Recently, Wanlian Securities released a research report stating that the development of industries such as artificial intelligence, servers, and storage is driving steady growth in the PCB industry's output value. The organization predicts that by 2027, the global PCB industry's output value will reach $98.388 billion.

Analysts pointed out that the development and application of cutting-edge technologies have increased the overall demand for AI servers, while the emergence of new generations of chip and memory technologies is creating more industry growth space in key component fields such as PCB.

Broad Industry Prospects

PCB, or printed circuit board, is a bridge that carries electronic components and connects circuits, and is an indispensable basic component of electronic information products. In short, chips, memory, and other components need to be installed on a PCB to achieve the desired functionality.

Compared with PCBs used in communications and consumer electronics, the PCBs used in AI servers need to have high-density wiring, high-speed signal transmission, low noise, and low interference. To meet the high computational speed requirements of AI servers, PCBs need to support high-speed and stable signal transmission to ensure the high efficiency and accuracy of data transmission between components.

"The difficulty in manufacturing AI server PCBs lies in the number of layers, the width of the traces, and the size of the holes, which are not related to the size of the PCB itself. However, the Chinese PCB industry is developed and mature, and producing AI server PCBs is not a problem," said Yang Xiaojun, Vice President of Beijing Zhongke Jing Shang.

China is the region with the largest global PCB output. Data from the Forward Industry Research Institute shows that China's PCB output value currently accounts for about 69% of the total global output value. Guojin Securities predicts that the AI server PCB market size is expected to reach RMB 7.9 billion by 2025.

Realizing Demand Takes Time

The industry prospects do not need to be questioned, but the market demand for AI server PCBs is not yet fully clear.

Yang Xiaojun pointed out that a mobile phone requires fewer PCBs than a typical server, but the former requires smaller PCBs, and the number of PCBs required for laptops and servers is about the same. "From the perspective of AI servers, the demand for PCBs is uncertain. If there are too many PCBs, the server will be faster, and if there are too few, it will be slower."

The market demand for AI server PCBs is also related to the overall technical level of the AI server industry chain.

"The company has the technology and strength to produce AI server PCBs, and is also doing so, but the quantity is relatively small. AI server

PCBs are a future trend in the development of PCBs, and the company also has relevant expansion plans, but the current market size is not that large. The demand for AI server PCBs is related to all aspects of the server industry chain and the overall technical level of the industry chain. When the technology becomes more mature, the market demand may be more clear. The landing of the PCB market demand side requires a process," said the person in charge of Pengding Holdings in response to an inquiry from a reporter from Securities Daily as an investor. According to the Prismark ranking of global PCB companies based on revenue, Pengding Holdings has been ranked as the world's largest PCB manufacturer for five consecutive years (2017-2021).

Shennan Circuit is also a leading company in the PCB industry. The company's 2022 annual report shows that its PCB business achieved main business income of RMB 8.825 billion, accounting for 63.06% of the company's total operating income. When asked, a Shennan Circuit spokesperson said, "In the entire server industry, the market share of AI servers is not high, and general-purpose servers are still mainstream. The PCBs produced by the company that are used in AI servers are only a small part. In addition to paying attention to market hotspots, investors should also consider multiple factors such as overall market demand and company fundamentals."

Small businesses need to stand firm in the fiercely competitive society, such as companies like ours, Bicheng Electronic Technology. It is even more necessary to understand the social development trends of the electronic industry. By timely understanding the actual needs of customers, we can better have our own brand and stable customer base in the ever-changing market, and maximize the company's benefits.

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Source: Securities Daily

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