed 30 billion USD, with its share of the overall PCB market increasing from 12% in 2020 to 20%.
The company has already made breakthroughs in high-end products such as millimeter-wave radar and HDI autonomous driving boards, with its automotive board business accounting for 18% of total revenue. Through continuous technological upgrades and capacity expansion, the company is expected to further consolidate its competitive advantage in this rapidly growing market.
Huadian Co., Ltd. (002463.SZ) represents a classic example of a traditional manufacturing leader successfully seizing the wave of technological revolution and achieving a remarkable transformation.
1. It has accurately positioned itself to benefit from the explosive growth of AI computing power, data center expansion, and the proliferation of smart hardware;
2. With a solid accumulation of high-end PCB technology and first-mover advantage, it occupies a favorable position in a golden market;
3. Its impressive performance growth and increasing share of AI products demonstrate its strength;
4. Through capacity expansion plans, it paves the way for sustained growth in the future;
In the foreseeable future, as a leading enterprise in China’s high-end PCB sector, it is expected to continue benefiting from the industry’s high prosperity. It is undoubtedly one of the “core assets” that investors need to focus on in the technology manufacturing field. Of course, continuously tracking its technological progress, capacity implementation, and changes in the competitive landscape of the industry is also crucial.
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