The Zhitong Finance App learned that China Merchants Securities released a research report saying that the PCB sector experienced a rebound in August, and the market is paying more attention to the fundamentals of the industry and the evolution of industrial technology. At the beginning of August, the valuation levels for the main targets of PCB and CCL were in a configurable range with a high win rate based on historical experience. Industry fundamentals are strong, short-term quarterly results have the potential to exceed expectations, and new structural changes and application prospects of new technology bring room for improvement in long-term results. After a rebound in early August, the current valuations of PCB and CCL core standards have all partially increased. Looking ahead, the bank is generally optimistic about the continuation of this round of rebound.
The main views of China Merchants Securities are as follows:
Short-term fundamentals have the potential to exceed expectations
Entering the second week of August, the PCB industry chain will successively disclose interim results and conduct performance exchange meetings. In the field of computing power, North American AI servers (new ASIC architectures such as Rubin, Google, and AWS for NV) are in the peak season for new product collection, and the utilization rate of new high-end production capacity is gradually being fully loaded, bringing flexible profit margins to the Q3-Q4 quarter; in addition, the continued interpretation of PCB inflation logic in the non-AI field in Q3 will also lead to an improvement in gross margin, and there is room for profit improvement. Therefore, the bank believes that the performance of the PCB industry chain Q3-Q4 performance is still poor as expected by the market.
New technology and new architecture are expected to boost the PCB sector's long-term growth space
According to the bank's current information tracking the industry chain: 1) New changes in the Rubin Ultra architecture: VRunVL576's OberonRack layout was adjusted from “10+9+8” to “9+18+9,” the number of NVLink Switch trays in the middle doubled from 9 to 18, and the height of a single exchange tray was compressed from 1.5U to 0.75U; the expandable version (NPO) Switch Tray's NVLink Switch ASIC was increased from 2 to 4. Integration and design complexity have increased dramatically, and related CCL materials are expected to be further upgraded to M9 grade or PTFE solutions, and the number of layers of PCB boards is also expected to increase further. 2) mSAP application scenarios are expected to expand: With large-scale mass production of 1.6T optical modules this year, its PCBs use a 6-stage msapSLP design scheme, and the supply of MSAP production capacity in the PCB industry has become extremely tight. Looking ahead to '27, HW's computing boards, UHDI, Rubin's SoCAMM memory cards, and vertical power supply boards for triple power supplies will also be manufactured using the MSAP process, and more long-term CoWop packaging technology will also use the MSAP process extensively. This shows the trend of PCBs being upgraded from Tenting to MSAP in the AI field. Pan-semiconductorization upgrades are expected to increase the overall value of PCBs in AI system equipment. 3) Other new technologies: a) Ceramic substrate technology: Considering the drastic increase in power consumption of a single GPU, the cooling demand for PCB boards is also increasing. The necessity and feasibility of adding ceramic substrates to the computing board has received attention from the industry and market. The development progress of the industry chain has been smooth and is expected to become an optional solution version next year; 2) Embedded PCB technology: Continued improvement in integration, passive components and power devices are expected to be embedded in PCBs, and both process difficulty and value are expected to increase dramatically. Therefore, the bank believes that the PCB industry chain will still be catalyzed by more predictable technological iterative upgrades in the future, and the sector is also expected to usher in a “double attack from Davis.”
Investment advice
In summary, 1) In terms of CCL, the focus is on recommending “Shengyi Technology”, which is progressing beyond expectations in AI computing power (S8/S9/S10/S11, PTFE) and advanced sealed board substrates (SIF) this year, as well as focusing on “Nanya New Materials, Huazheng New Materials”, etc. 2) On the PCB side: Focus on recommending [Jingwang Electronics] [Pengding Holdings], which has large marginal changes in overseas computing power boards and optical modules, and [Shennan Circuit], which also has the “AI computing power board+mSAP+ carrier board” triple upward logic, and focus on [Shenghong Technology] [Shanghai Electric Power Co., Ltd.] [Shengyi Electronics] [Xingsen Technology] [Kexiang Technology (Ceramic Substrate HDI)] [Zhongfu Circuit (Tertiary Power Board)] [Guanghe Technology] [Fangzheng Technology], etc. 3) In terms of upstream raw materials, AI demand is driving the accelerated upgrading of CCL from M7 and M8 to M9 and M10 levels, driving demand for high-end main materials, and the production capacity gap continues to be tight. It is optimistic that [International Composites], [Honghe Technology] [Sinoma Technology] [China Jushi] [Feilihua]; HVLP copper foil and carrier copper foil have accumulated technology and production capacity [Defu Technology] [Baoding Technology] [Copper Crown Copper Foil] [Longyang Electronics], etc.; M9 materials will use more hydrocarbon resins, focusing on the growth potential of [Dongcai Technology]; the iterative upgrading of high-end spherical powders and the acceleration of domestic substitution , follow [Lianrui New Materials], [Ling Wei Technology], etc.; focus on the electroplating solution process, focusing on [Tiancheng Technology]. 4) In terms of equipment, laser drilling machine and back drilling rig manufacturer [Dazu CNC], LDI exposure machine manufacturer [Chipset], VCP electroplating equipment manufacturer [Dongwei Technology] [Taijin Xinneng], drill needle manufacturer [Dingtai Hi-Tech], laminator manufacturer [Heduan Intelligence (owns part of German Raffa shares)], etc.
Risk warning: Macroeconomic sentiment has declined, demand for AI data centers falls short of expectations, industry competition has intensified, technological innovation iterations have fallen short of expectations, capacity expansion has fallen short of expectations, and trade frictions have intensified.