CITIC Construction Investment: The global PCB industry welcomes a new round of recovery, high-end material upgrades drive the localization of the industrial chain
The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that benefiting from AI, the global PCB industry has ushered in a new upward cycle. With the demand for orthogonal backplanes and the upgrade of the Cowop process, future PCBs will be more similar to semiconductors, and their value will steadily increase. Self-developed chip design capabilities such as Meta (META.US), Amazon (AMZN.US), and Google (GOOGL.US) are weaker than Nvidia (NVDA.US), so the requirements for materials such as PCBs are higher and the value is more flexible. As the requirements for short-distance data transmission continue to increase, PCBs continue to be upgraded, and the upstream upgrade of the industrial chain is being upgraded from M6/M7 to M8/M9. Along with the continuous increase in the global share of domestic PCB companies, it also drives the localization of the upstream industrial chain, starting with copper-clad plates, and further increasing the domestic share of upstream high-end resins, glass fiber cloth, copper foil, etc.
The original text is as follows:
AI drives PCB demand upgrade, and photosensitive dry film accelerates high-end and localization
Photosensitive dry film is a film material that solidifies when exposed to ultraviolet light. It is mainly used for circuit transfer printing during PCB manufacturing.
The global PCB and packaging substrate industry has entered a structural growth cycle driven by AI servers, data centers, and high-speed network equipment. The compound growth rate is 7.7% in 2025-2030, and demand for high-multilayer boards, HDI, and packaging substrates is relatively fast. The compound growth rate is expected to be 8%, 9.2%, and 10.9% respectively in 2025-2030, while demand for traditional consumer electronics, ordinary single and double panels, and general FPC is growing relatively slowly. The compound growth rate is expected to be 2.8% and 3.8%, respectively.
In the future, the core increase in photosensitive dry film will mainly come from high-end scenarios such as server/data storage and AI PCBs, rather than traditional electronics such as mobile phones and home appliances. This will increase the average price and usage of photosensitive dry film products, mainly due to:
1. Increased usage: Traditional servers are generally 12-26 layers of CPB, while AI servers generally have 22 or more layers of HDI and 30 layers of high multi-layer boards. The maximum number of layers can reach 24-78 layers, and may continue to increase to 80 layers or more. Each layer of the multi-layer board requires exposure, projection, and etching. The number of graphic transfers will increase accordingly, and the amount of photosensitive dry film used will also increase significantly;
2. Unit price increase: Mainly due to increased requirements for resolution and yield. In terms of resolution, as line width and line spacing evolve from about 4 mil to 3.5 mil and finer, high-end photosensitive dry films require higher resolution, adhesion, etc., and the performance requirements are significantly improved. In terms of yield, due to the large area, high number of layers, and high value of AI PCBs, single-layer circuit defects may cause the entire board to be scrapped, so yield requirements have increased.
In line with the development trend of the PCB industry, the bank expects the total market space for photosensitive dry film in 2026-2030 to be 95, 104, 113, 124, and 13.6 billion yuan, respectively, corresponding to a compound growth rate of about 9.4% in 2025-2030. Among them: (1) single/double panel, FPC: product homogenization and price competition are intense. Demand is expected to grow moderately with ordinary electronic products such as mobile phones and home appliances, corresponding to a CAGR of about 3% in 2025-2030; (2) Multi-layer boards: AI will drive 18 or more layers and 30 layers The above products are growing rapidly, and the dry film unit consumption is expected to increase. The growth rate is expected to be higher than that of multi-layer PCBs, corresponding to the 2025-2030 CAGR; (3) HDI: Driven by internal dry film replacing wet film, LDI penetration, and high-resolution product upgrades, the growth rate is expected to be higher than that of multi-layer board PCBs, corresponding to the 2025-2030 CAGR of about 11%; (4) IC boards: AI GPUs, ASIC, server CPUs and advanced packaging will drive the growth of ABF/BT substrates, while large size, multi-layer, and fine electroplating increase the dry film The value is expected to be the fastest growing photosensitive dry film category, corresponding to the 2025 to 2030 CAGR of about 12%;
The share of domestic manufacturers continues to increase, and multiple factors favor domestic replacement of photosensitive dry film
Since 2023, sales of photosensitive dry film products from domestic manufacturers represented by Chuyuan New Materials and Foster have continued to grow rapidly. Chuyuan Xincai's sales volume of photosensitive dry film in 2023-2025 was 2.16, 2.70, and 348 million square meters respectively, with year-on-year growth rates of 2.56%, 25.24%, and 28.61% respectively. Foster's 2023-2025 photosensitive dry film sales volume was 1.15, 1.59, and 189 million square meters respectively. The year-on-year growth rates were 4.52%, 37.97%, and 18.67% respectively. The industry's growth rate during the same period. Looking ahead, the bank anticipates that the trend of localizing photosensitive dry film will continue. The main consideration is that leading PCB companies have begun to use domestic dry film in batches. At the same time, downstream PCB production capacity is concentrated in China, providing many opportunities for the introduction of domestically produced photosensitive dry films.
Risk Alerts
1. The risk that terminal demand falls short of expectations. The boom in the PCB industry and downstream demand for AI servers, high-end HDI, and encapsulation boards fall short of expectations, which may cause sales of photosensitive dry film, product structure upgrades, and profit improvements to fall short of expectations; PCB market growth is also clearly structured. Demand for traditional consumer electronics and ordinary PCBs is weak, and industry growth dividends may be mainly concentrated in a few high-end suppliers.
2. The risk that product development and quantity fall short of expectations. High-end photosensitive dry film requires high resolution, adhesion, electroplating resistance and process adaptability, and the customer verification cycle is long. If Foster's introduction and release progress in server PCB and carrier board customers falls short of expectations, or if Chuyuan New Materials's R&D results in high-end fields such as IC carrier boards do not turn out smoothly, it may affect revenue growth and gross margin increase.
3. The risk of increased market competition. Overseas and Taiwanese leaders still have technical, brand, and customer certification advantages in high-end markets. Accelerated production expansion by domestic manufacturers may intensify price competition for general products, leading to downside risks in average prices and unit profits. If orders are insufficient after the new production capacity is put into production, it may also lead to a decline in capacity utilization and an increase in depreciation pressure.
4. Risk of fluctuations in raw material prices. Fluctuations in raw material prices, falling short of expectations in self-supply of core raw materials, fluctuations in demand from major customers, overseas market expansion, and changes in trade policies may all adversely affect the operating performance of the two companies' photosensitive dry film business.