Shengyi Electronics: Deeply involved in digital communication, ready to go

Shengyi Electronics was founded in 1985. After more than 30 years of development, it has grown into a leading enterprise in the printed circuit board industry in China. Based on its technical capabilities, equipment configuration, customer resources, etc., the company determined an industry strategy focusing on communication networks, computer/server, automotive electronics and other industries, taking into account some difficult and demanding special products. According to the PCB industry report released by Prismark in the first quarter of 2024, the company ranked 45th in revenue in the 2023 global top 100 printed circuit board industry rankings.

PCB: The recovery trend is clear, and the boom track leads growth

PCBs are key interconnects used to assemble electronic components. They not only provide electrical connections for electronic components, but also carry business functions such as digital and analog signal transmission, power supply, and RF microwave signal transmission and reception for electronic devices. PCBs are widely used in communication electronics, consumer electronics, computers, automotive electronics, industrial control, medical devices, national defense and aerospace fields. In recent years, the global PCB output value has shown a steady upward trend, and the global PCB output value CAGR reached about 5% in 2017-2022.

The current trend of lightweight, short, and high-frequency high-speed electronic products places higher demands on the precision and stability of PCBs, and the PCB industry will develop in the direction of high density and high performance.

Automobiles: The wave of intelligence continues, driving up the value of PCBs

PCBs are the core components of automotive electronic control systems. Currently, the automotive industry is trending towards electrification, intelligence, and connectivity. This trend will drive an increase in demand for high-end automotive boards. Automotive electronic PCBs require extremely high reliability and require a long period of time (1-3 years) of strict testing and verification before they can pass the certification of qualified suppliers of auto parts manufacturers. As the level of autonomous driving and the penetration rate of new energy vehicles continue to increase, automotive PCBs will gradually be upgraded to multi-layer, high-grade HDI, high frequency and high speed.

Digital Communications: Demand for AI servers has exploded, and PCBs have ushered in a sharp rise in volume and price. The current AI industry has reached a stage of rapid development. Global AI infrastructure spending continues to show a high growth trend, and huge demand for computing power has opened up market space for AI servers. Among them, high-end servers usually require PCBs, such as high number of layers, high aspect ratio, high density, and high transmission speed, which require as many as 46 layers. Looking ahead to the future market, the strong demand for AI servers and high-speed network systems is driving the demand for large, high-speed, multi-layer PCBs. As the requirements for computing power are getting higher and higher, the requirements for PCB-related products will continue to rise. In particular, demand for HDI products will continue to rise.

Shengyi Electronics: Deeply involved in digital PCBs, leading product technology

With more than 30 years of R&D investment and technology accumulation, the company has outstanding technological innovation capabilities and already has industry-leading technical level in the PCB field. In the field of core technology, the company can currently produce 2-56 layers of backboards and 20-40 layers of server boards, respectively. Looking ahead to the future market, the company is focusing on research and development of related products in the fields of AI and high-performance computers. Currently, it has successfully developed many server customers, including Amazon, and AI-enabled motherboards and acceleration card projects have all entered the mass production stage. At the same time, the company has a production capacity of 4-30 layers of HDI boards. Currently, production capacity for HDI and hard and soft boards is gradually being released, and the business situation is improving steadily. It has gradually completed certification and introduction of some key customers, laying the foundation for future order expansion.

Risk warning

1. Technological innovation falls short of expectations;

2. Downstream demand growth falls short of expectations;

3. AI server delivery falls short of expectations;

4. Risk that profit forecasting assumptions are untrue or fall short of expectations.