AI Servers Reshape the PCB Industry Chain: From Material Upgrades to Equipment Bottlenecks, Who Is Seizing the Next Opportunity?

The PCB industry in 2026 is experiencing an unprecedented wave of capacity expansion. However, unlike any previous cycle, the driving force this time is not the gradual penetration of end products, but entirely new demand created by the explosion of AI computing power. In 2026, global AI server shipments are expected to surpass 2 million units, a year-on-year increase of 55%, directly driving a more than 110% surge in demand for high-end PCBs. The value of PCBs used in a single AI server is nearly 10 times that of an ordinary server.

Citi Securities projects that the global AI-related PCB market size could reach RMB 152 billion, RMB 307 billion, and RMB 562 billion in 2026, 2027, and 2028, respectively. AI is reshaping the growth logic of the PCB industry.

Amidst this feast, the PCB industry chain—from capacity expansion to materials to equipment—is witnessing a layered game of supply and demand transmission.

This article is compiled by Bai Neng Yun Ban based on market conditions and is for reference only.

I. Capacity Expansion: Capital Expenditure Surges, Leading Companies Take the Lead

In 2025, the capital expenditure of 9 leading PCB companies reached RMB 26.7 billion, a year-on-year increase of 111%; in the first quarter of 2026, capital expenditure reached RMB 12.5 billion, with the year-on-year growth rate further climbing to 182%.

Entering 2026, the expansion momentum has intensified. According to data from the Cailianshe Xingyun database, as of June 9, at least 20 A-share listed PCB companies had announced expansion plans, involving total investments exceeding RMB 80 billion. Furthermore, statistics from some brokerages indicate that since the beginning of 2026, Chinese PCB manufacturers have disclosed cumulative expansion investments reaching RMB 71.2 billion.

The actions of leading companies are particularly noteworthy. Victory Giant Technology unveiled a RMB 20 billion annual investment plan, fully focusing on high-multilayer PCBs for AI servers and optical module production lines. Wus Printed Circuit (Kunshan) Co., Ltd. has been expanding at a pace of nearly "one investment per month," with cumulative investments for the year reaching RMB 17.6 billion. Zhending Technology (Avary Holding) invested RMB 11 billion in building a high-end PCB project base in Huai'an, with total annual capital expenditure reaching RMB 16.8 billion. Additionally, Welgao Electronics announced in July a plan to raise no more than RMB 1.3 billion through a private placement, targeting high-end AI-related PCBs and a smart manufacturing project in Thailand.

Currently, capacity expansion is still led by Victory Giant Technology, Wus Printed Circuit, and Zhending Technology, with companies like Shennan Circuits, Kinwong, Founder Technology, and Guanghe Technology expected to pick up the pace subsequently.

II. Material Side: Copper Foil, Fiberglass Fabric, and Resin – The "Three Pillars" of PCB

A PCB is not a simple "board." Copper foil, fiberglass fabric (electronic cloth), and resin together form its physical foundation.

Copper foil is responsible for conducting electricity, acting as the "highway network" on the PCB. Its thickness uniformity, conductivity, and surface quality directly impact impedance control and signal integrity.

Electronic fabric (glass fiber cloth), woven from extremely fine glass fibers, acts like "rebar" providing mechanical strength and dimensional stability. Its dielectric constant (Dk) and dissipation factor (Df) directly affect the transmission speed and energy loss of high-speed signals.

Resin acts like "cement," bonding the fabric and copper foil together while providing insulation protection.

When high-end PCBs are upgraded, it's not just the board manufacturers expanding production; the specifications of all three materials are also upgraded simultaneously, making supply gaps more likely to concentrate upstream.

(I) Copper Foil: The Smoother, The More Valuable

As AI chip computing density increases, single-channel signal transmission rates have surpassed 224 Gbps, with Nyquist frequencies reaching 56 GHz. At these high frequencies, the skin depth of the signal is only about 0.27 μm—current flows almost entirely in the extremely thin surface layer of the copper foil. Ordinary copper foil has a surface roughness of about 6-8 μm, far exceeding the skin depth, leading to severe conductor losses and signal reflections.

The solution is HVLP (Very Low Profile) copper foil. Through special surface treatment processes, HVLP copper foil has progressively reduced roughness from Rz ≤ 2.0 μm in the first generation to Rz ≤ 0.5 μm in the fifth generation—the higher the generation, the smoother the surface, and the lower the signal loss.

However, the supply of high-end HVLP copper foil cannot keep up with demand. According to industry sources, the supply gap for HVLP Level 4 copper foil is estimated to reach 1,500 tons in 2026 and expand further to 2,500 tons in 2027. Third-party agency calculations show that in Q2 2026, the monthly demand for HVLP Level 4 copper foil for AI servers surged from 590 tons to 1,300 tons, while available supply was just over 600 tons, resulting in a monthly gap of 666 tons—a shortage rate exceeding 50%. Goldman Sachs estimates that, considering that the yield rate for HVLP Level 3+ products from major suppliers is only maintained at 70%-80%, the actual supply gap of effective industry capacity will reach 28%, 39%, and 38% from 2026 to 2028, respectively.

This supply-demand imbalance is directly reflected in prices. Processing fees for HVLP Level 4 copper foil have soared to RMB 200,000/ton, nearly 10 times higher than the RMB 18,000-22,000/ton for ordinary copper foil. The trend of rising copper foil processing fees is clear, and the supply shortage is unlikely to reverse in the short term.

(II) Electronic Fabric (Fiberglass Cloth): Three Generations of Upgrades from E-Glass to Q-Glass

Electronic fabric is also facing structural upgrades. The first generation, E-Glass, has mature processing technology. The second generation, Low-Dk modified specialty glass fabric, improves dielectric properties by adjusting the glass formulation and has become the mainstream substrate in AI computing servers. The third generation, Q-Glass, is oriented towards solving ultra-high-frequency signal loss issues for the future.

Simultaneously, as PCB layer counts increase, overall thickness needs to be controlled. Electronic fabric is being upgraded from styles like 1080 and 1087 towards 1067 and even lower specifications. The "split-fiber flattening" process uses mechanical or high-pressure water jets to spread out fiber bundles and eliminate voids, ensuring high-speed signals transmitted on differential pairs do not suffer from timing skew.

Prices for electronic fabric have also been climbing. The average selling price of Grace Fabric Technology's electronic fabric jumped from RMB 4.5/meter in Q1 2025 to RMB 9.78/meter in Q1 2026, a year-on-year increase of 117%. Since the beginning of 2026, electronic fabric has undergone 5 rounds of price adjustments within the year. The average price for the mainstream 7628 specification product reached RMB 7.4/meter, achieving a 100% recovery from the low levels seen in Q3 2025. In Q2, the average price of 7628 electronic cloth further rose to RMB 6.7/meter (up 28.8% QoQ), and surged to RMB 8.6/meter in July, breaking through the previous peak of the 2021 cycle.

(III) Copper Clad Laminate (CCL): Ten Rounds of Price Hikes Transmit Upstream Pressure

As the core substrate material for PCBs, CCL is the ultimate bearer of price pressures from copper foil, electronic fabric, and resin. Since 2025, industry leader Kingboard Laminates has implemented 10 rounds of price increases on its main products, with some product types seeing a single increase of up to 20%. Entering 2026, the pace of price hikes has further accelerated—by July, Kingboard Laminates had already issued six price increase notices within the year, with the latest adjustment occurring just 20 days after the previous one. Industry data shows that cumulative price increases for various CCL products from Kingboard Laminates have exceeded 50% since the beginning of 2026, marking the highest frequency of price adjustments in the industry in nearly three years.

This wave of price increases has directly boosted the performance of the industry chain. CCL leader Shengyi Technology expects its net profit attributable to shareholders for the first half of 2026 to be RMB 3.099 billion to 3.298 billion, a year-on-year increase of 117% to 131%.

III. Equipment Side: Surface Treatment Machines and Air-Jet Looms – Two Critical "Bottleneck" Links

Material expansion ultimately depends on equipment. In the production chains of copper foil and electronic fabric, two core equipment segments are becoming key bottlenecks restricting capacity release.

(I) Copper Foil Equipment: Surface Treatment Machines Are the Real Bottleneck

The copper foil production process includes three main stages: copper dissolving, foil forming (using cathode rolls), and post-treatment (surface treatment). The localization rate for cathode rolls and foil-forming machines is already relatively high—in 2024, Taijin New Energy held a 45% share of the cathode roll market, and Hongtian Technology held a significant share; Hontian's market share in the foil-forming machine market reached 48%.

However, the core incremental equipment for expanding HVLP copper foil production is the surface treatment machine. The challenge lies in uniformly growing micro-copper particles, only 50-200 nm in size, on the smooth copper surface to enhance adhesion with the resin without increasing roughness. Surface treatment machines for HVLP Levels 1-3 are essentially localized, but HVLP Levels 4-5 still rely heavily on imported suppliers like Japan's Mitsumi, Newlong, and PNT. Core equipment, such as the copper foil surface treatment machines from Japan's Nippon Steel and Mitsumi, is currently in short supply.

Chinese equipment manufacturers are focusing on promoting the substitution of surface treatment machines in the HVLP Levels 4-5 segment. Hontian has achieved industrialization of its full series of equipment covering thicknesses from 3.5 μm to 100 μm and is prioritizing the localization of HVLP Level 4/5 surface treatment machines.

(II) Electronic Fabric Equipment: Air-Jet Looms Heavily Dependent on Imports

Electronic fabric production equipment primarily includes furnace melting lines, twisting machines, and weaving looms. The air-jet loom is the most critical piece of equipment—it uses compressed air as the weft insertion medium, propelling the weft yarn across the warp shed through airflow, enabling high-speed, high-precision weaving.

However, more than 90% of the world's high-end electronic fabric production capacity is provided by Japan's Toyota JAT910 series looms, indicating an extremely high import dependency. Looms from Toyota and Tsudakoma are similarly in short supply. Some analyses suggest that orders for imported equipment are already booked out to 2028 and beyond.

In terms of local substitution, Titan Technology's TQ600 loom is undergoing verification in the thin-fabric market, and the company also has a presence in twisting machines. Saurer's Volkmann VGT-9 series has already begun to replace Toyota's twisting machines. However, verification and volume production of ultra-thin looms still require more time.

IV. Industry Chain Panorama: The Transmission Chain from Expansion to Materials to Equipment

The logic of the entire industry chain is clear:

· Capacity Expansion: Led by Victory Giant Technology, Wus Printed Circuit, and Zhending Technology, followed by Shennan Circuits, Kinwong, Founder Technology, etc.

· Copper Foil Material: Tongling Copper Foil has production capabilities for HVLP Levels 1-4 and has broken through key performance indicators for Level 5; Defu Technology supplies HVLP Levels 1-2 in bulk and achieved the first domestic substitution breakthrough for HVLP Level 3 mass production; Hailiang Group has made progress in high-end foils like RTF and HVLP.

· Electronic Fabric Material: China Jushi is progressing in R&D for low-dielectric glass fiber and fabric; Grace Fabric Technology has long-term cooperation with CCL manufacturers like Elite Material, Iteq, Shengyi, and Panasonic; Feilihua has introduced high-end ultra-thin, super-thin fabrics, and ultra-fine yarns; Sinoma Science & Technology has the capability to build its own drawing equipment.

· Key Equipment: Taijin New Energy is a supplier of cathode rolls, copper foil titanium anodes, foil-forming machines, and surface treatment machines; Hontian's main revenue source is electrolytic copper foil equipment, with a 48% market share in China for foil-forming machines in 2024; Titan Technology and Saurer are advancing localization in looms and twisting machines, respectively.

Conclusion

The demand for PCBs driven by AI servers is not just a simple "volume" increase but a "qualitative" leap. From the ultra-low roughness requirements of HVLP copper foil, to the dielectric performance upgrades of Low-Dk electronic fabric, to the equipment bottlenecks of surface treatment machines and air-jet looms, every link is testing the technological depth of China's PCB industry chain.

Orders for leading PCB manufacturers are already locked in through 2027. As new capacity added in the second half of 2026 and into 2027 gradually ramps up, the supply capacity for high-end PCBs is expected to be fully released by 2028. In this AI-driven industrial wave, those who can take the lead in overcoming the "bottleneck" links in materials and equipment are most likely to seize the next opportunity.