The printed circuit board (PCB) sector in the A-share market experienced a broad-based surge on June 15th, with the PCB concept index soaring nearly 9%. Related ETFs, such as the Huabao Electronic ETF, saw gains exceeding 7%, indicating accelerated capital inflows into the sector.

What's Driving the PCB Rally?

Several key factors are fueling this market enthusiasm. On the supply side, geopolitical conflicts in the Middle East have led to a shutdown at the Jubail Industrial Zone in Saudi Arabia, directly impacting approximately 70% of the global supply of high-purity polyphenylene ether (PPE) resin. As a core raw material for high-end PCBs and high-speed copper-clad laminates (CCL), this supply disruption has pushed up costs and product prices across the entire industry chain. The market narrative has swiftly shifted from "demand-pull" to "pricing power driven by rigid supply contraction."

On the demand side, Nvidia's new-generation Rubin architecture upgrade is significantly boosting the PCB value per unit. In the Rubin VR200 server rack, PCB layer counts have increased from 20-24 to 26-32, material grades have been upgraded from M7 to M8, and new ConnectX modules and mid-plane PCBs have been added. This has driven the PCB value per rack to $116,700, a massive 233% increase from the previous GB300 generation. Morgan Stanley estimates that the global AI optical module PCB market will see a compound annual growth rate of 83% from 2025 to 2028.

Regarding price transmission, the supply-demand mismatch has triggered a comprehensive wave of price increases throughout the industrial chain, with greater pricing elasticity the further upstream one goes. The average price of electronic glass fabric has doubled from last year's low point. Leading CCL manufacturer Jiantao Accumulation Board has implemented four price hikes this year, with a cumulative increase exceeding 40%.

To secure production capacity, giants like Nvidia are even bypassing midstream players to sign lock-in agreements for over a year directly with upstream copper foil and glass fabric suppliers. A Citigroup research report explicitly noted that while electronic glass fabric has the slowest capacity growth, it possesses the strongest pricing power and price elasticity.

Global Competitive Landscape and Key Companies

Examining the global and domestic company landscape reveals a new competitive structure for the PCB industry chain amid technological transformation.

The competitive landscape exhibits three core characteristics. First, technological barriers are reshaping the industry moat. High-end PCB manufacturing has shifted from labor-intensive to capital- and technology-intensive. Core technologies like hundred-layer orthogonal backplanes, M9/M10 high-end materials, and mSAP are only mastered by a few leading companies capable of mass production. Coupled with typically long customer qualification cycles of 1-2 years, technology and capacity create extremely high barriers.

Second, industry concentration is continuously increasing. Driven by considerations for yield rates and R&D efficiency, downstream customers are accelerating order concentration towards leading manufacturers. Companies that first break through high-end capacity bottlenecks will enjoy the dual benefits of volume-price increases and market share gains.

Finally, a window for import substitution has officially opened. The expansion cycle for overseas high-end materials typically takes 18-24 months. The current supply-demand mismatch provides a clear historical opportunity for domestic manufacturers that have completed technological breakthroughs and customer qualifications to enter the global core supply chain.

Comparing PCB Industry Leaders: Shengyi Technology vs Wus Printed Circuit vs Shennan Circuits

Using a comparable company analysis skill, we can compare the three aforementioned PCB industry leaders: Shengyi Technology, Wus Printed Circuit, and Shennan Circuits.

The analysis outputs three key comparison tables covering core financials, main business structure, and consensus earnings forecasts.

The data reveals distinct differences among the three companies. Shengyi Technology is the absolute upstream CCL leader, ranking top two globally, and is a core player in the import substitution of AI server/communication high-frequency & high-speed CCL. It has the largest revenue scale, projected at 28.4 billion yuan for 2025, but its PCB business accounts for only about 32% of its operations. It commands the highest P/E valuation, reflecting high growth expectations.

Wus Printed Circuit focuses on midstream high-end PCB manufacturing, specializing in communication base station and AI server boards. It boasts the highest gross margin (~36%) and an export ratio exceeding 82%. It shows the fastest net profit growth rate and has the lowest estimated P/E for 2026 at 42x, indicating relative undervaluation.

Shennan Circuits operates as a midstream-downstream integrated solution provider with a dual-engine strategy of PCBs and packaging substrates (IC载板). It is a scarce domestic player in packaging substrates. While it has the most comprehensive product line, its gross margin is moderate (~29%), as the packaging substrate business is still in a growth phase, which weighs on the overall margin.

Key Investment Themes for PCB

For specific investment themes, three key logics warrant close attention going forward. The first theme is the "pricing elasticity" of upstream materials, focusing on segments like electronic glass fabric, PPE resin, and high-end copper foil. The core logic lies in rigid supply and long expansion cycles, offering the strongest short-term earnings elasticity. Revenue from Taiwanese PCB raw material suppliers surged 31% year-over-year in April, significantly higher than the 18% growth for PCB manufacturers, providing supporting evidence for this logic.

The second theme is the "value re-rating" of midstream copper-clad laminates. Leading enterprises like Shengyi Technology are undergoing a valuation transformation from "cyclical manufacturing" to "core AI material platforms." They will directly benefit from product mix upgrades (e.g., increased proportion of M7/M8 grade materials) and smooth price transmission mechanisms.

The third theme is the "winner-takes-most" dynamic in downstream PCB manufacturing. The core logic is that extreme scarcity of high-end capacity leads to high order concentration towards leading players. Currently, global AI server PCB orders are backlogged until 2027. Manufacturers with mass production capabilities for high-order HDI and high multilayer boards possess the strongest certainty and sustainability in earnings growth.

Overall, in subsequent investment tracking, it is crucial to closely monitor North American cloud service providers' capital expenditure guidance, the recovery progress of PPE resin supply, and quarter-on-quarter changes in the gross margins of core companies. These factors will continuously verify the realization of the pricing power thesis.