Is the PCB supercycle confirmed?
At the end of August, NVIDIA stated in its earnings announcement for the second quarter of fiscal year 2027 that Vera Rubin is entering full mass production. The subsequent earnings call further confirmed that the company started production and shipments in early August, and Rubin is expected to account for about 20% of data center revenue in the next quarter. This means that the demand expectations around the Rubin supply chain since the beginning of the year have officially entered the stage of actual production and delivery.
PCB is one of the segments that responds relatively quickly. At SEMICON Taiwan opening on September 2, Zhending showcased AI server boards with up to 34 layers, as well as 800G, 1.6T, XPO and NPO optical module products. In late August, multiple PCB manufacturers, equipment and consumables enterprises released their semi-annual reports featuring rapid growth. On August 31, Japan's Ministry of Economy, Trade and Industry announced that the output value of electronic circuit substrates in July reached 74.385 billion yen, a year-on-year increase of 29.2%. All these changes point to a common conclusion: Driven by the demand for AI servers, high-speed switches and optical interconnections, orders and output value of the PCB industry continue to rise.
This round of growth is different from the traditional consumer electronics cycle. AI servers not only require more PCBs, but also products with higher layers, lower loss and greater processing difficulty. At the same time, a complete AI rack also includes switching, networking, optical module and power supply systems, so the demand will spread along the entire rack to multiple types of board components. The significance of Rubin's mass production is exactly pushing such demand from product planning to supply chain material preparation, equipment procurement and mass production.
01
Rubin Mass Production Further Boosts Demand for High-end PCBs
From the perspective of the supply chain, the schedule for Vera Rubin to enter full mass production has improved the certainty of PCB demand. Microsoft CEO Satya Nadella confirmed on August 21 that the first batch of production-grade Rubin units have arrived at Microsoft's data centers. NVIDIA further disclosed on August 27 that AWS has received one Vera CPU server and one Rubin GPU. At this stage, it is not possible to judge the delivery volume of complete full racks based on this information, nor can we conclude that all cloud services have been fully opened to the public, but the fact that Rubin hardware has started to enter customer data centers has been confirmed.
The increase in PCB demand first comes from the expansion of system scale. Vera Rubin is not a GPU sold separately, but a full platform consisting of CPU, GPU, network, switching and rack systems. PCBs are required for compute trays, switch trays, mid-boards, network boards and optical module boards. As a single rack integrates more computing and communication resources, the quantity, area and value of the boards will also increase accordingly.
The more important change comes from specification upgrading. AI servers need to operate in environments with high power and high-speed signals, which raises higher requirements for PCB layers, low-loss materials, hole density, backdrilling accuracy and impedance control. The increase in the number of layers will bring more lamination, drilling and electroplating processes, while high-speed signals require the use of higher-grade copper clad laminates, copper foils and fiberglass fabrics. Therefore, the changes brought by Rubin are not just an increase in shipment area, but also a rise in the proportion of high-end products in the industry's total output value.
The 34-layer AI server board showcased by Zhending on September 2 is a representative product signal recently. The company disclosed that this product adopts Ultra/Extreme Low Loss materials, M8-level technology, VIPPO, backdrilling and high aspect ratio electroplating. The company used the wording of "showcase" instead of "mass production", and has not announced relevant customers and orders, but the product has already reflected the upgrading direction of next-generation AI server boards towards higher layers and lower loss.
The 1.6T, XPO and NPO optical module products showcased at the same event indicate that PCB demand is spreading from server motherboards to high-speed networks. Large-scale AI clusters require a large number of switches and optical modules to connect computing nodes. After the switching rate continues to upgrade from 400G and 800G to 1.6T, the material and processing requirements for optical module boards, switch boards and related carrier boards will also increase. If we only calculate the server boards corresponding to GPUs, it is easy to underestimate the contribution of the network side to PCB demand.
Therefore, the demand change brought by Vera Rubin's mass production has two implications: first, AI servers and racks have started to generate actual incremental orders, and second, supporting segments such as high-speed switching, optical interconnection and power supply are upgrading simultaneously. The former expands the total PCB demand, while the latter increases the proportion of high-end boards, and the two together constitute the main source of current growth.
02
Demand Has Been Transmitted from Board Manufacturers to Equipment, Consumables and Materials
The semi-annual reports intensively released in late August show that the demand brought by AI has been reflected in enterprises' performance, rather than staying in industry forecasts. Shanghai Dinan Electric Co., Ltd. recorded a revenue of 11.33 billion yuan from data communication PCBs in the first half of the year, a year-on-year increase of 73.46%; the revenue from PCB products with 32 layers and above increased by 190.83%. In contrast, the revenue from smart automotive applications only increased by 1.11%, with the gross margin dropping by 6.22 percentage points.
This set of data indicates that the core of current PCB growth comes from AI servers and high-speed switches, rather than simultaneous recovery of all downstream markets. More than 90% of overseas customers of Shanghai Dinan Electric's Thailand base have completed certification, and products within 30 layers have entered mass production, covering 400G switches and AI servers, while 800G switch products are in the sampling stage. As higher-speed products gradually pass certification, data communication boards will remain the main direction for the company's capacity expansion and product upgrading.
Shenzhen Nan Circuit Co., Ltd. recorded PCB business revenue of 8.552 billion yuan in the first half of the year, a year-on-year increase of 36.32%; the revenue from packaging substrates reached 3.667 billion yuan, a year-on-year increase of 110.76%, with the gross margin reaching 31.35%. The company stated that the revenue from data center-related orders has exceeded 2 billion yuan. This shows that the demand for AI infrastructure involves not only system PCBs, but also packaging substrates used by processors, storage and power management chips.
After board manufacturers' orders and capacity expansion increase, orders for equipment enterprises usually also rise at an early stage. Han's CNC Technology Co., Ltd. recorded revenue of 4.985 billion yuan in the first half of the year, a year-on-year increase of 109.29%, of which the revenue from drilling equipment reached 3.62 billion yuan; the attributable net profit increased by 263.45%. The company lists high-layer multi-layer HDI boards, 800G and 1.6T optical module mSAP carriers as the main sources of demand. The increase in the number of layers and holes will directly raise the demand for laser drilling, mechanical drilling, exposure, forming and testing equipment.
The rapid growth of equipment performance also reflects that board manufacturers are expanding production lines in advance for subsequent orders. However, the net cash flow from operating activities of Han's CNC during the same period was negative 1.075 billion yuan, indicating that there is a time lag between equipment production, delivery, acceptance and payment collection. The demand growth is clear, but equipment orders still need to go through the acceptance process to be fully converted into cash flow.
The consumables segment is more sensitive to operating rates. Dingtai Hi-Tech Co., Ltd. recorded revenue of 1.943 billion yuan in the first half of the year, a year-on-year increase of 114.85%, and the attributable net profit increased by 325.12%; the overall monthly production capacity of drill bits has exceeded 160 million units. Its Thailand plant currently has a monthly production capacity of 8 million units, with the first-phase planned capacity of 15 million units. After the PCB layers and hole density are improved, the number of drill bits consumed per board increases, and the wear and replacement frequency of drill bits also rises. Therefore, the demand for consumables will increase along with the rise in production volume and processing difficulty.
Xinji Micro Equipment Co., Ltd. recorded revenue of 1.106 billion yuan in the first half of the year, a year-on-year increase of 68.95%, and the attributable net profit was 281 million yuan, a year-on-year increase of 98.13%. The company disclosed that carbon dioxide laser drilling equipment has transitioned from customer verification to stable mass delivery. The transition of equipment from verification to mass delivery is an important signal that board manufacturers' capacity expansion has moved from the planning stage to the implementation stage.
The material segment is also accelerating investment. China Composite Materials Co., Ltd. announced on September 1 that it will adjust the original project with an annual output of 36 million meters of high-frequency high-speed electronic fiberglass fabrics to a project with an annual output of 25.13 million meters of LDK generation I and generation II products. Although the planned production capacity has decreased, the total investment has increased from about 1.693 billion yuan to 3.021 billion yuan. The company explained that after July, demand quickly shifted from LDK generation I to LDK generation II, and the latter is in short supply.
China Jushi Co., Ltd. stated on August 27 that the inventory of electronic fabrics is still at a low level with tight supply; the first-phase 100,000-ton electronic-grade fiberglass production line in Huai'an has reached full production, and the second-phase 50,000-ton electronic yarn and 320 million-meter electronic fabric project is still under construction. High-end electronic fabrics, copper foils and resins are important raw materials for low-loss copper clad laminates. The tight upstream supply will push up material prices, and also prompt board manufacturers to stock up in advance.
From the revenue growth of board manufacturers, to equipment orders, drill bit capacity expansion and electronic fabric investment, demand has spread upward along the PCB industry chain. This synchronous change indicates that the current round of demand expansion covers a wide range. It shows that AI server demand not only improves the product structure of a few board manufacturers, but also starts to increase equipment utilization, consumable consumption and material investment intensity.
03
The Structural Nature of Growth
In addition to corporate performance, industry statistics are also verifying the increase in demand. The Global Electronics Association announced on August 25 that North American PCB orders in July increased by 62.0% year-on-year, shipments increased by 14.5% year-on-year, orders have increased by 33.3% since the beginning of the year, and the three-month order-to-shipment ratio reached 1.46. A ratio higher than 1 usually means that orders are growing faster than shipments, corresponding to incremental sales in the next 3 to 12 months.
The Japanese market also maintains growth. The latest data from the Ministry of Economy, Trade and Industry shows that the output value of electronic circuit substrates in July reached 74.385 billion yen, a year-on-year increase of 29.2%. It should be noted that this is the growth of output value, not equal to the year-on-year growth of production capacity. Data up to June from the Japan Electronic Circuit Industry Association also shows that module substrates account for about 6.9% of the area of electronic circuit substrates, but contribute about 42.4% of the output value.
Not all module substrates are used for AI, but their low proportion in area and high proportion in output value indicate that high-value products are driving industry revenue. For the current PCB cycle, the growth rate of output value is more worthy of attention than the growth rate of area, because the unit value of high-layer boards, packaging substrates and high-speed materials is significantly higher than that of ordinary boards. The rise in Japan's output value is mutually confirmed with the growth of high-end products of enterprises in Chinese mainland and Taiwan region of China, reflecting that this change has cross-regional characteristics.
However, the current growth is still structural. The data communication business of Shanghai Dinan Electric has increased significantly, while the growth rate of the automotive business is almost stagnant; high-layer boards, packaging substrates, optical module boards and related equipment and consumables have strong performance, while ordinary multi-layer boards, consumer electronics boards and some automotive boards have not seen the same degree of improvement. Therefore, "rising PCB demand" cannot be simply understood as all products are raising prices and operating at full capacity at the same time, but should be understood that AI-related products are significantly driving up the overall growth rate of the industry.
04
Conclusion
The mass production of Vera Rubin is an important node for the recent changes in PCB demand. It pushes the next-generation AI platform from the planning stage to production and delivery, and further raises the demand for server boards, switch boards, optical module boards, packaging substrates and related equipment, consumables and materials. The semi-annual reports of enterprises since late August, North American order data and Japan's output value data have provided multi-angle verification for such demand.
The core of this round of changes is not complicated: The construction of AI servers continues to increase, each system uses more PCBs, and the technical specifications and unit value are also improving. The resulting growth is first concentrated in high-layer, high-speed low-loss and high-density products, and spreads to drilling equipment, drill bits and high-end electronic fabrics. In the short term, Rubin's production ramp-up and data center investment are still driving up demand; in the medium term, it is necessary to observe whether the capacity expansion speed can match the actual shipment volume. In general, the PCB industry has entered a new round of growth driven by AI infrastructure, but obvious product differentiation will still be maintained within the industry.
This article is from the WeChat official account "Semiconductor Industry Insight" (ID: ICViews), author: Jun Xi, published with authorization from 36Kr.