AI drives PCB development | Industry discovery

The rapid development of the AI ​​industry has driven a number of industries and companies in the industry chain, among which PCB is an area that few local companies are good at.

Text/Daily Financial Report Su Feng

The launch of the artificial intelligence chat robot ChatGPT marks a leap in the application of AI technology, and the number of model parameters and computing power requirements have increased significantly.

In the past five years, neural network models have developed rapidly, and the number of model parameters has increased exponentially. On November 30, 2022, the American artificial intelligence company Open AI opened the ChatGPT program, entering the era of commercial application, bringing huge economic effects. The number of ChatGPT parameters has reached 175 billion. It requires a lot of computing power to conduct simulation training and store knowledge.

UBS analysts mentioned that in terms of computing power, ChatGPT has imported at least 10,000 NVIDIA high-end GPUs. Internet giants Alibaba, Baidu and other companies are also developing ChatGPT-like applications. It is expected that there will be a large demand for high-computing GPUs in the future, which will directly stimulate the PCB industry.

Increment Market

According to Prismark data, the largest downstream application in the global PCB market in 2021 is the communications field, accounting for 32%; followed by the computer industry, accounting for 24%; then the consumer electronics field, accounting for 15%; the server field Accounting for 10%, the market size is US$7.804 billion and is expected to reach US$13.294 billion in 2026. The compound growth rate is 11.2%, which is the fastest growing field in the downstream, higher than the industry average of 4.8%.

AI technology is booming and widely used, and the demand for high-performance computing power chips is unprecedentedly strong, driving the overall performance of servers to improve. PCIe protocol upgrades promote server PCB material upgrades, process difficulty increases, and value increases. The transmission rate of the currently commonly used PCIe4.0 interface is 16Gbps, and the number of server PCB layers is 12-16. As the server platform is upgraded to PCIe5.0, the transmission rate reaches 36Gbps, the number of PCB layers will reach more than 18 layers, and the increase in the number of layers will also lead to an upgrade in board thickness, gradually upgrading from 2 mm for 12-layer boards to 3 mm. above.

At the same time, PCIe5.0 requires CCL materials to be upgraded to Very Low Loss grade. With the upgrade of materials, the copper and resin materials of M6 grade and above have a loss of bonding force, the difficulty of the production process has increased, and the unit price of PCB has increased significantly. Currently, servers/storage require six to sixteen layers of boards and packaging substrates. High-end server motherboards have more than sixteen layers, and backplanes have more than twenty layers. In the future, as the demand for servers increases, the technical level of PCBs will also need to be improved. non-stop upgradin. According to Prismark data, the price of 8-16 layer boards in 2021 will be US$456/square meter, while the price of 18-layer and above boards will be US$1,538/square meter. In the future, the upgrade of transmission rates brought about by computing power will drive a significant increase in the value of PCBs.

The rapid development of the AI ​​industry has led to a number of industries and companies in the industry chain, among which PCB is an area that few local companies are good at. China’s PCB output value accounts for more than half and has gradually become the center of the global PCB industry.

According to Prismark statistics, the total output value of the global PCB industry will reach US$81.741 billion in 2022, a year-on-year increase of 1.0%, and an increase of nearly US$200 million compared with 2018. The total output value of China's PCB industry can reach US$44.2 billion in 2022, accounting for 54.1% of the world's total.

PCB products made in the United States are mainly high-rise boards with more than 18 layers. European products serve local industrial instrumentation and control, medical, aerospace and automotive industries; Japan’s leading PCB technology main products are multi-layer boards, flexible boards, etc. boards and packaging substrates; Taiwan PCB mainly includes high-end HDI, IC carrier boards, similar carrier boards and other products. Overall, compared with countries such as Japan and South Korea, the proportion of high-end printed circuit boards in my country's PCB products is low. In 2021, multi-layer boards accounted for 47.6%, and single and double panels accounted for 15.5%.

Domestic production can be expected

Hudian Electric Co., Ltd., Shennan Circuit, Shengyi Electronics and other manufacturers provide products with a maximum number of layers up to 40 layers. Shennan Circuit backplane samples adopt materials mixing, partial mixing and other processes. The maximum number of layers can reach 120, and the number of layers in mass production can reach 68, taking the leading position in the industry.

Hudian Electric Co., Ltd. and Shennan Circuit currently have mass production capabilities for Eagle Stream server PCB products, which can adapt to the production needs of leading server manufacturer Intel. In the field of high-end servers, other manufacturers are also actively deploying. New technologies developed by Pengding Holdings include cloud high-performance computing and AI server motherboard technology. Related products for high-end servers from Chongda Technology and Shenghong Technology have been shipped and applied. .

Hudian Co., Ltd. has a balanced industrial layout and has been deeply involved in high-end operations for many years. New demands will drive subsequent growth. From 2018 to 2022, the company's operating income increased from 5.50 billion yuan to 8.34 billion yuan, with a four-year compound growth rate of 11.0% during the period. Among them, the company's operating income in 2022 will reach 8.34 billion yuan, a year-on-year increase of 12.4%. From the profit side, the company's net profit attributable to the parent company in 2022 will be 1.36 billion yuan, a year-on-year increase of 28.0%. In the first quarter of 2023, the company's revenue reached 1.87 billion yuan, a year-on-year decrease of 2.6%, and the net profit attributable to the parent company was 200 million yuan, a year-on-year decrease of 19.7%. Shanghai Electronics Co., Ltd. is the core PCB supplier of overseas Nvdia AI accelerator cards. Its customer resources are deeply tied to the major server white-label ODM factories in Taiwan, China, and it is expected to directly benefit from this round of AI wave.

Shenghong Technology is the leader in the chip industry and leads the graphics card PCB segment. The company actively reserves high-end products. EGS platform servers have achieved large-scale mass production and Birch Stream-level small-batch imports; the company's products for GPU, FPGA and other acceleration modules are shipped in batches; AI server-based acceleration modules multi-level HDI and high-multiple Layer products realize 4-level HDI and high multi-layer products. Shenghong Technology has actively reserved production capacity in the high-end HDI field, has good customer accumulation, and is expected to enjoy the growth wave brought by AI computing hardware.

Shennan Circuit focuses on the field of communication data and leads in high-multilayer board high-speed backplane technology. The main downstream of the company's traditional PCBs are communications and data center servers. In 2022, benefiting from the promotion of Whitley platform switching in the server market, the company's proportion of PCB products for Whitley platforms continues to increase. In 2023, the company's new generation of EGS platform PCBs are expected to begin to increase in volume.

Shennan Circuit has successively invested in the construction of Wuxi high-end flip-chip IC carrier board project and Guangzhou packaging substrate production base project to seize market share and improve the company's competitiveness in the packaging substrate industry. At present, Wuxi's high-end flip-chip IC substrate product manufacturing project has been completed. The first phase is basically at full production. The second phase will be put into production in September 2022 and is in the production capacity ramping stage. Overall capacity utilization is approximately 60%. Some of the factories in the first phase of the Guangzhou base have been capped, and some products are being sent for sample certification. Production is expected to begin in the fourth quarter of 2023.

In short, in the future, under the background of the incremental market of AI servers, domestic PCB is realizing both volume and price increases.

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