Shenwan Hongyuan Group Co., Ltd. released a research report indicating that Nvidia (NVDA) is expected to use M9 material in its next-generation Rubin series products and orthogonal backplanes in the Rubin Ultra series, scheduled for release in the second half of next year. This significantly increases processing difficulty, leading to a simultaneous rise in the volume and price of PCB drill bits. Processing M9 substrates and orthogonal backplanes is highly challenging, placing greater demands on drill bit length, breakage rate, and processing performance. The single-bit lifespan is substantially reduced, corresponding to a several-fold increase in drill bit demand. Meanwhile, high-performance drill bits command higher prices due to features like coatings and high aspect ratios. Drill bit manufacturers are set to benefit fully from this volume-price growth dynamic.
In a related development, on January 30, 2026, Up-Shine Lighting Co.,Limited (301362.SZ) announced plans to acquire a 49% stake in Xiamen Maxda's Xiamen Zhizhi Precision through a share issuance, and to purchase the remaining 51% stake with cash. Upon completion of the transaction, Up-Shine Lighting will achieve 100% ownership of Xiamen Zhizhi Precision. Xiamen Zhizhi Precision specializes in the R&D and production of tungsten carbide micro-drills for PCB, FPC, IC substrates, and AI PCBs. Its product sizes range from 0.09mm to 0.35mm, with particular expertise in ultra-small diameter drills below 0.20mm. With 30 years of technical expertise, it already serves leading global PCB clients. The company possesses the capability to independently develop core equipment, such as multi-station composite step machines, addressing challenges related to long lead times and high costs of imported equipment.
According to its public filings, during the first half of 2025, the global PCB drill bit industry's top five players held a combined market share of 75.2% by volume. Among them, a leading global company ranked first with sales of 500 million units, capturing a 28.9% market share. Amid the current shortage of drill bits, the company is poised to benefit maximally from the demand surge driven by technological iteration, leveraging its economies of scale and in-house equipment manufacturing capabilities.
Another company, deeply entrenched in the PCB drill bit sector, boasts a high-end product mix, with its premium "Three Treasures" series accounting for over 50% of sales. By the end of October 2025, its monthly capacity reached 80 million units. A capacity expansion and technical upgrade project announced in mid-2025, aiming for an annual output of 140 million units, is expected to reach full production and efficiency by early 2026. The company maintains an incremental expansion strategy. In December 2025, it announced significant upgrade projects: a "Technical Upgrade Project for Ultra-High Aspect Ratio Precision Micro Tools for AI PCBs" with an annual capacity of 63 million units, and a "Technical Upgrade Project for 130 Million Micro-Drills." These initiatives focus on enhancing large-scale supply capacity for high-end tools used in AI PCBs, providing critical support for the global AI industry chain.
A different firm has reported new progress in the internal validation of its PCD drill bits, highlighting the vast potential of diamond for heat dissipation. The future development direction of its diamond micro-drills primarily involves hole processing for PCB boards and high-hardness, brittle materials in semiconductor applications. For example, in internal validation for processing a 0.25mm diameter hole in a 3.5mm thick M9 substrate, the company achieved over 8,000 holes processed without bit breakage. Regarding diamond heat dissipation: Diamond, as the ultimate heat dissipation material, sees its application certainty continually increasing against the backdrop of rising heat dissipation demands. The company has years of R&D and technical reserves in CVD diamond preparation and application and is one of the few companies capable of mastering the entire CVD diamond growth technology. It has developed various specifications of CVD diamond single/polycrystalline heat sink sheets based on client requirements.
Founded in 1995, Xiamen Zhizhi Precision's technology originated from Japan's TOSHIBA TUNGALOY MFG. CO., LTD. Having deep experience in the drill bit field for over thirty years, it extensively serves leading clients in AI PCB, FPC, and substrate sectors. In terms of capacity, it has established two major production bases in Xiamen, Fujian, and Yingtan, Jiangxi. According to company data, its current monthly capacity is around 15 million units. Subsequently, the company will accelerate capacity expansion and strategic layout upgrades, planning to increase monthly capacity to over 50 million units within the next 2-3 years.
Risk warnings include potential slower-than-expected progress in AI PCB development, fluctuations in downstream demand, and intensifying industry competition.