Benefiting from the low base and full digestion of inventory levels in 2023, the PCB industry has basically bottomed out and is expected to rebound for some time to come.

According to the consulting agency's forecast, in the five years from 2023 to 2028, the PCB market will have a compound annual growth rate of 11%, far exceeding other segmentation scenarios. This growth is mainly driven by demand for data centers, high-performance computing, and AI.

In this context, leading manufacturers such as Dell, HP, Inspur and other ODMs, including Nvidia and AMD, will develop relevant important components themselves and become the main demand parties in the market.

Judging from the product form, the main ones that will benefit from this trend are high-level multi-layer hard boards and high density interconnect (HDI) boards.

Because high multi-layer boards can support more complex communication capabilities and server data processing capabilities, demand will grow as the number of layers and design difficulty increases, providing a better physical foundation for AI and related technologies.

The application of HDI boards in fields such as accelerator cards shows that their design occupies an important position in the industry.

In addition, flip-chip ball grid array (FCBGA) type packaging substrates will also benefit from the demand for chip packaging with a large backplane area.

Compared with other types of substrates, FCBGA is more suitable for matching components such as CPUs and GPUs to meet the needs of servers and AI servers, which means that the requirements for FCBGA packaging substrates will increase more and more.

In response to the technical requirements of servers and AI server motherboards, the number of current trend display layers needs to be raised to 24-28 layers, and the line width clarity needs to be increased from 4 mm to 3.5 mm.

Material selection and grade requirements have also increased, reflecting the industry's quest for higher performance and reliability. These indicators of technological progress reflect the development of the industry towards high-end products.

Guojin Securities released a research report saying that PCBs set the tone for restorative growth throughout the year, and it is recommended to focus on the boom in high-speed communication and the localization of carrier boards.

2023 is a year to fully absorb weak demand. After this full year of adjustment, cyclical pressure will be released, and 2024 will be a year of repair. According to CPCA quoted data forecasts, global PCB output is expected to resume growth in 2024, and the increase is expected to reach 4.1% year-on-year.

Once the cycle pressure is relieved, the bank believes that the growth of PCBs will also be highlighted. In terms of segmentation, the bank is still optimistic about the opportunities for high-end PCB board expansion and domestic replacement of packaging substrates brought about by high-speed communication.

Anxin Securities released a research report saying that with the development of AI servers and other technologies, demand for high-speed PCBs will further increase, and high-speed PCBs will become an important part of the future electronics industry. Currently, high-speed PCBs are widely used in data center switches, AI servers, and automotive intelligence.

Hong Kong stock related concept companies:

Jiantao Laminated Board (01888): The company is a leading manufacturer of vertically integrated electronic materials in the industry, focusing on the production of copper-clad panels. According to a research report by third-party consulting firm Prismark Partners LLC, the company has been ranked number one in the global copper-clad panel market for 15 consecutive years. The vast majority of Jiantao Laminate's revenue comes from the copper-clad panel business. The business contributed HK$7.91 billion in revenue in the first half of 2023, accounting for nearly 98% of the company's total revenue, which is a veritable pillar of revenue.