Artificial intelligence, the PCB's next vent？

PCB is known as the printed circuit board, also known as the printed circuit board, as an indispensable key interconnection in electronic products, is also known as the "mother of electronic products." PCB is widely used in home appliances, consumer electronics, computers, communication equipment, automobiles and many other fields.It is precisely because of its strong application that it intensifies the internal volume of the industry. 

The overall prosperity of the PCB industry has declined significantly since the fourth quarter of 2022, failing to continue the high growth trend in 2021. Next, the industry has to re-enter a new growth trajectory.

Four driving forces

High-end mobile phones at the same time pull the demand for PCB.

According to IDC data, in the first half of 2023, China's foldable screen mobile phone market shipments were 2.27 million units, an increase of 102%. This means that the mobile phone market tends to be "high-end", and the folding screen mobile phone will increase the demand for high-end PCB categories.

The boom in AI also presents structural opportunities for the industry.

From the material point of view, the higher the signal frequency, the greater the PCB transmission loss, and the selection of copper clad plate materials will use ultra-low loss materials, thereby enhancing the overall value of PCB.

Compared with traditional servers, AI server PCB is mainly added to the GPU board group; At the same time, the AI server has high transmission rate requirements, needs to use 20-30 layers of HDI board, and will use ultra-low loss materials in the material selection, and its value will be further improved.

According to Prismark forecast, the output value of server PCB in 2026 is expected to reach $12.5 billion, and the compound growth rate of 21-26 years is as high as 9.87%.

Robot products also need a large number of flexible, bendable, high-precision demand scenarios, need to use FPC (flexible circuit board) and other products.

The trend of automobile electrification/intelligence is clear, which promotes the increase of PCB volume and price.

Electrification: Electric vehicle new electric drive system, including VCU, MCU and BMS, three modules need to use PCB.

The PCB usage of new energy vehicles is 5-8 square meters/car, which is significantly increased compared to 0.6-1 square meters/car of traditional fuel vehicles.

At the same time, the electric drive system architecture is complex, and the PCB process is very demanding, and the multi-layer board with better stability is generally used, and the monomer value is higher.

Intelligence: The increase in the penetration rate of intelligent cockpit and autonomous driving will significantly increase the consumption of PCB on the one hand, and will also increase the demand for high-value products such as HDI on the other hand.

According to Prismark data, it is expected that by 2026, the global automotive PCB output value is expected to reach 12.8 billion US dollars, and the compound growth rate of 21-26 years is 7.91%.

Figure: Global automotive PCB output value and year-on-year growth rate ($100 million)

Industrial chain

The upstream PCB is mainly a commodity, and the downstream includes thousands of industries.

In the PCB industry chain, the upstream is copper foil, glass fiber cloth, wood pulp paper, synthetic resin, etc., and the middle reaches are copper clad plates and PCB.

Among them, copper clad plate is the upstream of PCB, is an important part of PCB raw materials, and the downstream is communication equipment, semiconductors, computers, automotive electronics, consumer electronics, industrial control, aerospace, data centers, etc., with a wide range of applications.

In the process of shifting the global industrial center to Asia, China has become the global manufacturing center of PCB.

Data show that since 2006, China has officially surpassed Japan to become the world's largest PCB production base.

In 2022, the total output value of China's PCB industry has reached 44.2 billion US dollars, accounting for 54.1% of the world.

In recent years, as more enterprises increase technology research and development and industrial investment, the cluster advantage of China's PCB industry is more obvious, and many PCB manufacturers have formed their own competitive advantages and bargaining power in various segments.