From the performance of many chip design companies in the first quarter, it can be seen that the demand for chips in the terminal market is still weak, causing a continuous decline in demand. Similarly, downstream PCB card manufacturers have a difficult time, and many large factories have experienced a significant decline in revenue in the first quarter. According to the current market situation, PCB manufacturers have recently lowered prices to ensure production capacity utilization and rushed for orders.

The unbearable small factory has already closed down

Starting from 2023, I thought that after the epidemic, I rolled up my sleeves and did a big job. As a result, from the beginning of 2023 to the end of May, nearly 30 PCB factories have closed down, and there are still ongoing cases, lawsuits, and economic disputes in different supply chains.

Slowing demand in the end market

Benefiting from the transfer of global PCB production capacity to Chinese Mainland and the booming manufacturing of electronic terminal products in the downstream, the overall PCB market in mainland China shows a rapid development trend. It is expected that China's PCB output value will reach 48.618 billion US dollars in 2026, with a CAGR of 5.43% from 2021 to 2026.

"The vigorous development of the electronic information industry is an important boost to the development of the PCB industry. With the development of new generation information technologies such as Big data, cloud computing, 5G communication, the demand for servers and data storage is growing rapidly. With the increase of the penetration rate of new energy vehicles and the rate of automobile electronization, the automotive electronic PCB market is expected to continue to expand." Guo Jiayong said.

Two High Prosperity Incremental Demands+Consumer Recovery Industries Expected to Bottom Up

1. Data center: AIGC catalyzes massive computing power demand, driving IDC to accelerate construction

PCB manufacturers of global servers, data centers and wired communication equipment mainly come from Taiwan, China, Japan and the United States, while mainland manufacturers are relatively backward, mainly because: on the one hand, the high-frequency high-speed CCL market used by servers, switches, etc. is basically monopolized by Japanese and Taiwan, China manufacturers; On the other hand, there is a threshold for brand certification in the PCB field. With the improvement of product technical specifications of domestic high-frequency high-speed CCL manufacturers such as Shengyi Technology, which drives the collaborative growth of upstream and downstream industries, and the passing of PCB manufacturer brand certification, the market share of manufacturers in Chinese Mainland is expected to continue to increase.

2. Automotive Electronics: Three Modernizations Drive PCB Quantity and Price Increase, Leading Japanese Enterprises and Expected High Growth for Domestic Investors

PCBs are widely used in automobiles, with the current focus on mid to low order PCB products. High requirements for vehicle regulations and long certification cycles have led to the application of PCBs in automotive power systems, lighting, sensors, display screens, and other electronic components. The demand structure for automotive electronic PCBs is relatively low-end, mainly consisting of PCBs with less than 6 layers. In the future, it is expected to benefit from the upgrading and iteration of electrification and intelligence.