GF Securities: AI PCB high frequency and high speed trend is clear, domestic quartz electronic distribution is waiting for demand to start

The Zhitong Finance App learned that GF Securities released a research report saying that according to IDC data, the 25Q1 global Ethernet switch market revenue reached 11.7 billion US dollars, +32.3% year-on-year, of which data center Ethernet switch revenue was +54.7% year-on-year. Looking ahead to 2026, 1.6T data center switches are expected to be launched, Nvidia Rubin is expected to be sold, AI PCBs have a clear high frequency and high speed trend and are developing rapidly, and quartz electronic cloth may usher in the first year of demand. On the supply side, domestic companies' products have entered the sample delivery testing and production expansion stage. Waiting for demand to start, it is expected that they will fully benefit from industry dividends, and corporate profit flexibility is expected to be unleashed. It is recommended to focus on Feilihua (300395.SZ), Sinoma Technology (002080.SZ), and Honghe Technology (603256.SH).

The main views of GF Securities are as follows:

Quartz has excellent electrical insulation and temperature resistance. It is mainly used in high-frequency high-speed PCBs

Quartz fiber is a type of inorganic high-performance fiber with a high SiO2 content (> 99.95%), made by melting high-purity quartz at high temperature and drawing into a wire. The rod drawing method is the main preparation method for quartz glass fiber. According to the different product forms, quartz fiber products can be divided into quartz fiber yarn, quartz cotton, quartz felt, quartz yarn, quartz cloth, quartz sleeve, quartz fiber short cut wire, etc. Quartz fiber yarn is a common product and is widely used to make aircraft antenna covers. Quartz cloth is used in high-frequency printed circuit boards in the electronics industry.

The high frequency and high speed trend of AI PCBs is clear. 2026 may usher in the first year of demand volume

CCL of grade M7 or above (400G or above) needs to use low dielectric fiber electronic cloth, and M9 grade CCL (1.6T) needs to use quartz fiber electronic cloth (Q cloth) to meet the dielectric requirements. 2026 may usher in the first year of demand volume: (1) The scale of data center switches is growing rapidly, and 1.6T switches are expected to gradually increase in 2026. According to IDC data, the 25Q1 global Ethernet switch market revenue reached 11.7 billion US dollars, +32.3% year over year, of which data center Ethernet switch revenue was +54.7% year over year. According to Arista, 1.6T rate data center switches are expected to gradually be launched in 2026. (2) GB300 will be shipped as scheduled, and Rubin is expected to be released in 2026. AI servers and switches are expected to upgrade and iterate to M9 grade materials, driving the increase in demand for quartz fiber electronic cloth.

Domestic quartz electronic cloth has entered the sample delivery testing and production expansion stage, waiting for demand to start

Due to the high processing cost, quartz fiber electronic cloth has not opened up the application market in the electronics field before. Starting in 2024, AI will accelerate the industrialization process of high-end electronic cloth. Currently, many companies have begun to test the performance of quartz fiber cloth by sending samples to downstream CCL customers. The main participating companies in quartz electronic cloth include Japan's Shin-Etsu Chemical, Philliva, and International Composites. Currently, Sinoma Technology, Honghe Technology, which have high-end electronic cloth production capacity, or have the ability to further supply quartz electronic cloth. Japan's Shin-Etsu Chemical launched quartz electronic cloth products in 2019. Feilihua develops the first and second generation of quartz electronic cloth products, with an annual production capacity of 1 million meters in 2024, and is expected to have an annual production capacity of 20 million meters in 2030.

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