This article is an industry research analysis and does not constitute any investment advice. The market carries risks, and investments should be made cautiously. Core Insight: Amid the wave of AI computing infrastructure construction, the PCB industry is undergoing structural transformation. Zhongfu Circuit, leveraging core technologies such as embedded components and stacked packaging, is gradually entering the AI data center power sector. The ramp-up of its factory in Thailand and optimization of its customer structure are noteworthy. However, investors should rationally view the industry’s high growth expectations and cautiously assess the risks of technology certification and capacity realization.
1. Technical Breakthrough:
From Traditional PCB to AI Power Solutions As the global demand for AI large model training grows exponentially, the power architecture of data centers is undergoing unprecedented changes. The traditional three-level power architecture is gradually evolving towards a more efficient and integrated high-voltage direct current (HVDC) direction, which places higher demands on the integration and thermal performance of power PCBs.
In this context, Zhongfu Circuit has gradually built a differentiated competitive advantage through years of technological accumulation:
Deepening Technical Barriers: The company possesses embedded components (embedded capacitors/embedded inductors), stacked packaging, and advanced HDI processes, enabling its products to meet the power supply needs of high-power AI chips. Notably, its subsidiary, Heshan Zhongfu Xingye Circuit Co., Ltd., recently obtained a patent for “PCB structure with embedded components,” a technological breakthrough that achieves stable embedding of components suitable for mass production, highly aligning with the demand for three-level power modules.
Significant Increase in R&D Investment: In the first three quarters of 2025, the company’s R&D expenses increased by 35.37% year-on-year, reaching 76.5977 million yuan, a year-on-year increase of 42.72%. This continuous investment in technology is entering a phase of results transformation, with embedded component technology generating over 20 million yuan in revenue within 2024, indicating a gradual enhancement of its technological commercialization capability.
2. Customer Structure: Binding with Global Tech Giants’ Supply Chains In terms of high-end customer expansion, Zhongfu Circuit has successfully entered the power PCB supply chains of global cloud giants such as Google and AWS, providing power module PCBs for TPU computing units. Through collaboration with contract manufacturers like Flex, the company has secured a significant share of Google’s TPU-related business.
Meanwhile, the company is actively expanding its cooperation within the NVIDIA ecosystem. Although it currently participates indirectly in NVIDIA’s supply chain through MPS (Chip Source System), with the iterative upgrade of the Rubin architecture GPU, the company is expected to deepen its cooperation level based on its technological advantages. Additionally, stable collaborations with leading companies like AMD and Huawei have also established a relatively diversified customer base for the company.
3. Capacity Layout: Thailand Factory as a New Growth Engine Facing the challenges of stricter domestic environmental policies and limited capacity expansion, the strategic significance of Zhongfu Circuit’s Thailand factory is highlighted:
• Phase I capacity is accelerating release: The first phase of the Thailand factory is designed for a capacity of 40,000 square meters/month and has now entered mass production, with a capacity utilization rate of about 70%. As orders from key customers like Delta are gradually introduced, it is expected that the capacity utilization rate will increase to over 85% by the fourth quarter of 2025.
• Phase II planning focuses on high-end: The second phase plans to invest 500-700 million yuan, focusing on MSAP technology direction. If the technological upgrade is successful, the unit output value is expected to increase significantly. This layout will strengthen the company’s technological advantage in the field of embedded components for three-level power supplies, forming a differentiated competitive landscape with domestic peers. It is worth noting that the capacity utilization rate of the domestic factory has reached 95%, and the smooth production of the Thailand factory is crucial for ensuring order delivery and increasing market share. However, compared to industry pioneers, the construction progress of the Thailand factory still has a certain gap, with overseas revenue expected to account for only about 35% by 2026.
4. Performance: Initial Signs of Turning Point but Need Continuous Verification In the first three quarters of 2025, Zhongfu Circuit achieved operating revenue of 1.355 billion yuan, a year-on-year increase of 29.80%; the revenue for the third quarter alone was 506 million yuan, a year-on-year increase of 33.22% and a quarter-on-quarter increase of 7.11%, showing an accelerating growth trend.
In terms of profitability quality, the gross margin for the first three quarters reached 15.24%, a significant year-on-year increase; the gross margin for the third quarter was 15.25%, an increase of 3.59 percentage points year-on-year. The proportion of the company’s AI power business has increased from 30% in 2024 to about 50% in 2025, with the increase in high-margin business proportion driving overall profit improvement.
However, cash flow indicators still need attention: the net cash flow generated from operating activities in the first three quarters was 45.78 million yuan, a year-on-year decrease of 62.07%. The company’s management stated that they are strengthening accounts receivable management and capital turnover efficiency, and it is expected that cash flow conditions will improve in the fourth quarter.
5. Industry Outlook: The AI Power PCB Market Has Vast Potential According to industry research data, the global AI server PCB market is expected to reach 12 billion USD by 2025 and is likely to exceed 30 billion USD by 2027, with a compound annual growth rate of over 40%. In this high-growth track, three-level power modules, as key components directly supplying power to AI chips, are rapidly increasing in technical barriers and value.
As the power of GPU single chips continues to rise (expected to reach 3000-5000W by 2027), the inductors, capacitors, and DrMos of three-level power supplies need to be integrated into new embedded PCB substrates, providing vast opportunities for companies mastering embedded component technology. At the same time, the promotion of HVDC power solutions will also create new market opportunities.
6. Rational Consideration: Opportunities and Challenges Coexist Despite the broad prospects, investors still need to pay attention to multiple factors:
Certification Risks: The progress of NVIDIA Rubin certification has uncertainties, which will directly affect the company’s share acquisition in the high-end AI power market.
Capacity Realization: The construction cycle of the second phase of the Thailand factory is relatively long, and it is expected to be put into production only in 2027, making it difficult to contribute significantly to performance in the short term. If the capacity ramp-up does not meet expectations, it may affect order delivery and customer stickiness.
Intensifying Competition: Domestic peers like Shennan Circuit have already accumulated in embedded component technology, and industry competition may intensify margin pressure. At the same time, international PCB giants are also accelerating their layout in the AI power field, making market competition increasingly fierce.
Customer Concentration: The top three customers of the company account for about 72%, indicating high customer concentration. If there are fluctuations in large customer orders, it will have a significant impact on the company’s performance.
Cash Flow Pressure: With capacity expansion and increased capital expenditure, the company needs to balance investment pace and cash flow health.
7. Future Outlook: Technology-Driven Growth Path The long-term value of Zhongfu Circuit depends on its ability to successfully transform from a traditional PCB manufacturer to an AI power solution provider. This transformation requires three key support points:
• Breakthrough in Technology Certification: The progress of NVIDIA Rubin certification will determine the company’s eligibility for entry into the high-end market.
• Matching Capacity with Orders: The ramp-up speed of the Thailand factory’s capacity needs to match the rhythm of customer order introduction to avoid idle capacity or order loss.
• Commercialization of Embedded Technology: The application expansion of embedded component technology in three-level power supplies and vehicle “three electrics” systems will open up new growth spaces.
8. Conclusion: Waiting for the Bloom, Rationally Viewing Industrial Changes
In the tide of AI computing infrastructure construction, the PCB industry is undergoing profound changes. Zhongfu Circuit, with its technological accumulation and strategic layout, has positioned itself at the forefront of this transformation, but the path to growth remains full of challenges.
For industry observers, attention should be paid to the company’s technological R&D progress, customer structure optimization, and capacity release rhythm; for investors, it is necessary to rationally view the market’s high expectations for the AI industry chain and make prudent decisions based on their own risk tolerance.
As industry experts say: “Investment in the semiconductor industry chain requires both a gaze at the stars for technological faith and a grounded verification of performance.” Whether Zhongfu Circuit can achieve a dual leap in technological breakthroughs and commercial success in the niche field of AI power PCB remains to be seen by the market.
Risk Warning: This article is based on publicly available information analysis and is intended to provide industry research reference, not constituting any investment advice.
The performance forecasts, technological routes, customer collaborations, and other information mentioned in this article may have uncertainties, and actual developments may be affected by multiple factors such as market environment, technological iteration, and policy changes. Investors should make independent judgments, exercise caution in decision-making, and be aware of investment risks.
Disclaimer: All content in this public account is for reference only and does not constitute any securities investment advice. The market carries risks, and investments should be made cautiously. Readers act on this at their own risk.