Everbright Securities released a research report stating that as AI computing power demand expands, the demand for AI servers has surged significantly. This has led to tight supply for high-end PCB products within the industry, prompting leading domestic PCB manufacturers to increase their capital expenditure, which directly boosts demand for PCB equipment. The focus should be on high-value-added equipment segments in PCB manufacturing, including drilling, exposure, plating, inspection, and drill bits. It is noteworthy that NVIDIA (NVDA.US) plans to adopt M9-grade copper-clad laminates for the CPX and Midplane PCBs in its Rubin architecture, scheduled for release in the second half of 2026. This will significantly increase the processing difficulty and cost of PCBs. The demand for AI PCB drill bits is expected to grow several times over, leading to a scenario of simultaneous increases in volume, price, and profit for high-end PCB drill bits. The main views of Everbright Securities are as follows:

AI development is stimulating demand for high-end PCBs, significantly boosting the demand for PCB equipment. According to Prismark forecasts, the global market size for specialized PCB equipment is expected to reach $10.8 billion by 2029, with a CAGR of 8.7% from 2024 to 2029. In 2024, key equipment segments with large market shares include drilling (21%), exposure (17%), inspection (15%), and plating (7%). Meanwhile, drill bits, as the core consumable for PCB mechanical drilling, have also become a key demand focus for PCB manufacturers. In the drilling equipment segment, demand coexists for both mechanical drilling equipment and laser drilling equipment. The market for CO2 laser drilling machines is primarily dominated by leading overseas companies, while domestic equipment manufacturers are expected to meet the demand for import substitution of high-end mechanical drilling equipment. The development of ultrafast laser drilling equipment is accelerating in the market. In the exposure equipment segment, LDI equipment is the key competitive area, with a high market concentration among leading players. The plating equipment segment features diverse technological routes, with domestic manufacturers holding an advantage in vertical continuous plating equipment. Competition in the inspection field is relatively intense, and the industry is developing towards 3D and online capabilities. In the drill bit segment, demand for PCB micro-drills with diameters below 0.2mm is expected to increase substantially.

NVIDIA's PCB solution under the Rubin architecture may reshape industry demand and the competitive landscape in the drilling equipment and drill bit sectors. NVIDIA's plan to use M9-grade copper-clad laminates for the CPX and Midplane PCBs in its Rubin architecture, scheduled for the second half of 2026, will significantly raise PCB processing difficulty and cost. The demand for AI PCB drill bits is anticipated to grow severalfold, ushering in an era of rising volume, price, and profits for high-end PCB drill bits. In the short term, tungsten-cobalt alloy coated drill bits will remain the mainstream product for processing M9 materials, while the commercial adoption of diamond drill bits still requires time. Simultaneously, to ensure drilling quality, PCB manufacturers may increase their demand for ultrafast laser drilling, providing domestic equipment makers with an opportunity to catch up and capture market share in the drilling equipment sector.

Investment Recommendation: Strong growth in AI computing power demand is leading a wave of capital expenditure among PCB manufacturers. Orders for domestic PCB equipment and consumables providers are expected to see sustained growth. The firm is optimistic about the continued high景气度 of the AI industry chain and recommends focusing on sub-sectors within the PCB equipment and consumables field that are expected to experience faster and larger market size growth. These include drill bits, drilling, exposure, inspection, and plating equipment. It is advised to focus on investment opportunities in leading domestic PCB equipment and consumables suppliers, with the following recommendations in order: 1) Dingtai Technology (301377.SZ): A leading global supplier of PCB drill bits; demand from AI PCBs is driving increases in the volume, price, and profit of its drill bits. Initiated with a "Buy" rating. 2) Han's CNC (301200.SZ): A leading global PCB equipment provider with a leading global market share in drilling equipment. Initiated with a "Buy" rating. 3) GKG Precision Machine (301338.SZ): A globally leading provider of solder paste printing equipment, poised to benefit fully from the high-precision assembly requirements of AI servers. Initiated with a "Buy" rating. 4) Dongwei Technology (688700.SH): A leading domestic plating equipment company with a leading market share in vertical continuous plating equipment. Maintained a "Buy" rating. 5) Tianzhun Technology (688003.SH): A leading enterprise in industrial vision equipment, with its PCB equipment business expected to see significant volume growth soon. Initiated with a "Buy" rating.

Risk Analysis: Risks include macroeconomic fluctuations, slower-than-expected industry technology iteration, volatility in computing power demand, intensifying industry competition, and risks related to raw material and supply chain stability.