2025-2031 China Printed Circuit Board (PCB) Industry Development Report: AI and Automotive Electronics Two-wheel Drive Industry Upgrading

1. Industry status: The global capacity anchor position is stable, and high-end products have become the core of growth

1. Overall market size: China's PCB industry has occupied a global dominant position, with a market size of 412.11 billion yuan in 2024, a year-on-year increase of 13.4%, accounting for 72.3% of the global market share. Benefiting from high-end demand such as AI servers and automotive electronics, the market size is expected to exceed 433.3 billion yuan in 2025, maintain a compound growth rate of 5.2%-6.5% from 2025 to 2031, and the market size is expected to reach 620 billion yuan in 2031. From the perspective of production capacity, the domestic PCB production capacity is expected to reach 2.35 billion square meters in 2025, with an output of 2.18 billion square meters, a capacity utilization rate of 92.8%, and the global proportion of 45.6%, and the proportion of high-end production capacity continues to expand.

2. Subdivision category pattern: The product structure shows a trend of "high-end expansion and low-end contraction", with multilayer boards, HDI boards, and packaging substrates becoming the core growth engines. Among them, high multilayer boards with more than 18 layers will have a compound growth rate of 15.7% from 2024 to 2029 due to adapting to the needs of AI servers, the highest in the industry; HDI boards benefit from the upgrade of automotive electronics and AI terminals, with a compound growth rate of 6.4%, and the domestic market size will exceed 43 billion yuan in 2025; Packaging substrates have broken overseas monopolies to achieve mass production breakthroughs, and the yield rate of FC-BGA substrates has increased to 85%, becoming a core increment in high-end fields. Flexible circuit board (FPC) focuses on AI mobile phones and AR/VR devices, and leading companies such as Pengding Holdings lead the global market share. The market share of low-end products such as single/double sides continued to shrink and gradually shifted to cost-advantaged areas.

3. Localization and regional layout: China has achieved independent and controllable PCB industry chain, forming a technological overtake in high-end fields, and the production capacity of high-end categories such as multi-layer boards, HDI, and packaging substrates with more than 8 layers accounts for more than 95% of the world. The regional layout is highly concentrated, with Guangdong Province, Fujian Province and Jiangsu Province as the core industrial belts, gathering more than 80% of the country's production capacity and leading enterprises to form a collaborative ecology of "material-manufacturing-terminal". At the same time, local enterprises have accelerated their global layout, built production bases in Thailand, Mexico and other places to hedge trade risks and serve the supply chain of overseas major customers.

2. Core driving factors: demand explosion, technological breakthroughs and industrial agglomeration resonance

1. Downstream high-end demand has exploded: AI computing power has become the first growth driver, the value of a single AI inference server PCB reaches 1,200-1,500 US dollars, which is 5 times that of ordinary servers, and the popularization of liquid-cooled servers has given rise to new demand for ultra-thin HDI and thermal management PCBs, and global AI inference server shipments will increase by 50% year-on-year in 2025, driving the demand for high multilayer boards and high-frequency and high-speed boards to surge; In the field of automotive electronics, the penetration rate of new energy vehicles exceeds 50%, the penetration rate of L3 autonomous driving exceeds 25%, the consumption of bicycle PCB has increased from 6-8 square meters of traditional fuel vehicles to 18-25 square meters, and the value has jumped from 1,000 yuan to more than 5,000 yuan. In the field of consumer electronics, AI mobile phones and AR/VR devices have increased FPC usage by 30%, bringing incremental space to flexible circuit boards.

2. Technology iteration and material upgrading empowerment: high-end PCB has evolved in the direction of high density, high frequency and high speed, and the high-frequency material of "glass fiber + ceramic filling" jointly developed by Shanghai Electric Power Co., Ltd. and Shengyi Technology has reduced the dielectric loss to 0.002 to meet the transmission demand of 112Gbps; breakthrough in packaging substrate technology, Shennan Circuit and Xingsen Technology have achieved mass production of FC-BGA substrates, breaking the monopoly of Japanese and Taiwanese enterprises; Automotive-grade PCBs are AEC-Q100Grade0 qualified, with a temperature resistance of 150°C, suitable for extreme automotive working environments. AI empowers production process optimization, promoting high-end PCB yield to increase to more than 95%, and costs continue to decline.

3. Industrial agglomeration and policy support reinforcement advantages: China's PCB industry has formed a complete ecology of "upstream material independence + midstream manufacturing leadership + downstream terminal agglomeration", and the self-sufficiency rate of Shengyi Technology high-frequency and high-speed copper clad laminate exceeds 80%, breaking the monopoly of Rogers and Panasonic; The replacement rate of domestic PCBs in Huawei, ZTE and other terminal enterprises exceeds 90%, forcing the global supply chain to gather in China. At the policy level, the state has included high-end PCBs and materials in the support system of the electronic information industry, and local governments have helped enterprises to tackle key problems through special funds and production capacity support.

3. Technical barriers and industrial challenges: high-end breakthroughs and cost control are dual tests

1. Core technical barriers: High-end PCB technical barriers are concentrated in three aspects: first, the manufacturing process, high multilayer board (more than 18 layers) wiring density and aperture control requirements are strict, and the lamination accuracy and signal integrity need to be accurately controlled; second, material adaptation, high-frequency and high-speed plates have extremely high requirements for copper clad laminate dielectric loss and thermal stability, and the core formula has been monopolized by overseas enterprises for a long time; The third is automotive specification and high-end certification, automotive PCB needs to pass strict reliability testing and long-term verification, and the packaging substrate needs to meet the precision adaptation standards of chip manufacturers, with a high entry threshold.

2. Core challenges in the industry: the pressure of raw material price fluctuations is significant, with core raw materials such as copper and copper clad laminate accounting for more than 60% of the cost, and the high price fluctuation of copper prices and the price increase of copper clad laminate in 2025 will increase the difficulty of cost control for enterprises; International trade frictions continue, and the United States imposes technical barrier tariffs on high-end PCBs in China. The homogeneous competition in the low-end market is fierce, and some small and medium-sized enterprises are facing overcapacity and profit compression pressure. There is a large gap in high-end R&D talents, and professionals in core links such as high-frequency material research and development and precision manufacturing are scarce.

3. Response strategies and breakthrough progress: leading enterprises digest the cost pressure of raw materials through refined management and long-term order price locking, and at the same time extend the layout upstream to ensure the stability of material supply; Accelerate the expansion of overseas production capacity, Shanghai Electric Power Co., Ltd.'s Thailand factory and Shenghong Technology's Mexico factory were put into operation, focusing on North American automotive electronics and computing power customer orders; Increase R&D investment, focus on high-end tracks such as packaging substrates and high-frequency and high-speed boards, and increase the proportion of Shennan circuit packaging substrate revenue to 25%, with a yield rate of industry-leading level. The industrial chain is deepened, and enterprises have established joint R&D mechanisms with terminal manufacturers and material suppliers to adapt to the needs of technology iteration in advance.

Fourth, the competition pattern: the leader dominates the high-end, and the industrial concentration continues to increase

1. Local leaders occupy global advantages: Chinese companies dominate the global PCB market, with 15 Chinese companies accounting for 15 of the top 100 global PCBs in 2023, Dongshan Precision (third in the world) and Shennan Circuit (eighth in the world) ranking in the top ten, and Pengding Holdings (merged into Zhending Statistics) ranking first in the world with sales of US$4.918 billion. Leading enterprises focus on the high-end track, Shanghai Electric Power Co., Ltd.'s AI server PCB revenue accounts for more than 30%, and Shenghong Technology's automotive electronics revenue accounts for more than 40%, forming a differentiated competitive advantage, and the overseas order visibility of leading enterprises will reach 8-10 months in 2025, and the leading position will continue to be consolidated.

2. Clear subdivision of track echelons: in the field of high multilayer boards and high-frequency and high-speed boards, Shanghai Electric Power Co., Ltd. and Shennan Circuit are the core leaders, bound to major computing power customers such as NVIDIA and Huawei; In the field of HDI and automotive electronic PCBs, Shenghong Technology and Jingwang Electronics are leading and have become the core suppliers of Tesla and Bosch; In the field of FPC, Pengding Holdings has a global market share of more than 20%, leading the supply chain of AI mobile phones and AR/VR equipment; In the field of packaging substrates, Shennan Circuit and Xingsen Technology have achieved breakthroughs in mass production, gradually replacing Japanese and Taiwanese companies such as Yifei Electric and Xinxing Electronics. Small and medium-sized enterprises focus on low-end market segments and rely on cost advantages to undertake stock orders.

5. Development trends and investment suggestions

1. Core development trends: First, high-end continues to deepen, the proportion of packaging substrates, high-frequency and high-speed boards, and automotive-grade PCBs continues to increase, and the proportion of high-end product revenue is expected to exceed 60% in 2031; second, the integration of materials and manufacturing, enterprises extend to upstream copper clad laminates and special materials, and build synergistic advantages of the whole industry chain; third, the global layout is optimized, with domestic core bases focusing on high-end production capacity, and overseas bases serving regional markets to hedge trade risks; Fourth, the green transformation is accelerating, and environmentally friendly PCB materials and low-energy consumption processes have become the mainstream of the industry, responding to the requirements of the dual carbon policy.

2. Investment direction suggestions: focus on AI server PCB leaders, bind core computing power customers such as NVIDIA and Huawei, and benefit from the explosion of demand for high-multilayer boards and high-frequency and high-speed boards; Lay out the leading in the localization of packaging substrates and seize the opportunity of FC-BGA substrate substitution; pay attention to automotive-grade PCB companies and share the dividends of intelligent upgrades of new energy vehicles; Optimistic about high-frequency and high-speed copper clad laminate enterprises, binding PCB leaders, and enjoying material upgrade premiums; Track the leading enterprises in the global production capacity layout and hedge the risk of international trade frictions.

Summary: 2025-2031 is a critical period for the transformation of China's PCB industry from "scale leadership" to "technology leadership", AI computing power and automotive electronics form a two-wheel drive, and high-end products become the core growth engine. China's PCB industry occupies a dominant position in global competition with its world-leading production capacity advantages, complete industrial chain ecology and continuous technological breakthroughs. Despite challenges such as raw material price fluctuations and trade frictions, leading enterprises are expected to continue to increase their market share and profitability and share the structural growth dividends of the industry through high-end, globalization and integrated layout.

Disclaimer: This report is based on public information and is for reference only and does not constitute any investment advice. There is uncertainty in the development of the industry, and investors need to judge carefully.