Zheshang Securities Co., Ltd. has released a research report indicating that China's share of the global PCB market has climbed from 54.2% (2021) to 57.5% (2025). The surge in AI high-performance computing is driving demand for advanced boards, with the global server PCB market projected to grow at a compound annual growth rate (CAGR) of approximately 11.2% from 2026 to 2030, significantly outpacing the overall PCB market's CAGR of around 5.3%. The evolution of the AI industry is pushing PCB technology toward higher layer counts, which is expected to drive both volume and price increases for PCB drill bits. With the convergence of the computing power wave and domestic substitution trends, the report suggests focusing on PCB drill bit and cutting tool supply chain stocks.

The key insights from Zheshang Securities Co., Ltd. are outlined below. PCB, often referred to as the "mother of the electronics industry," now accounts for nearly 60% of global production in China. AI computing power is driving demand for high-end boards, with the server PCB market growing much faster than the overall sector. From 2021 to 2025, the global PCB and server PCB markets saw CAGRs of approximately 2.3% and 20.9%, respectively. Looking ahead to 2026-2030, these figures are expected to be around 5.3% and 11.2%. China's share of the global market has risen from 54.2% (2021) to 57.5% (2025), fueled by a combination of emerging technologies, high-performance advancements, and policy support.

Regarding PCB cutting tools, the ramp-up in AI server production is boosting demand for consumables like drill bits and milling cutters. These tools, which include drill bits, milling cutters, and specialty tools, are essential for drilling and shaping processes. Between 2026 and 2030, AI server shipments are expected to grow from 3.1 million units to 6.5 million units, representing a CAGR of over 20%, which should significantly increase consumption of high-precision processing consumables.

Focusing on PCB drill bits, the large-scale expansion of AI servers is expanding demand for high-end drill bits, positioning the industry for both higher volumes and better pricing. Drill bits are the core tools used for mechanical drilling to establish interlayer electrical connections in PCB boards. End-market demand varies by board type, with breakage rates under 0.1% for standard boards and under 0.01% for high-multilayer HDI and IC substrates. The AI industry's push toward higher layer counts imposes stricter performance requirements on drill bits, emphasizing high aspect ratios, special coatings, and superior wear resistance. For example, the share of drill bits with diameters exceeding 30 times the rod diameter at Dimatech High-Tech has risen from roughly 4% (Q1 2026) to about 12% (August 2026), with notably faster growth in Q3 2026. Coated drill bits are expected to expand their share from 35.4% (2025) to 51.6% (2030), while tool lifespan has plummeted from around 3,000 uses per drill bit to fewer than 800, placing stringent demands on wear resistance.

Market size estimates from Zheshang Securities Co., Ltd. suggest the global PCB drill bit market will achieve a CAGR of approximately 99% from 2026 to 2028. Within this, the AI PCB drill bit segment is projected to grow at a CAGR of about 138% over the same period, with AI computing board demand becoming the primary engine for rapid industry growth.

In terms of competitive landscape, the global CR5 reached 75.7% in 2025, indicating a highly concentrated market. China accounted for 63.0% of the global PCB drill bit market in 2025, ranking first worldwide. Dimatech High-Tech leads with a 29.2% market share, while Jinzhou Precision Tools, a subsidiary of China Tungsten and Hightech Materials, brings deep technical expertise as a pioneer in domestic substitution. Four key barriers—technology, customer certification, supply chain and cost control, and capital—combined with three major trends (domestic substitution, intelligent manufacturing, and capacity upgrades) are expected to continue strengthening the advantages of leading companies.

Stocks to watch include Dimatech High-Tech, China Tungsten and Hightech Materials, Shinriuk Co., Ltd., Sifangda, Worldia, Minbao Optoelectronics, Oukei, Huarui Precision, and Jemeter. Risks include weaker-than-expected AI server shipments, a slowdown in downstream PCB capital expenditure, market competition, sharp fluctuations in tungsten raw material prices, and delays in high-end micro-drill R&D and customer certification progress.