The Zhitong Finance App learned that Zhongtai Securities released a research report saying that against the backdrop of an exponential jump in AI computing power consumption, ceramic substrates are being upgraded from traditional packaging materials to the core requirements of computing power hardware. Among them, aluminum nitride (AIN) substrates have become a key substrate material for power semiconductor device heat dissipation and circuit carrying with comprehensive advantages such as excellent thermal conductivity, suitable thermal expansion coefficient, low dielectric loss, and good mechanical properties. The global AIN board presents a competitive pattern dominated by Japan and China catching up. Domestic companies are facing historic replacement opportunities and are speeding up the construction of a “powder-substrate-metallization” vertical integration layout.
The main views of Zhongtai Securities are as follows:
Demand side: The four major scenarios in the AI industry chain resonate, driving the volume and price of AlN substrates to rise sharply
① High-speed optical module: 800g began introducing AlN materials, which became mandatory in 1.6T. Typical products include ceramic substrates and TEC cooling sheets. According to estimates, the total demand for AIN substrates in 2026 and 2027 (including ceramic substrates for TEC cooling sheets) was 594 and 896 million pieces, respectively, up 50.84% year on year in 2027; corresponding market sizes were 750 million US dollars and 1,318 million US dollars respectively, up 75.73% year on year in 2027. Following the gradual large-scale implementation of 3.2T and higher speed optical modules, the demand for chip cooling in the computing power scenario will further increase, and the AIN substrate market space is expected to continue to rise.
② CPO co-packaged optics/NPO near-package optics: High-density integration of optical engines and exchange/computing chips brings serious thermal crosstalk. TEC refrigeration sheets are the core solution for accurate temperature control of lasers. AlN substrates are essential core substrates for TEC sandwich structures, and demand is expected to increase in new scenarios.
③ GPU-HBM thermal management: The increase in the number of HBM stacks causes hot spots to be concentrated and heat dissipation paths are limited. TEC active cooling has become a key solution to break the hot spots of stacking. As a TEC core structural material, AlN substrates are expected to fully benefit from this trend.
④ PCB/ceramic HDI mixing: The power consumption of computing power chips continues to break through the performance boundaries of traditional materials. The industry currently uses HDIPB+ partially embedded ceramic substrate mixing scheme. Currently, in AI server boards, the replacement ratio of ceramic substrates to traditional PCBs is close to 30%. They are mainly partially used in high heating areas such as GPU bottom and orthogonal backplanes. As chip power consumption increases, the replacement space will continue to expand
Supply side: rare earth control accelerates local integration, overseas barriers in high-end markets are loosened, and domestic enterprises have ushered in a good opportunity to enter
The global AIN board presents a competitive pattern dominated by Japan and China catching up. Japanese companies dominate the high-end market with advantages in various aspects such as powder, sintering, and metallization. Kyocera, Maruwa, and Nippon Precision Ceramics have a monopoly on more than 80% of high-end DPC substrates; domestic manufacturers have achieved large-scale supply in the middle- and low-end substrates field, and are currently accelerating their breakthrough into the high-end market.
Under rare earth control, AIN powder becomes a stuck neck link
Upstream powder is the core that determines the performance of the substrate. Oxygen content, impurities, and particle size directly affect the thermal conductivity of the finished product. High-end AlN powder has long been monopolized by Japanese and American companies. Japan's Tokuyama accounts for more than 70% of the world's high-end powder share, and overseas accounts for 90% of the high-end powder market. Yttrium oxide is an essential rare earth additive for AlN sintering. Affected by domestic medium and heavy rare earth export controls, overseas manufacturers are facing supply cuts and extended delivery times of raw materials, and production capacity release is limited. Domestic companies are facing historic replacement opportunities and are speeding up the construction of a “powder-substrate-metallization” vertical integration layout.
Key stocks
The aluminum nitride industry chain covers upstream high-purity powders and midstream electronic ceramic products (including bare plates and metallization). Currently, a few leading companies have completed the entire chain to achieve a vertical integration layout. Focusing on the above industrial chain links and technological evolution trends, it is recommended to focus on: 1) Powder-metalization-substrate integration targets: China Porcelain Materials, Asahi Optoelectronics; 2) Emerging players of aluminum nitride powder: Jinbo Co., Ltd.; 3) Leading manufacturers of DPC carriers, optical communication substrates and tube shells: Fuller, China Porcelain Electronics; 4) Main manufacturers of ceramic-hybrid PCBs: Kexiang Co., Ltd.
Risk warning: Downstream demand falls short of expectations, risk of technology iteration and route substitution, increased industry competition, rare earth export policy uncertainty, third party data distortion and information lag, risk of deviation in data results measurement