Zheshang Securities: The AI wave drives the PCB boom, and upstream tools welcome a sharp rise in volume and price

Zhitong Finance App learned that Zhishang Securities released a research report saying that China's global share of PCBs increased from 54.2% (2021) to 57.5% (2025); AI high-performance computing drives demand for high-end boards; the global server PCB market CAGR is expected to be 11.2% in 2026-2030, far exceeding the PCB market by about 5.3%; the development of the AI industry is driving the evolution of PCBs to a high level of multi-layering, and PCB drills are expected to rise sharply in volume and price. The wave of computing power resonates with domestic alternatives. It is recommended to focus on the PCB drill and tool industry chain standards.

The main views of Zheshang Securities are as follows:

PCB: Known as the “mother of the electronics industry”, China's share is close to 60%; AI computing power drives demand for high-end boards, and the growth rate of the PCB market for servers far exceeds that of the market

AI high-performance computing drives demand for high-end boards. The global PCB and server PCB market is expected to CAGR of about 2.3% and 20.9% in 2026-2030; China's share of the global market will increase from 54.2% (2021) to 57.5% (2025), driven by three factors: emerging technology, high-performance evolution, and policy support.

PCB tools: AI server capacity drives demand for processing consumables such as drills and cutters

PCB tools are divided into drills, cutters, and special tools, which are core consumables for drilling and molding; in 2026-2030, AI server shipments will increase from 3.1 million to 6.5 million units, with a CAGR of over 20%, which is expected to drive the consumption of high-precision processing consumables.

PCB drills: Benefiting from the large-scale release of AI servers and the expansion of demand for high-end drills, PCB drills are expected to rise sharply in volume and price

PCB drills are the core tool for drilling PCB boards. Benefiting from the AI wave, the PCB drill industry is expected to usher in a sharp rise in volume and price. Drills are mainly used for mechanical drilling to achieve electrical connections between layers, and downstream plate type requirements are differentiated (normal board needle breakage rate < 0.1%, high multi-layer HDI and IC carrier boards < 0.01%). The development of the AI industry is driving the evolution of PCBs in the direction of high multi-layering, putting forward higher performance requirements for PCB drills, focusing on high length-diameter ratio, special coating, and high wear resistance. Dingtai Hi-Tech increased the proportion of drills over 30 times diameter from about 4% (26Q1) to about 12% (August '26), and the rate of increase in 26Q3 increased significantly; the share of coated drills is expected to increase from 35.4% (2025) to 51.6% (2030), and the life span of each drill needle has plummeted from about 3,000 times in the past to less than 800 times, putting forward stringent requirements for the wear resistance of drills.

Market size: The bank believes that the global PCB drill size 2026-2028 CAGR is about 99%. Among them, the AIPCB drill market size is about 138% CAGR in 2026-2028, and demand for AI computing power boards will become the core driving force for the rapid growth of the drill bit industry

Competition pattern: Global CR5 reached 75.7% in 2025, with a high concentration of leaders. In 2025, China will account for 63.0% of the global PCB drill market, ranking first in the world. Among them, Dingtai Hi-Tech leads the way with a market share of 29.2%; Jinzhou Precision Technology, a subsidiary of Chinatungsten Hi-Tech, has accumulated deep technology and is a pioneer in domestic production replacement. Technology, customer certification, supply chain and cost control, the four major barriers to capital, and the three major trends of domestic substitution, intelligence, and capacity upgrading are expected to continue to strengthen the advantages of leading enterprises.

Recommended attention: Dingtai Hi-Tech, Chinatungsten Hi-Tech, Xinrui Co., Ltd., Sifangda, Wald, Minbang Optoelectronics, Okeyi, Huarui Precision, Gemite, etc.

Risk warning: AI server shipping demand falls short of expectations, downstream PCB manufacturer capital expenditure is slowing down, market competition, tungsten raw material prices fluctuate greatly, and high-end micro drill R&D and customer certification progress falls short of expectations.