Zheshang Securities released a research report stating that, in the medium to long term, the PCB industry will benefit from AI-driven demand and the growing market need for high-end PCBs with "thinner profiles, higher density, and better heat dissipation." The global PCB output value is projected to reach $94.661 billion by 2029, with a CAGR of 5.2% from 2024 to 2029. The rapid expansion of global AI data centers and the shift toward high-end PCB technology are expected to drive both volume and price growth in the sector, presenting significant opportunities for domestic industry leaders.

Key insights from Zheshang Securities include: 1. **Market Potential**: PCBs, often referred to as the "mother of electronic products," are expected to see global output hit $73.6 billion in 2024, up 5.8% year-on-year, with China holding the largest production capacity. 2. **Capital Expenditure**: The third wave of capital expenditure cycles has begun, with eight leading domestic PCB companies collectively investing RMB 16.3 billion in the first three quarters of 2025, an 85% year-on-year increase. Upstream equipment manufacturers stand to benefit significantly. 3. **Equipment Demand**: AI-driven demand for high-layer count PCBs, HDI boards, and IC substrates is boosting both the volume and pricing of PCB equipment. Domestic players have substantial room for growth in market share. - **Global Market**: Expanded from $5.84 billion in 2020 to $7.085 billion in 2024 (CAGR: 4.95%). - **China Market**: Estimated at RMB 29.442 billion in 2024 (CAGR: 5.6% from 2020–2024). 4. **Competitive Landscape**: The industry remains relatively fragmented, with China's top five players holding a combined 23.9% market share. Han's Laser (30% domestic share in drilling equipment) leads domestically, while high-end PCB equipment localization remains below 30%. Chinese firms are gaining global competitiveness in drilling (Han's Laser), lithography (Xinji Microelectronics), electroplating (Dongwei Technology), and consumables (Dingtai High-Tech).

**Key Focus Areas**: 1. **Drilling Equipment**: The global market exceeded RMB 10 billion in 2024, driven by demand for 14+ layer PCBs. While Japanese and German firms dominate, domestic players like Han's Laser, Suzhou Weijia, and DYLaser are catching up. 2. **Drill Bits (Consumables)**: The global PCB drill bit market reached $836 million in 2024, with AI pushing demand toward higher-end products, benefiting leaders like Dingtai High-Tech. 3. **Exposure Equipment**: AI-driven PCBs demand higher precision, lower costs, and faster iterations. 4. **Electroplating Equipment**: Increasing PCB layer counts raise precision and yield requirements, complicating equipment demands.

**Risks**: Potential delays in global data center expansion, slower-than-expected R&D in new technologies, and risks related to PCB industry relocation.