A recent analysis from DBS Securities highlights that the surging demand for AI-driven PCBs, coupled with rapid technological advancements, is driving significant inflation in the equipment sector. The firm projects that demand for AI PCB equipment will reach 15.8 billion yuan, 29.5 billion yuan, and 67 billion yuan in 2025, 2026, and 2027 respectively. This surge in AI PCB adoption is expected to boost global PCB equipment demand by 30% year-on-year in 2026 and 64% in 2027.

The report suggests that, without capacity expansion, current industry production capacity may be insufficient to meet the anticipated demand in 2027. This scenario points to a trend of simultaneous volume and price increases in the equipment segment, while domestic equipment manufacturers are accelerating their pace of import substitution.

Why the Surge in AI PCB Demand is Driving Equipment Price Inflation

The rapid iteration of AI servers, switches, and optical modules is pushing AI PCBs toward higher-layer counts and advanced HDI technology. Compared to traditional servers, AI PCBs demand significantly higher specifications in terms of layer count, surface area, hole density, circuit precision, and reliability. This translates to a multiplicative increase in the value of PCBs per unit, fostering structural upgrades across the industry. The shift toward more sophisticated AI PCB products is consequently driving overall price inflation within the equipment sector.

Massive Expansion Plans from PCB Manufacturers to Drive Over 30% Growth in Equipment Demand

According to the firm's incomplete statistics, major global PCB manufacturers have announced expansion investment plans totaling 101.2 billion yuan since the start of 2026. The focus of these expansions is heavily weighted toward high-end capacity for high-multilayer and advanced HDI boards that support AI applications. The firm estimates that AI PCB equipment demand will hit 15.8 billion yuan in 2025, 29.5 billion yuan in 2026, and 67 billion yuan in 2027. This will drive global PCB equipment demand growth of 30% in 2026 and 64% in 2027. The report warns that existing equipment capacity may not be enough to sustain the rapid industry growth expected in 2027, leading to a likely "price and volume surge" for core PCB equipment.

Core Equipment Segments Poised for Significant Gains

High-multilayer boards and HDI technologies require notably higher performance in hole processing, interlayer interconnection, and fine-line circuitry. The firm identifies drilling (estimated to account for 35% of value), plating (20%), exposure (15%), and inspection (10%) as the core equipment areas set to benefit the most. Projections for 2027 suggest the demand for drilling, plating, exposure, and inspection equipment will reach approximately 33.8 billion yuan, 19.3 billion yuan, 14.5 billion yuan, and 9.6 billion yuan, respectively. The firm reiterates its belief that, barring new capacity expansion, the current equipment industry's production capacity may be insufficient for the 2027 demand, reinforcing the outlook for a rise in both volume and prices.

Foreign Capacity Constraints Pave the Way for Domestic Players

In the face of the AI PCB opportunity, overseas equipment manufacturers are encountering production capacity limits and show a low willingness to expand. In contrast, domestic equipment makers have developed strong competitive capabilities in key areas such as drilling (mechanical and ultrafast laser), plating (horizontal vertical continuous filling), exposure, and inspection. With faster expansion capabilities, these domestic firms are well-positioned to fully capitalize on this wave of AI PCB expansion and seize the window for import substitution.

Stocks to Watch

The firm recommends investors pay attention to industry chain players including Han's CNC, Xinji Micro, Dongwei Technology, Asia Vital Components, Riyan Technology, Yirui Technology, and Sanfu New Materials.

Key Risks

Potential risks include global cloud providers' AI capital expenditure falling short of expectations, PCB manufacturers' expansion and equipment order fulfillment not meeting projections, and risks related to changes in technology roadmaps and intensifying industry competition.