Soochow: Increase in computing power demands + emergence of new technologies, optimistic about continuous improvement in PCB equipment demand.

Soochow released a research report stating that according to IDC data, global server sales reached $95.2 billion in 2025Q1, a year-on-year increase of +134.1%. It is estimated that the global server market size will reach $366 billion in 2025, a year-on-year increase of +44.6%. The shortage of computing power is driving demand in the PCB industry. According to Prismark data, the global PCB market size was $73.565 billion in 2024, a year-on-year increase of +5.8%. It is expected that the market size will grow to $78.562 billion in 2025, a year-on-year increase of +6.8%, further increasing the growth rate. It is suggested to focus on the core drilling, exposure, and electroplating processes in PCB production: For the drilling process, it is recommended to focus on equipment suppliers such as Shenzhen Han's CNC Technology (301200.SZ) (both mechanical drilling and laser drilling), as well as consumable suppliers such as Guangdong Dtech Technology (301377.SZ) and China Tungsten and Hightech Materials (000657.SZ). For the exposure process, it is recommended to focus on Circuit Fabology Microelectronics Equipment and Suzhou TZTEK Technology. For the electroplating process, it is recommended to focus on Kunshan Dongwei Technology, and for the solder paste printing process, it is recommended to focus on GKG Precision Machine. Main points from Soochow: Increase in computing power demand drives capital expenditure in the PCB industry According to IDC data, global server sales reached $95.2 billion in 2025Q1, a year-on-year increase of +134.1%. It is expected that the global server market size will reach $366 billion in 2025, a year-on-year increase of +44.6%. The shortage of computing power is driving demand in the PCB industry. According to Prismark data, the global PCB market size was $73.565 billion in 2024, a year-on-year increase of +5.8%. It is expected that the market size will grow to $78.562 billion in 2025, a year-on-year increase of +6.8%, further increasing the growth rate. The demand for servers is the main driver of expansion in the PCB market. In 2024, the output value of servers/storage in the downstream PCB industry was $10.916 billion, a year-on-year increase of +33%, accounting for approximately 15%. In terms of types, in 2024, the production value of multi-layer boards with more than 18 layers worldwide increased by +40.2% year-on-year, and the production value of HDI boards increased by 18.8%, far exceeding the overall industry growth rate of 5.8%. Drilling, exposure, inspection are core processes in PCB production, with increased difficulty in high-end board processing PCB production involves processes such as material cutting, drilling, electroplating, exposure, etching development, inspection, lamination, etc., with drilling, exposure, and inspection being the core processes in PCB production. In 2024, the value of drilling equipment accounted for approximately 20% of the entire industry chain, while exposure/inspection/electroplating equipment accounted for 17%/15%/7% respectively. Due to the current high demand for PCBs driven by the requirements of computing power servers, the main demand increment is for multi-layer boards, HDI, and high-frequency high-speed boards. For example, HDI boards have more layers/more dense circuits/smaller hole diameters, which pose new requirements for drilling, exposure, and electroplating processes. Drilling process: The increase in the number of layers leads to an increase in the number of blind vias/buried vias, driving the demand for drilling processing. Furthermore, with smaller hole diameters, there is an increased demand for high-precision mechanical drilling/laser drilling. Exposure process: The higher circuit density of HDI boards has led to the adoption of laser direct imaging as a replacement for traditional photolithography processes. Electroplating process: With the increase in the number of high aspect ratio through holes, blind vias, and buried vias, there is a higher requirement for electroplating processes. Currently, the domestication rate of mechanical drilling processes is relatively high, and there are opportunities for domestic replacements in laser drilling and laser imaging processes. The emergence of CoWoP technology further drives PCB development towards high density and high precision Compared to CoWoS technology, CoWoP technology eliminates the need for package substrates, allowing chips to be directly packaged onto PCB boards through silicon intermediate layers, simplifying the process steps and potentially becoming the mainstream packaging technology of the next generation. CoWoP technology requires PCBs to have high-density wiring capabilities and high precision similar to package substrates, with PCB line widths decreasing from 20-30m in CoWoS-P technology to 10m in CoWoP technology, requiring the use of MSAP technology for fine wiring. The development of PCBs towards high density and high precision poses higher requirements for drilling, exposure, and electroplating processes, with corresponding increases in the value of equipment in these processes. Risk warning Macroeconomic risks, PCB production processes falling below expectations, and computing power server demand falling below expectations.