1. Capacity Transfer
Driven by the “China + 1” strategy, A-share PCB companies are accelerating their layout in Southeast Asia, creating dual opportunities for equipment exports and capacity expansion. Shenghong Technology plans to invest $260 million to build a high-precision PCB project in Vietnam, producing high-layer count boards and HDI boards, with an expected monthly production capacity of 150,000 boards after reaching full capacity in 2026, significantly increasing procurement demand from equipment suppliers like Dazhong CNC and Dongwei Technology. Chongda Technology has raised its total investment in Southeast Asia to 1 billion yuan, focusing on a production base in Thailand, where its partners, including H3C and StarNet, have clearly expressed the need for overseas capacity support.
Shennan Circuit’s project in Thailand has a total investment of 1.274 billion yuan, focusing on automotive electronics and server PCB production, benefiting from ASEAN’s zero-tariff policy (covering 80% of electronic products), which can save 10-15% in tariff costs for products exported to Europe. Junya Technology’s 300 million yuan project in Vietnam focuses on high-layer count boards, expected to enter mass production in 2025, becoming an important foothold for the company to connect with North American data center customers. According to Prismark’s forecast, by 2025, 25% of the world’s top 100 PCB manufacturers will have factories in Southeast Asia, increasing the overseas revenue share of A-share equipment manufacturers from the current 15% to over 30% by 2027.
Although the layout in Southeast Asia faces short-term challenges, its long-term strategic value is significant. Despite the supply chain support rate in places like Vietnam and Thailand being only 60% of that in China, labor costs are 30% lower than in China, and the advantages of avoiding geopolitical risks are evident. A-share equipment manufacturers have already made early arrangements, with Dazhong CNC establishing an after-sales center in Thailand and Dongwei Technology signing a strategic cooperation agreement with a PCB industrial park in Vietnam. These proactive measures will ensure they seize opportunities in the wave of capacity transfer.
2. Trend Towards High-End Products
High-end products such as HDI, packaging substrates, and automotive electronics have become the growth engines of the PCB industry, opening up growth space for related A-share companies. The global HDI market is expected to reach $13.8 billion in 2024 and grow to $17 billion by 2029, with a CAGR of 6.4%. Pengding Holdings (002938), as a leading PCB company in A-shares, is investing 8 billion yuan to build a high-end HDI and SLP (substrate-like) production base in Huai’an, with its SLP products already applied in Apple’s AR/VR devices, achieving a yield rate of 92%, which is 8 percentage points higher than the industry average.
In the packaging substrate field, the global market demand is expected to recover moderately in 2024, with Pengding Holdings’ packaging substrate business revenue reaching 3.171 billion yuan, a year-on-year increase of 37.49%. Its 16-layer and below FC-BGA products have achieved mass production, and 20-layer products have passed client certification, likely entering NVIDIA’s GPU packaging supply chain. According to Prismark’s forecast, the global packaging substrate output value growth rate will reach 18% in 2025, with Chinese manufacturers’ market share expected to increase from the current 15% to 25% by 2027.
Automotive electronics have become the second growth curve for the PCB industry. The PCB value per vehicle for traditional cars is about 500 yuan, while for smart electric vehicles, due to the demand for ADAS and smart cockpits, the PCB value per vehicle exceeds 2000 yuan. Shiyun Circuit is deeply engaged in the automotive PCB field, with related orders for new energy vehicles expected to grow by 55% in 2024, entering Tesla’s 4680 battery supply chain. Huidian Co.’s automotive board revenue share has increased from 20% in 2020 to 35% in 2024, with its 8-layer and above automotive radar PCB products achieving a yield rate of 90%, supplying Tier 1 manufacturers such as Bosch and Continental Group.