The AI revolution is in full swing, and IC substrates are emerging as a key beneficiary. Looking ahead to 2026, major overseas cloud service providers (CSPs) are ramping up their capital expenditures, betting big on AI data centers. Data indicates that the combined capital expenditure of the nine largest overseas CSPs will surge to $830 billion in 2026, representing a staggering year-on-year growth rate of 79%. This wave of capital expansion is directly fueling an exponential explosion in demand for AI servers and core hardware. Within this surge, a previously bottlenecked component—the IC substrate—is reaching an inflection point of rapid growth.

So, what exactly is an IC substrate? Also known as an IC packaging substrate, it is the crucial packaging base that connects the chip to the PCB, responsible for electrical interconnection, physical support, heat dissipation, and chip protection. Forecasts suggest that by 2031, the global IC substrate market will skyrocket to $26.47 billion, with a compound annual growth rate of approximately 9.2%. Facing this expanding market, which domestic manufacturers are poised to benefit directly? PCB Bancorp (ASX: PCB) is a company that cannot be overlooked.

Initial Steps and Business Expansion

Founded in 1999, the company initially started with PCB prototypes and managed to achieve a remarkable overtaking within just over a decade, establishing itself as a world-class player. Leveraging its prominent industry position, the company successfully went public in 2010. Subsequently, it began to diversify its business horizontally: in 2012, it entered the IC packaging substrate field; in 2015, it acquired Harbor to venture into the semiconductor test board market. Currently, the company has established three main product lines: PCB printed circuits, semiconductor test boards, and IC packaging substrates.

Revenue Breakdown and Growth Drivers

From a revenue structure perspective, PCB printed circuits undoubtedly remain the company's primary revenue pillar. In 2025, this product line generated revenue of 4.897 billion yuan, accounting for 68.07% of total revenue. However, in terms of growth rate, the IC packaging substrate business has shown the most impressive performance. In 2025, the company's IC packaging substrate revenue reached 1.67 billion yuan, a substantial year-on-year increase of 49.71%, far outpacing the growth of PCB printed circuits (13.89%) and semiconductor test boards (41.59%). Over a longer timeframe from 2020 to 2025, the company's IC packaging substrate revenue grew from 336 million yuan to 1.67 billion yuan, nearly quintupling in five years. Its share of total revenue also increased from 8.33% to 23.22%, gradually evolving into the company's second growth engine.

Strategies for Success in IC Substrates

How has PCB Bancorp managed to carve out a significant space in the IC packaging substrate field? The answer lies in three key strategies.

The first is technological advancement. IC packaging substrates typically require line precision of 8–15μm (about one-tenth the width of a human hair), have up to 20 or more layers, and involve hundreds of manufacturing steps, representing a vast technological gap compared to standard PCBs. Due to these high barriers, the IC substrate market was long dominated by manufacturers from Japan, South Korea, and Taiwan. To break through and enable domestic substitution, PCB Bancorp initially targeted the relatively less challenging CSP packaging substrates before gradually extending into FCBGA packaging substrates. Simultaneously, it has consistently invested substantial capital in core process R&D. For instance, from 2021 to Q1 2026, the company's cumulative R&D expenditure reached 2.203 billion yuan, with the R&D expense ratio consistently maintained above 5%. Through this intensive investment, the company has mastered multiple IC substrate production processes, including the subtractive method (Tenting), modified semi-additive process (mSAP), and semi-additive process (SAP). Notably, the company has successfully achieved mass production introduction for mSAP fine-line products. Furthermore, its FCBGA packaging substrate project is ready for mass production, with overall yield rates continuously improving and sample order volumes showing significant year-on-year growth.

The second strategy is capacity expansion. Technological breakthroughs must go hand-in-hand with capacity expansion to secure a market position. As early as 2012, PCB Bancorp invested over 400 million yuan to establish an IC packaging substrate production line in Guangzhou with a monthly capacity of 10,000 square meters. It wasn't until the first half of 2018 that the company finally passed Samsung's certification, officially becoming a supplier. By the end of that year, the IC substrate production line was operating at full capacity. Building on this success, the company immediately launched a second-phase expansion project—adding another production line with a monthly capacity of 10,000 square meters. By the end of 2020, total capacity reached 20,000 square meters per month, with the yield rate of the first production line maintained above 94% throughout the year.

However, the company's ambitions did not stop there. In 2022, it formally set its sights on FCBGA packaging substrates. On February 8 of that year, it announced plans to invest 6 billion yuan to construct a Guangzhou FCBGA packaging substrate project and an R&D base. The FCBGA project is divided into two phases, each planning a capacity of 10 million units per month. Subsequently, on June 1, 2022, the company's wholly-owned subsidiary announced plans to invest 1.2 billion yuan to build an FCBGA packaging substrate production line with a monthly capacity of 2 million units. As of the end of 2025, the progress of these two projects had reached 63.41% and 91.72%, respectively.

The third strategy is overseas expansion. After solidifying its position in the domestic market, PCB Bancorp turned its attention to the broader global market to attract overseas clients. The data shows the company has achieved notable success overseas. From 2021 to 2025, its overseas revenue grew from 2.525 billion yuan to 3.276 billion yuan, with the overseas revenue share consistently maintained above 45%. More crucially, overseas gross margins are significantly higher than domestic ones. For example, in 2025, the company's overseas gross margin was 26.35%, compared to a domestic gross margin of just 6.1%—more than four times higher.

Financial Performance and Future Outlook

Through solid technological development and forward-looking capacity planning, PCB Bancorp has been among the first to realize performance growth. In the first quarter of 2026, the company achieved revenue of 1.818 billion yuan, a year-on-year increase of 15.1%; net profit attributable to shareholders reached 18.7447 million yuan, surging 100% year-on-year; and adjusted net profit was 28.1739 million yuan, skyrocketing 308.32% year-on-year.

In summary, through over a decade of dedicated internal development, PCB Bancorp has managed to master the challenging IC substrate technology. Currently, the company's three driving wheels—technological breakthroughs, capacity realization, and overseas scaling—are all in motion. The remaining factor is simply time for these efforts to fully materialize.