Views: 0 Author: Site Editor Publish Time: 2024-06-28 Origin: Site
In the era of large AI models, the immense computational power required has sparked an unprecedented demand for high-performance computing chips, thereby "heating up" the market for AI servers. According to Trendforce data, the global shipment of AI servers reached nearly 1.2 million units in 2023, marking a year-on-year growth of 38.4%. The compound annual growth rate of AI server shipments from 2023 to 2026 is projected to be 19%. Domestically, IDC forecasts that China's market for accelerator servers will reach $12.4 billion USD by 2028.
Facing this global AI wave, not only are giants like NVIDIA reaping substantial profits, but opportunities are also emerging for companies along the AI server supply chain, including those producing printed circuit boards (PCBs) that host various electronic components. PCBs, known as the "mother of electronic products," play a crucial role in connecting electronic components and ensuring smooth electrical and signal transmission. They are widely used in consumer electronics, automotive electronics, AI, data centers, aerospace, and other fields.
AI servers require various forms of PCBs internally, typically including server motherboards, CPU boards, hard disk backplanes, power supply backplanes, and memory of different specifications. Compared to traditional servers, AI servers, designed for intensive tasks like deep learning and machine learning, require advanced GPU modules. This drives higher demands on PCBs for transmission speed, heat dissipation efficiency, and power management capabilities, thus increasing the value of PCBs.
The upgrade of AI service chips drives PCB upgrades and enhancements.
"With the upgrading of AI server chips, PCBs need to not only increase in layers, tiers, and integration but also optimize for transmission loss, design flexibility, and resistance capabilities, posing significantly high manufacturing challenges," according to Sheng Hong Technology. As chip advancements continue, HDI boards are also notably upgrading, significantly enhancing the value of AI server PCBs and creating new growth opportunities for the PCB industry.
Discussing the impact of AI functionalities on PCB demand, Peng Ding Holdings noted in institutional research that while AI functionalities initially drive demand from the software end, deeper software applications will subsequently elevate hardware technology requirements, including further advancements in PCB material, precision, and heat dissipation capabilities. This symbiotic progression is seen as beneficial.
Estimates by Guojin Securities suggest that the PCB value of AI servers is 5-6 times that of regular servers. With the deployment and applications of AI models growing, the demand for AI servers is steadily increasing, thus expanding market capacity. "The consensus in the market is that AI server demand is driving a new round of growth in the PCB industry," as highlighted by Fangzheng Securities.
The PCB industry is expected to grow by approximately 5% in 2024, reaching a global server PCB market size of $16 billion USD by 2026, indicating vast market potential. Recent market trends have kept the PCB concept actively engaged, with companies such as Yihao New Materials, Mankun Technology, Cohesion Electronics, Peng Ding Holdings, and Kexiang Shares seeing over 40% increases in recent months. These companies have also disclosed recent order statuses and business layouts in the AI server domain.
The order status of the listed company.
In response to investor queries, Zhongjing Electronics stated that their HDI orders are currently relatively full, and they plan to expand production capacity gradually to meet market demand increments through product architecture optimization or project technological upgrades. Guanghe Technology confirmed ample current orders on hand, while Chao Sheng Electronics reported recent increases in orders compared to previous periods.
Shengyi Electronics disclosed on interactive platforms that they have successfully developed multiple server clients, with AI-compatible motherboard and accelerator card projects already in mass production. Looking ahead, they anticipate continued growth in their AI server projects throughout 2024. Huadian Corporation mentioned that "some of the company's PCB products are applied in AI-related fields."
Recently, when asked about entering NVIDIA's supply chain, Siyuan Circuit responded that they have already mass-produced PCB products for top-tier AI server clients and are collaborating on developing next-generation products. AI server-related PCB products are a key area of current and future performance growth for the company, with a continually expanding customer base.
Chongda Technology indicated on interactive platforms that they currently mainly produce 8-12 layer HDI boards in 2-4 tiers, primarily supplying high-multi-layer PCB boards to AI server clients. The company also revealed that their supplied PCB products are used in an AI PC terminal.
According to Bom Electronics, the company's current server board usage mainly focuses on traditional high-end server PCBs. With the momentum from the AI wave, the company recognizes significant growth potential in the computational PCB market, having strategically positioned themselves since last year. They have already commenced small-scale production of the previous generation of computational acceleration card PCBs.
The expansive market outlook continues to attract PCB manufacturers to increase their investments and research and development in HDI technology to meet future AI field demands. For instance, Jingwang Electronics is constructing a project for manufacturing 600,000 square meters of HDI printed circuit boards annually. Media reports indicate that photonic board giants are intensifying efforts in AI PC, with planned capital expenditures of NT$2 billion in 2024 for expanding HDI board production.
At the beginning of 2024, Hudian Corporation resolved to invest approximately RMB 510 million to implement a high-density and high-speed interconnect printed circuit board production line technological upgrade project aimed at computational network capabilities. The project aims to enhance the HDI tiers and layers of products, improving the quality stability and reliability of related products.
A Sheng Hong Technology securities department employee, speaking to a Caijing reporter in an investor capacity, stated that "since the third and fourth quarters of last year, there has been some recovery downstream, and now it is even better than before. We have started to pick orders to work on." The HDI sector has been relatively full for over six months, with AI computational demands significantly occupying the company's overall HDI capacity, beyond consumer-oriented needs.
AI and new energy vehicles drive the revival of the PCB industry.
Recently, the PCB (Printed Circuit Board) sector has remained active, with stocks such as Concord Electronics and Kexiang Corporation showing significant gains. According to a survey by Shanghai Securities News, several industry companies attribute this to factors like rising upstream raw material costs (including copper, sheet metal, and metals), robust demand in AI and new energy vehicles, and manufacturers already increasing prices due to full order books.
PCBs, often termed the "motherboards" of the electronics industry, are essential substrates for electronic components, providing support and electrical connections, making them fundamental to nearly all electronic devices.
The price hikes in PCBs are primarily driven by the increased costs of raw materials. Materials directly account for over half of PCB costs, including over 30% for copper-clad laminates (CCL), around 9% for copper foil, approximately 6% for solder balls, and about 3% for gold salt ink, among others.
This year, copper prices have sharply risen, and there's been a recovery-driven increase in electronic fiberglass prices, leading to continuous price hikes in copper foil substrates (CCL) since March, with each board increasing by 5 to 10 yuan. Currently, PCB manufacturers are passing these increases downstream.
The resurgence in demand downstream, especially from the consumer electronics sector and the sustained demand for new energy vehicles, is crucial. Additionally, AI is emerging as a new growth driver, with strong demand for AI servers and AI optical modules driving demand for related PCBs. Products like high-density interconnect (HDI) boards and multi-layer boards for AI applications are expected to see continued strong demand in the second half of the year.
Some downstream manufacturers report tightening supplies of certain PCB varieties. For instance, LITEON has indicated supply tightness due to major raw material price increases, potentially leading to longer delivery times if this situation continues.
First-quarter results from listed companies already reflect signs of recovery in the PCB industry, showing a robust "non-peak season" trend. Analysts at Fangzheng Securities attribute this to demand recovery and ongoing structural optimizations by major manufacturers.
Industry insiders predict significant growth in the market for HDI boards, projecting a market size of $14.58 billion by 2027, with a compound annual growth rate of 6.2% from 2023 to 2028, higher than the industry average.
Various listed companies have responded to these dynamics. For example, Chongda Technology reported accelerated order growth in the server industry. They are expanding capacity, particularly in high-end products such as high-density multi-layer PCBs and HDI boards.
Overall, with AI's explosive demand and other emerging factors, the PCB sector's outlook remains promising, attracting increased attention from investors towards related listed companies and their latest operational dynamics and order situations.
