According to Shanxi Securities, Prismark forecasts that China's PCB output value will grow from $41.213 billion in 2024 to $49.704 billion by 2029, with a CAGR of 3.8%. Servers/data storage represent the fastest-growing downstream segment for PCBs, projected to achieve an 11.6% CAGR during the same period.

The explosive growth in computing demand, driven by AI servers and switches, is pushing for higher PCB performance in both standard and AI servers. This accelerates the shift toward high-frequency, high-speed PCBs, raising requirements for CCL dielectric properties. Core PCB/CCL materials—resins, glass fiber cloth, and copper foil—must evolve toward lower Dk/Df characteristics.

Key insights from Shanxi Securities include: - **PPO and Hydrocarbon Resins**: These materials offer superior Dk/Df performance, making them ideal for high-frequency applications. Domestic suppliers are now mass-producing PPO and hydrocarbon resins, which meet M6-M8 CCL standards for low signal loss and latency. Global demand for electronic-grade PPO and hydrocarbon resins is expected to reach 4,558 tons and 1,216 tons, respectively, in 2025, up 41.89% and 41.62% YoY. While international players like Sabic, Asahi Kasei, and Mitsubishi Gas Chemical dominate, Chinese firms such as Dongfang Insulating Material and Shengquan Group are rapidly closing the gap through technological advancements and expanded production.

- **Low-Dk Glass Fiber Cloth**: Essential for M7+ CCLs, low-Dk glass fiber is categorized into three generations, each supporting higher-tier CCLs (M7-M9). With 5G+/6G and AI advancements, demand for low-Dk glass fiber is set to surge. Market projections estimate a $2.3 billion global market by 2033, growing at a 7.50% CAGR. Japanese, Taiwanese, and Chinese firms lead supply, but domestic producers like Sinoma Technology and Honghe Technology are scaling up production to meet AI infrastructure needs, accelerating import substitution.

- **HVLP Copper Foil**: Critical for high-frequency PCBs, HVLP foil features sub-2μm surface roughness, enabling low signal loss, high-density integration, and superior thermal stability. The global HVLP market is projected to expand from $2 billion in 2024 to $5.95 billion by 2032 (14.6% CAGR). Although Japanese and Korean firms (e.g., Mitsui, Furukawa, Solus) hold key patents and 90% of China’s high-end market share, local players like Defu Technology, Tongguan Copper Foil, and Long Young Electronics are advancing HVLP 4-5 products, aiming to displace imports.

**Key Companies to Watch**: Shengquan Group (605589.SH), Dongfang Insulating Material (601208.SH), Sinoma Technology (002080.SZ), Honghe Technology (603256.SH), International Composite Materials (301526.SZ), Defu Technology (301511.SZ), Tongguan Copper Foil (301217.SZ), Long Young Electronics (301389.SZ).

**Risks**: Weak downstream demand, slower-than-expected R&D, intensifying competition, and macroeconomic volatility.