GF SEC: The three-way resonance of tin paste volume, price and profits, domestic alternatives have great potential.

GF SEC released a research report stating that solder paste - a consumable component hailed as the "blood vessel" of electronic connections, is experiencing a triple resonance of volume, price, and profit driven by AI. In the split of technology fusion of optical modules and advanced packaging, high-end solder paste is undergoing a tenfold leap in value and speeding up the breakthrough of domestic substitution, becoming another golden track with strong disruptive power in the AI hardware wave after diamond pins. Domestic enterprises launched the T7 solder paste after 25 years and achieved application, entering the 1-100 mass production phase of the industry. The bank recommends paying attention to upstream and downstream enterprises with the ability to produce high-end solder paste and solder powder. GF SEC's main points are as follows: Solder paste is the 'blood' connecting electronic devices, and under the wave of AI, high-end solder paste is experiencing new demand expansion Under the wave of AI, industries such as optical modules, advanced packaging, and PCB are showing trends of increased processing accuracy and integration, combined with an increase in total demand. These three factors will drive a substantial increase in the market demand for higher-grade solder paste. 1. In the high-speed optical module field: the bank estimates that the market size of high-end solder paste in this field will only be 600 million yuan in 2025, but will rapidly grow to 3.176 billion yuan and 4.428 billion yuan in 2027 and 2028, respectively. -Dimension: The continuous upgrade of AI data transmission demands continuously increases the shipment volume of optical modules; (2) Technological upgrade dimension: Optical modules upgrade from 400G to 1.6T and then to future NPO, CPO, and the internal solder joint numbers and integration levels continue to increase, synchronously elevating the amount and grade of solder paste, thereby increasing the value of solder paste per optical module. According to Shenzhen Vital New Material's announcement on June 8, 2026, the value of solder paste per optical module has increased from 0.3-0.75 yuan/piece for 100G to 5-72 yuan/piece for 1.6T. 2. AIPCB field: AIPCB has entered the mSAP process to further reduce linewidth/line spacing, and with the synchronous increase in demand, AIPCB is expected to become the second driving force of high-end solder paste demand growth; 3. Advanced packaging field: Semiconductors are an important area of solder paste application. Under the background of industry continuing development, advanced packaging has long-term growth certainty and is an important downstream area to drive the demand for high-end solder paste. High-end solder paste presents a 'foreign leading, domestic catching up' pattern, with great potential for domestic substitution Solder paste is a core consumable for connecting electronic devices, mainly composed of solder powder and flux, usually classified by particle size. Low- to mid-range solder pastes are mainly used in the SMT process, while high-end solder pastes are mainly used in the semiconductor advanced packaging field. Currently, in the high-end solder paste field, there is a competitive pattern of 'foreign leading, domestic catching up', with foreign companies occupying the main market share. Domestic companies launched the T7 solder paste after 25 years and achieved application, entering the mass production phase of 1-100. The value and profitability of high-end solder paste achieve double expansion The unit value and gross margin of high-end solder paste are significantly higher than those of low- to mid-range solder paste. In terms of unit value, the price of T5 solder paste is about 1 yuan/gram, T6 and T7 solder pastes are priced at approximately 6 yuan/gram and 22.5 yuan/gram, respectively, representing a 6-20 times increase in value compared to T5 solder paste. In terms of gross margin, the gross margin of low- to mid-range solder paste is only 10-40%, while the gross margin of high-end solder paste is above 70%. With the dual combination of unit value and gross margin, the per-gram profitability of high-end solder paste can achieve a significant expansion. The bank noted that some domestic companies are taking crucial steps towards domestic substitution. Focus on upstream and downstream companies with the capacity to produce high-end solder paste and solder powder (1) Shenzhen Vital New Material: The company is a representative enterprise in domestic solder paste, and it has a leading advantage in the high-end solder paste field. According to the company's annual report and announcement on June 8, 2026, the company has successfully launched T7 grade high-end solder paste and applied it in the high-speed optical module field; (2) Gripm Advanced Materials Co., Ltd.: The company's business focuses on the upstream solder powder segment and has a leading advantage in the high-end solder powder field. According to the company's official website, the company currently has T7 solder powder products; according to the company's June 2026 investor relations activity record, the company's market share of tin-based solder powder materials in the domestic market is about 15%, ranking first in market share; (3) Hangzhou Huaguang Advanced Welding Materials: According to the company's official website and Wind, the company has a business layout in the solder paste segment, but its revenue contribution is relatively small, and it already has the production capacity of T6 solder paste. Risk warning Risks of macroeconomic changes and downstream industry fluctuations; risks of product technical progress failing to meet expectations; risks of fluctuating raw material prices.