New Shares Outlook | The domestic replacement of IC carrier boards is speeding up. How does Lide Semiconductor position itself in the high-end FCBGA market?

In the current era when Artificial Intelligence (AI) and High-Performance Computing (HPC) are sweeping the world, every link in the semiconductor industry chain is undergoing reshaping. If chips are the heart of computing power, then IC carriers are the crucial blood vessels connecting the heart to the body. With the evolution of advanced packaging technologies, the importance of IC carriers is increasingly prominent, especially the FCBGA carriers used for high-end chips, which have become scarce resources that restrict the enhancement of computing power. Recently, Liding Semiconductor Technology (Shenzhen) Co., Ltd. (hereinafter referred to as "Liding Semiconductor") officially submitted its application for listing on the main board of the Hong Kong Stock Exchange, with CITIC SEC as the sole sponsor. This IC carrier manufacturer, born from the leading global PCB company Zhen Ding Technology Group, is trying to break free from the traditional manufacturing industry valuation framework and move towards the capital market to seek independent pricing. Seizing the core AI race track, market share surges rapidly Understanding the commercial value of Liding Semiconductor requires starting from the microstructure of the semiconductor industry chain. An AI chip, once manufactured in a wafer factory, cannot be directly installed into a server. It must be connected, powered, signal transmitted, and cooled by a high-precision small circuit board to be ready for packaging and testing. This "mini motherboard" is the IC carrier, sandwiched between the bare chip and printed circuit board, performing core functions of electrical connection, mechanical support, and thermal management. With AI chips getting larger in size, higher in I/O density, and consuming more power, IC carriers have evolved from accessory components to critical industrial bottlenecks that determine whether the chips can be stably mass-produced. It is understood that Liding Semiconductor's product offerings cover FCBGA, FCCSP, WBCSP, and module carriers, with FCBGA being the strategic focus, mainly serving high-end chips in the AI and high-performance computing fields such as CPUs, GPUs, AI accelerators, etc. The prospectus shows that the company is the first in mainland China to achieve certification for supporting 2nm chip FCBGA carriers, the first to achieve large-scale production of FCCSP carriers supporting 3nm smartphone SoC chips, and a breakthrough in the production of IC carriers for chiplet packaging with 11 or more chips in a single package. This rapid increase in market share is attributed to the company's keen capture of the AI and HPC market. The prospectus shows that the company's revenue from AI and HPC applications surged from 26.9 million in 2023 to 716.2 million in 2025, with a compound annual growth rate of 416.1%. This data not only confirms the reality of the AI trend but also demonstrates that Liding Semiconductor has successfully entered the supply chain system of leading AI customers globally. From an industry perspective, the IC carrier market is entering a period of structural growth. From 2021 to 2025, the global IC carrier market is projected to grow from $14.4 billion to $14.9 billion, experiencing a downturn in 2023 followed by a recovery from 2024 to 2025. Driven by the surge in AI computing demand, the continued recovery in the server market, and the increasing penetration of advanced packaging, Frost Sullivan predicts that the global IC carrier market will reach $30.3 billion by 2030, with a compound annual growth rate of 15.3% from 2025 to 2030, and FCBGA carrier growth expected to reach 19.7%. The growth rate in the mainland Chinese market is even more significant, with a projected compound annual growth rate of 18.6% during the same period. In the current industry landscape, Liding Semiconductor's precise positioning in the critical link of "domestic high-end packaging materials filling the gap" is meeting the dual drive of increasing complexity in AI chip packaging and the demand for independent and controllable supply chains. "Growing pains" and "rebirth" behind high growth Financial data is a crucial indicator for examining a company's business model. Looking at the revenue end, the company's growth curve is extremely steep. Revenue increased from 1.183 billion yuan in 2023 to 2.056 billion yuan in 2024, and further to 2.829 billion yuan in 2025, with a compound annual growth rate of 54.6%. This momentum did not weaken in 2026, with revenue reaching 924 million yuan in the three months ending March 31, a year-on-year increase of 70.9%. Of particular note is the improvement in profitability trajectory. The company's gross profit margin narrowed from -42.7% in 2023 to -5.1% in 2024, turning positive to 3.5% in 2025, and further jumping to 15.9% in the first quarter of 2026. At the net profit level, the company recorded losses of approximately 753 million yuan, 405 million yuan, and 329 million yuan from 2023 to 2025, totaling about 1.487 billion yuan in losses. However, in the first quarter of 2026, the company achieved its first net profit of 50.11 million yuan, with a net profit margin of 5.4%. The adjusted EBITDA profit margin also increased from -10.0% in 2023 to 30.9% in the first quarter of 2026. The appearance of a profit turning point is fundamentally due to the strategic investment in production capacity entering the harvest period. The company made significant capital expenditures in its facilities in Shenzhen and Qinhuangdao, with the book value of property, plant, and equipment reaching 60.5 billion yuan, 62.6 billion yuan, and 58.1 billion yuan by the end of 2023, 2024, and 2025, respectively. The depreciation expenses generated from these investments were gradually diluted as revenue rapidly increased. The proportion of depreciation and amortization costs in sales costs decreased significantly from 35.7% in 2023 to 19.9% in the first quarter of 2026. The differentiation in gross profit margins across product lines also reveals changes in the business structure. The gross profit margin of the FCBGA carrier, which is the core growth driver of the company, decreased significantly from -319.3% in 2023 to -7.7% in 2025 and turned positive for the first time at 7.5% in the first quarter of 2026. The FCCSP carrier showed even stronger performance, with the gross profit margin increasing from -4.4% to 36.1% during the same period, and the gross profit margin for WBCSP and module carriers also rising from -22.1% to 3.4%. In terms of product structure, the revenue contribution of FCBGA carriers increased from 10.8% in 2023 to 40.2% in the first quarter of 2026, and revenue from AI and HPC applications surged from 26.9 million in 2023 to 716.2 million in 2025, with a compound growth rate of 416.1%. Despite the promising profit outlook, Liding Semiconductor's balance sheet reveals typical risks faced by growth-oriented companies - liquidity pressure. As of March 31, 2026, the company had a net current liability of 18.58 billion yuan, primarily due to a large amount of short-term borrowings accumulated for capacity expansion. Although the company had cash and cash equivalents of approximately 492 million yuan and operating cash flow had turned positive in 2025, the high level of short-term debt still poses a Damocles sword hanging over the company. Optimizing the capital structure, supplementing operating funds, may be the main purpose of the company's IPO fund-raising. Furthermore, the high concentration of customers is also a significant feature in the financial aspect. Although the revenue share of the company's top five customers gradually decreased from 81.4% in 2023 to 68.1% in the first quarter of 2026, the share of the largest customer decreased from 37.8% to 29.0% during the same period, showing an improving customer structure. It is worth noting that the proportion of transactions with the controlling shareholder Zhen Ding Group has also been declining continuously, with sales to the retained Zhen Ding Group accounting for 5.1% in the first quarter of 2026, and purchases accounting for 3.3%, gradually strengthening the independence of the business operations. Seeking certainty in cyclical fluctuations In addition, the macro-level industry cyclicality is also a factor that cannot be ignored. The semiconductor industry, known as the "silicon cycle", highly depends on the resonance of macroeconomic conditions and downstream demand. While the current AI computing demand presents structural growth opportunities for IC carriers, the industry's history is marked by a cycle of "boom and bust". The company also openly acknowledges in the prospectus that capacity expansion requires a lengthy lead time, and the shadow of oversupply often looms after industry participants expand production simultaneously. Once the AI hype cools down or end-user demand weakens, price wars and declining capacity utilization rates could quickly erode corporate profits. For Liding Semiconductor, which has just crossed the breakeven point, any downturn in the industry cycle could once again pose a profitability test. Looking ahead, Liding Semiconductor's growth path is clear. According to the prospectus, the funds raised through this IPO will mainly be used to expand FCBGA production capacity. The company plans to further build production facilities and acquire high-end equipment (such as laser drilling equipment, outer layer line forming equipment, etc.) on top of its existing facilities in Shenzhen. This strategy aligns with market supply-demand logic. Frost Sullivan predicts that the supply-demand ratio for global FCBGA carriers will surpass 100% in 2026, entering a state of undersupply, with the gap expected to continue expanding until 2030. By expanding production at this time, Liding Semiconductor aims to seize this massive market gap. On the technological front, the company is committed to transitioning from traditional carrier manufacturing to more advanced High-Density Interconnection (HDI) and higher-layer carrier technologies to meet the increased demands of AI chips for higher I/O density and better thermal performance. With the widespread adoption of 2.5D/3D packaging technologies, the technological barriers of IC carriers will be further raised, which is a key factor in consolidating the moat for Liding Semiconductor with its first-mover technological advantage. In conclusion, the prospectus of Liding Semiconductor paints a picture of a hard-tech company in a "transformation period". It boasts impressive revenue growth and benefits from the AI trend, successfully crossing the most challenging breakeven point and showcasing strong profit resilience. However, liquidity pressure, high customer concentration, and industry cyclicality are also realistic challenges that cannot be overlooked. For investors, Liding Semiconductor is not only a ticket to the AI computing era but also a test of whether high-end manufacturing in China can break out in a strong cycle and competitive environment. If the company can use the IPO funds to optimize the debt structure smoothly and continue to maintain technological leadership, then the current financial "growing pains" will ultimately become a footnote to its ascent to the industry peak.