A recent research report from Western Securities Co.,Ltd. analyzes the core technological shifts and market dynamics in the upstream printed circuit board (PCB) equipment industry.

Primary Technological Shifts in the Current Cycle

The report identifies the central changes in this PCB cycle as focusing on multi-layer lamination, high-frequency material iteration, and finer line widths. Firstly, multi-layer lamination involves more than just adding layers; each additional layer raises the requirements for inter-layer alignment precision, lamination uniformity, and drilling quality. This drives a surge in demand for drilling machines, drill bits, and pulse plating equipment. Secondly, regarding high-frequency material iteration, materials like quartz fabric, with their high hardness and melting point, are accelerating the demand for drilling machines and bits. Thirdly, in the pursuit of finer line widths, the semi-additive process (SAP/mSAP), known for its high precision and stability, is becoming the core technical solution for manufacturing high-end PCBs and substrate-like PCBs (SLP). This trend is driving accelerated demand and value increases for equipment such as ultrafast laser drilling machines, flash plating systems, and exposure machines.

Assessing the Market Potential

Capital expenditure (capex) for leading A-share listed PCB companies continued to accelerate sequentially in Q1 2026, totaling 145.58 billion yuan, a year-on-year increase of 162%. Within this, Shenghong Technology accounted for 35.74 billion yuan (yoy +390%), and Pengding Holdings for 28.22 billion yuan (yoy +130%). Shenghong Technology plans total investments not exceeding 200 billion yuan for 2026, a threefold increase compared to 66 billion yuan in 2025. Pengding Holdings expects its 2026 capital expenditure to reach 168 billion yuan, up 154% year-on-year.

Referencing Shengyi Electronics' prospectus, 72.11% of PCB production line capex is allocated to equipment procurement and installation. Key investment areas include drilling, plating, lamination, and exposure (pattern transfer) equipment. Taking the 2025 capex of 307 billion yuan from domestic listed PCB companies (incomplete statistics) as an example, and estimating based on 75% for equipment investment and a 30% share for drilling machines, this corresponds to a procurement demand of approximately 69.1 billion yuan for drilling equipment. In 2025, the domestic drilling machine leader, Han's Laser SZ, generated about 42 billion yuan in revenue from drilling-related equipment, representing a 60.78% market share. With significant capacity expansions planned by leading firms like Shenghong Technology and Pengding Holdings in 2026/2027, the corresponding revenue and profit elasticity for equipment companies is expected to be substantial.

The report concludes that, driven by AI, the PCB industry continues to experience high-growth prosperity. The dual drivers of industry capacity expansion and technological upgrades are expected to benefit midstream equipment companies continuously.

Associated Risks

Potential risks highlighted include intensifying industry competition, slower-than-expected product development progress, and delays in emerging sector advancements.