Tech giants are initiating a wave of Datacenter construction.

Among them, Amazon's Cloud Computing division, Amazon Web Services (AWS), plans to invest at least 11 billion dollars in Georgia to expand its infrastructure and support various Cloud Computing and AI technologies. Microsoft previously stated that its AI Datacenter spending would reach 80 billion dollars in the 2025 fiscal year.

Driven by this trend, the PCB Industry is expected to continue its upward momentum.

According to the Zhitong Financial APP, Printed Circuit Board, abbreviated as the well-known PCB, is also known as printed circuit board, named for its manufacturing process of "electronic printing." Wherever there is electricity, there is PCB, and its downstream applications cover many industries including Consumer Electronics, PCs, communications, automotive electronics, and Aviation, making PCB also known as the mother of electronic products.

China Merchants stated that, driven by AI technology and applications, Servers will be the fastest-growing application area for PCBs, with a projected compound growth rate of 11.6% to 14.2 billion dollars from 2023 to 2028. AI Servers, represented by NVIDIA's GB series, have significantly increased demand for high layers and HDI, and the demand for high-speed data transmission is driving significant upgrades in substrate specifications. The PCB ASP of AI Servers has grown several times compared to ordinary types, and the GB200 has already started shipping at the end of Q4 2024, with large-scale delivery expected next year.

The penetration rate of the new platform for General Servers (supporting PCIe 5.0) is rapidly increasing, and 800G Switches will gradually become the market mainstream next year, with single unit ASP expected to increase significantly, which will also drive the corresponding demand for high layers and advanced HDI.

In recent years, the wave of the AI Industry Chain has been continuously advancing, greatly promoting the development of the PCB Industry. Especially with the recent surge in Datacenter construction led by technology giants, the PCB Industry is expected to further improve in prosperity.

Hong Kong stocks related to the PCB Industry Chain:

KB LAMINATES (01888): The PCB manufacturing process includes drilling, copper plating, printing, welding and other processing steps of the Copper Clad Laminate (CCL), ultimately forming a circuit board. According to previous statements from open-source securities, KB LAMINATES is the leader in the Copper Clad Laminate industry. With the expected rise in Copper prices in 2024 and the gradual warming of downstream demand, there is elastic pricing space for Copper Clad Laminate. Coupled with cost advantages from vertical integration of the Industry Chain and scale effects, it is expected to drive the company’s revenue and profit back to a growth track in 2024.

KINGBOARD HLDG (00148): KINGBOARD HLDG is a global leader in Copper Clad Laminate, and it is strategically positioned along the upstream raw materials and downstream full Industry Chain of PCBs. In the 2024 mid-year report, the group revealed that it is vigorously building a Copper Clad Laminates R&D center equipped with high-precision and advanced equipment. The group has successfully developed various high-frequency and high-speed products that can be applied in the GPUs of AI servers. In the future, it will be able to fully meet the product needs of downstream customers and collaborate with quality customers to promote the certification of the group's products by end customers.

FIT HON TENG (06088): FIT HON TENG's parent company, Foxconn, collaborates closely with NVIDIA in the AI field. Leveraging years of technological accumulation in the connector industry and lean manufacturing capabilities, the company is expected to be certified by NVIDIA and enter the list of backplane connection suppliers. China Securities Co.,Ltd. previously pointed out that FIT HON TENG is a leading global manufacturer in the precision components sector, with Foxconn as the actual controller. The development of AI drives the construction of computing power infrastructure, and the connection system architecture is undergoing high-speed upgrades. FIT HON TENG's layout in the high-speed connection system covers areas such as Copper connections and optical modules, which are expected to benefit significantly. As the business scale expands and quality improvements are continuously promoted, the company's profitability is expected to improve in the future.