CITIC Securities: Giving the PCB functional wet electronic chemicals industry a “better than the market” rating, there is plenty of room for local manufacturers to break through

The Zhitong Finance App learned that CITIC Securities released a research report saying that in 2025-2026, the PCB functional wet electronic chemicals industry was in the first half of the “AI-driven structural upward trend” and “domestic replacement acceleration” two-wheel drive boom, and officially entered the fast track of “rising quantity and quality.” The first is the increase in value density brought about by the explosion of AI and the upgrading of high-end PCB processes; second, breakthroughs in domestic substitution in high-barrier processes (such as horizontal copper deposition, electroplating, and carrier board potions) have brought dual flexibility in volume price and valuation to local manufacturers. It covered the PCB functional wet electronic chemicals industry for the first time and gave it a “better than the market” rating. It is recommended that priority be placed on leading enterprises that already have a large number of high-end customers and high performance growth.

CITIC Securities's main views are as follows:

Functional wet electronic chemicals are the key to high-end PCB manufacturing, and the localization rate of their core hole metallization and electroplating processes is low.

Functional wet electronic chemicals directly affect fine circuit molding, through-hole reliability, and welding quality in PCB manufacturing. According to CPCA, among the five major processes, hole metallization and electroplating processes together contribute about 60% of the value, forming a core value link. With the development of PCBs to high-end (high-frequency high-speed boards, HDI, encapsulated boards), the share of functional wet electronic chemicals in the cost increased to 5-10%. However, among the most technically difficult hole metallization and electroplating processes, the localization rate is still low, at 49% and 25%, respectively. The high-end market is mainly dominated by foreign investment. For example, in the field of horizontal copper deposition of hole metallization, the localization rate is only 15-20%.

AI is driving PCB process upgrades, driving a significant increase in demand for high-end functional wet electronic chemicals.

The demand for AI servers and terminals is strongly driving the upgrade of PCBs to 15-20 μm fine circuits, and mSAP/SAP (half addition method/improved half addition method) has become the core process to achieve this goal. We expect that under the mSAP/SAP process, when the line width is from 40 μm to 15 μm, the amount of horizontal copper deposition solution will increase by about 30%, and the demand for electroplating additives will nearly double. In addition, there is a significant technological premium in the field of encapsulation boards, and high-end production capacity such as ABF carrier boards and TGV glass carrier boards (advanced packaging) is rapidly expanding, which is expected to bring about a substantial increase in demand for functional wet electronic chemicals.

The global PCB functional wet electronic chemicals market is expected to reach 4.5 billion US dollars in 2029, and there is plenty of room for local manufacturers to break through.

Currently, the global PCB functional wet electronic chemicals market is mainly dominated by international companies. Domestic companies are speeding up breakthroughs into the high-end field and have replaced domestic production in some market segments. According to our estimates, the global PCB functional wet electronic chemicals market will grow from US$3.54 billion in 2025 to US$4.46 billion in 2029. Looking at the process structure, hole metallization and electroplating are the core growth drivers. It is estimated that by 2029, the market size of horizontal copper deposition and electroplating specialty chemicals will reach US$700 million and US$930 million respectively, with a CAGR of 7.0% from 2025 to 2029, making it the most elastic growth segment in the industry.

Risk factors:

Downstream industry demand fluctuates; raw material prices fluctuate greatly; product price fluctuations; supply patterns deviate from the pace of domestic substitution; technology iteration risks; environmental protection risks.