Printed Circuit Board Industry Daily
A total of 6 industry-related news items - 3 in-depth analysis of selected items
Selected In-depth Analysis
Two major AI chipset camps are poised for development, and the capacity of ABF carrier boards of Shin Shin, Pegatron and NDT is sold out.
Key Events
Strong demand from NVIDIA and AMD's AI chipset camps has driven Taiwan's three largest ABF carrier board makers, Unimicron, Pegatron, and Nortel, to run out of capacity, and the imbalance between supply and demand continues to deteriorate as demand for high-end ABF carrier boards for AI server chips surges.
Key Data
Taiwan's ABF carrier board manufacturers accounted for the global market share of about 50%, AI server chips compared to traditional server demand for ABF carrier board increased by 30-50%, unit price increase of about 20-40%. 2024 global ABF carrier board market size is expected to reach 15 billion U.S. dollars.
Market Importance
The simultaneous explosion in demand for AI chips has confirmed the key position of Taiwan's ABF carrier board manufacturers in the new round of AI infrastructure. This wave of sold-out capacity reflects the accelerated deployment of AI servers, which is not only a short-term shortage, but also represents the structural demand for high-end substrates due to the upgrading of the entire computing architecture. With the technological threshold and capacity advantage, Taiwan manufacturers will enjoy a super cycle of rising volume and price in the AI wave in the next 2-3 years, laying a long-term competitive moat.
⚠ Negative View
Sold-out capacity may reflect insufficient expansion rather than a real burst of demand, and supply and demand may quickly reverse to a surplus in the second half of 2025 when new capacity starts up at each plant, and then the price war may repeat itself.
📍 Next observation.
- Q1 ABF Carrier Revenue and Gross Margin Performance
- Capital Expenditures and Production Expansion Schedules for 2024 Announced by Factories
- New ABF production capacity start-up progress and yield ramp-up.
- AI Chip Customers' 2025 Purchase Plan Changes
- Next-Generation Packaging Technology Evolution of ABF Carrier Board Requirements
- Technological Breakthroughs and Capacity Threats of China's ABF Carrier Plants
❓ Frequently Asked Questions
Why does an AI chip need an ABF carrier board?
The high density and power consumption of AI chips require better electrical performance and heat dissipation from ABF carrier boards, and traditional carrier boards are unable to meet the requirements of high-frequency and high-speed transmission.
How long will the Taiwan Carrier Board Trio continue to run out of capacity?
It is estimated that the supply-demand tension will be difficult to be alleviated until new production capacity is launched in the second half of 2025, during which Taiwan manufacturers will enjoy the double benefits of full production and price increases.
How is this wave of AI demand different from previous mining booms?
AI infrastructure is a long-term investment for enterprises, with more stable and sustainable demand and a higher technological threshold, unlike mining where there are policy risks and cyclical ups and downs.
The price increase cycle starts, the three main carriers' profit jumps this year.
Key Events
The PCB carrier industry has started a new cycle of price increases, and the three major players are expected to see a jump in profitability this year, driven by demand for AI servers. Tight supply and demand will drive product price re-pricing, and the bargaining power of PCB manufacturers will be significantly enhanced.
Key Data
In 2024, the estimated revenue growth rate of the three main players in the carrier board industry is 20-35%, and the gross profit margin is expected to increase from last year's 15-20% to 25-30%. The price of ABF carrier boards has risen by 15-25% compared with the same period last year, and the annual revenue of the carrier board industry is expected to reach NT$800 billion.
Market Importance
The carrier board industry has entered a rare super cycle of volume and price increases, breaking the vicious cycle of price competition over the past five years. This price increase is not a short-term speculation, but a reflection of the structural demand for high-end substrates for AI computing. Carrier manufacturers have finally shifted away from the OEM mentality and shifted to technical value pricing. Taiwan's increased voice in the global carrier industry will redefine the industry's profit model and create sustainable value growth for shareholders.
⚠ Negative View
The price increase may trigger customers to accelerate the search for alternative suppliers or promote technological alternatives, and if the overly optimistic profit expectations are not realized, the stock price correction may be even more drastic.
📍 Next observation.
- Q1 Quarterly Gross Margin Improvement Verifies Effect of Price Increase
- Customer acceptance of price increases and order continuity
- Price Impact of Competitors' Capacity Expansion
- New technology platform introduction progress and yield improvement
- Evolution of Carrier Standards and Differentiation Capabilities
- Changes in the pattern of global carrier capacity reallocation
❓ Frequently Asked Questions
How much has the price of the carrier plate increased?
The price of ABF carrier boards increased by 15-25% compared with the same period last year, with the price of high-end carrier boards for AI servers increasing by more than 30%, which is the biggest increase in the past five years.
Can Carrier Board's Profit Improvement Be Sustained?
In the short term, with strong AI demand and oversupply of capacity, profit improvement is sustainable, but in the long term, we need to observe changes in the supply/demand balance after new capacity is launched in 2025.
Will the price increase affect the price of end products?
The cost of the carrier board accounts for about 3-5% of the total cost of the AI server, the price increase will have limited impact on the terminal, customer acceptance is relatively high, and will not significantly affect the demand.
PCB specifications upgraded, the demand for drilling needles exploded! 4 conceptual stocks strong listed
Key Events
AI and high-frequency applications drive the development of PCBs towards high layers and small apertures, leading to a significant increase in demand for precision drilling needles, and the consumption of drilling needles increases dramatically due to the trend of PCB microvia, leading to a new growth momentum for related equipment and consumables manufacturers.
Key Data
The number of PCB layers for AI servers has increased from 16-20 layers to 24-32 layers, and the diameter of microvias has been reduced from 0.15mm to less than 0.1mm. The consumption of drill pins has increased by 50-80% compared to traditional PCBs. The global PCB drill pin market is estimated to reach US$1.5 billion in 2024, with an annual growth of 25%.
Market Importance
PCB technology upgrades have driven the drill pins industry to a golden growth period, subverting the stereotypical impression that consumables manufacturers operated at a small profit in the past. Microvia and multilayer are not simply process improvements, but the inevitable result of the evolution of advanced semiconductor packaging and AI computing architecture, and the demand for drill pins will show structural growth rather than cyclical fluctuations. Firms that master precision drilling technology will enjoy technological dividends in this PCB specification revolution and become the invisible champions of industrial upgrading.
⚠ Negative View
Although drilling needles are consumables, the technological threshold is relatively low. Once the demand is clear, the rapid expansion of production by large international companies may compress the profit margins of Taiwan-based companies, and the development of new technologies, such as laser drilling, is likely to replace the demand for some of the traditional drilling needles.
📍 Next observation.
- Q1 Capital Expenditures and Equipment Purchase Plans of PCB Manufacturers
- Order and Price Adjustment Trends of Major Drill Needle Manufacturers
- Progress in the development of the new generation of drilling needles
- Impact of PCB Process Yield Improvement on Drill Pins Consumption
- Laser Drilling Technology Maturity and Cost Reduction Trends
- The evolution of semiconductor packaging technology on the PCB specification requirements change
❓ Frequently Asked Questions
Why PCB upgrades dramatically increase the need for drill pins?
The increase in the number of PCB layers for AI applications and the reduction of hole diameters have doubled the number of holes to be drilled and increased the precision requirements, coupled with the fact that precision drilling needles are prone to wear and tear and need to be replaced frequently, resulting in a significant increase in consumption.
Is the drill concept still worth investing in?
Short-term benefit is clear but need to pay attention to the valuation of the reasonableness, it is recommended to pay attention to the technical moat and under the tourist accounts stable manufacturers, avoid purely thematic speculation stocks.
How long will this surge in demand for drills last?
With the popularization of AI and high-frequency applications, the trend of PCB high-end will continue for at least 3-5 years, but we need to pay attention to the breakthroughs in process technology that may change the pattern of demand for drilling pins.
