Zheshang Securities Co.,Ltd. reports that AI computing power is reshaping the demand structure of the PCB industry, with high-frequency and high-speed PCBs significantly outperforming the broader market. The robust growth trajectory for high-end PCB demand is expected to persist, driven by the escalating performance requirements of AI-driven hardware.

This performance upgrade cascades upstream, pushing copper foil, electronic fiberglass cloth, resin, and spherical silica powder toward advanced specifications. Consequently, domestic supply chain players are likely to see enhanced market share and profit margins. With effective capacity remaining tight, price revaluation is underway, unlocking earnings elasticity across the value chain. The brokerage suggests focusing on industry leaders in electronic fiberglass cloth, electronic copper foil, resin, spherical silica powder, and copper clad laminate (CCL).

AI is fundamentally altering PCB demand, ensuring robust growth for high-layer-count products. The global PCB market is back on an upward trajectory, with high-frequency, high-speed boards clearly outperforming. According to Prismark, global PCB output is projected to reach $85.152 billion in 2025 and could climb to $123.348 billion by 2030, reflecting a compound annual growth rate of 7.7% from 2025 to 2030. In 2026, output growth for multi-layer boards with 18 or more layers, HDI, and packaging substrates is expected to hit 79.0%, 23.0%, and 28.8%, respectively. The evolution of AI servers from standalone units to rack-level systems, coupled with switches upgrading to 800G/1.6T and optical modules iterating to 800G/1.6T, continues to drive demand for PCBs with higher layer counts, larger dimensions, high-density interconnect, and low loss. Propelled by AI-driven compute hardware upgrades, high-end PCB demand is set to maintain rapid growth.

High-end CCL materials are upgrading in tandem, with domestic substitution unlocking growth opportunities. PCB performance enhancements are transmitting upstream, leading copper foil, electronic fiberglass cloth, resin, and spherical silica powder to move toward higher-end applications. High-speed, high-frequency scenarios are prompting CCL to evolve from mid-to-low loss grades to even lower loss levels, increasing the utilization of HVLP copper foil, low-dielectric and low-expansion fiberglass cloth, high-performance resins like PPO/OPE, and spherical silica powder. This shift toward advanced materials is spurring supply chain expansion, potentially recalibrating product portfolios and market shares among suppliers. As local manufacturers advance customer qualifications, expand high-end effective capacity, and bolster stable mass production capabilities, the domestic supply chain is positioned to gain market share and improve profitability.

With effective capacity constraints, price revaluation is imminent, releasing earnings potential across the chain. This current price hike is more attributable to structural supply-demand mismatches driven by AI demand. High-end electronic fiberglass cloth and copper foil are constrained by equipment lead times, process yields, and customer certification cycles, meaning new nominal capacity cannot swiftly translate into effective supply, thereby supporting prices and processing fees. The resin and CCL sectors, meanwhile, are witnessing product differentiation and staggered transmission. When downstream demand surges before upstream expansion completes, significant pricing power emerges, allowing upstream suppliers to capture premium margins. Industry leaders with proven high-end product mass production capabilities, core customer certifications, capacity realization, and cost pass-through ability are ideally positioned. Following the cadence of downstream AI demand expansion and new product launches, these players are poised for transformative growth.

Key areas and companies to watch include: electronic fiberglass cloth – Honghe Technology, Chongqing Polycomp International, Sinoma Science & Technology, and China Jushi; electronic copper foil – Defu Technology, Tongguan Copper Foil, Hailiang Co., Ltd., Zhongyi Technology, Nuode Investment, and Baoding Technology; resin – Dongcai Technology and Shengquan Group; spherical silica powder – Lianyungang Lianrui New Materials and Lingwei Technology; and copper clad laminate – Shengyi Technology, Nanya New Material Technology, Huazheng New Material, and KB Laminates.

Risks include weaker-than-expected AI capital expenditures and end-market demand, delays in high-end material certifications or capacity ramps, oversupply from concentrated new capacity releases, fluctuations in raw material and product prices, and intensified industry competition.