Shares in the printed circuit board (PCB) sector opened higher across the board.

KB LAMINATES (HKG: 01888) jumped 9.15% to HK$73.35, while its parent company KINGBOARD HLDG (HKG: 00148) rose 6.72% to HK$100.00.

VGT (HKG: 02476) advanced 5.54% to HK$399.80, and DELTON (HKG: 01989) gained 4.19% to HK$171.40.

The gains follow reports indicating a significant wave of capacity expansion within the PCB manufacturing industry. An incomplete tally shows that as of June 11th, 13 PCB manufacturers have announced expansion plans this year, with total investment exceeding 60 billion yuan, including intended investments.

Interviews with executives from several listed companies in the industrial chain suggest this round of expansion is not merely about increasing scale. It is described as more of a strategic positioning battle focused on securing high-end production capacity and global market share.

In a research note, Citi highlighted that major copper-clad laminate (CCL) producers are only increasing their capacity by just over 20% this year, a rate far below the expansion pace of downstream PCB manufacturers.

The bank warned that as demand from artificial intelligence (AI) applications accelerates in the third quarter, some PCB factories may begin to face shortages in CCL allocation.

Citi also noted widespread price increases of at least 20% for M7 grade and lower CCL materials, with lower-end M4 products seeing hikes of 30% to 40%. In contrast, price increases for high-end M8 materials used in AI applications have been relatively moderate, as suppliers prioritize maintaining long-term customer relationships.