A strong demand from artificial intelligence is driving both price and volume increases for PCBs, with many AI-PCB companies currently experiencing robust orders, full production capacity, and active expansion, suggesting sustained high earnings growth. AI copper-clad laminates (CCL) are also in high demand, and as overseas CCL manufacturers are slow to expand capacity, shortages and price increases persist, which could benefit leading mainland CCL producers. Overall, the outlook remains positive for AI CCL/PCB, core computing hardware, semiconductor equipment, and the Apple supply chain.
Why Sequential Growth in the Second Half Is Expected to Accelerate
The outlook for AI PCB development remains optimistic, with the slowdown in restocking during the first half not altering the fundamentally strong industry cycle. Although the peak period for GPU/TPU-related board restocking occurs in the second half, the first half saw robust restocking of broader AI-related hardware, including switches, server CPU motherboards, and optical module PCBs. As new product restocking is underway in the second half, the exponential increase in value will further boost earnings momentum. Against this backdrop of rising AI-related prosperity, it is observed that restocking for GPU/TPU has already begun, with core manufacturers operating at high utilization rates. Furthermore, the value of GPU/TPU/ASIC-related products in the second half is expected to grow significantly year-over-year. For instance, the value per GPU for the Rubin series is projected to increase by over 100% compared to the GB series, while the value per unit for the TPU V8 series is expected to surge by over 400% compared to its predecessor. This will further amplify the value-added effect of the PCB sector. AMD's Helios rack-level performance has improved significantly, with strong customer momentum. Companies such as OAI, Meta, Anthropic, and Microsoft are expected to deploy AMD's products. Helios is already in production, with initial shipments anticipated to begin at the end of the third quarter and significant volume growth in the fourth quarter. AMD has guided for a year-over-year revenue increase of over 100% for its overall data center business in 2027, with AI revenue growth in the Data Center segment expected to far exceed that figure. Demand for 800G/1.6T optical module mSAP is exploding, entering a peak restocking period in the second half. The industry supply chain is severely strained, and several optical module manufacturers have recently been actively securing capacity from upstream mSAP producers. Companies like PCB Bancorp, along with others, have announced significant expansion of mSAP capacity for optical modules. Additionally, demand for high-layer count PCBs for 1.6T switches is expected to emerge in the second half. The outlook for the PCB sector's accelerating growth trajectory in the second half remains positive. In the recent earnings season, three of the four major North American CSPs revised their capital expenditure guidance upward. Google raised its 2026 CAPEX guidance from $180-190 billion to $195-205 billion. On July 30, Meta Platforms reported its second-quarter financial results and adjusted its full-year capital expenditure forecast. Meta raised its 2026 fiscal year capital expenditure range from $125-145 billion to $130-145 billion. Microsoft stated that, excluding accounting effects, its actual investment expectations remain unchanged (at $190 billion for 2026). Capital expenditure in the next quarter is expected to exceed $50 billion, up from $41 billion in the current quarter. Capital expenditure guidance for the full fiscal year 2027 is still expected to see year-over-year growth. As North American CSP giants experience rapid AI business growth and continue to increase capital expenditure, expressing optimism about future AI demand, the outlook for AI hardware beneficiary supply chains remains positive. The core AI computing hardware companies are expected to see accelerated sequential earnings growth in the second half. The explosive growth in token volume is driving strong demand for ASICs. It is projected that the volume of ASICs from Google, Amazon, Meta, Open AI, and Microsoft will experience explosive growth in 2026-2027. Overall, the outlook remains positive for AI CCL/PCB, core computing hardware, semiconductor equipment, and the Apple supply chain.
Investment Recommendations
TSMC's outlook for high AI prosperity is expected to extend into 2029/2030. Google, Amazon, and Meta have all revised their 2026 capital expenditure guidance upward, expressing optimism about future AI demand. There are shortages and price increases for various materials in the AI supply chain. Nvidia's next-generation Vera Rubin platform is expected to see even stronger demand. Advanced process wafer foundry and advanced packaging are accelerating expansion and raising prices. AI demand is very strong in both the short and medium term. With restocking from TSMC for Rubin and from ASIC manufacturers like Google and Amazon, sequential growth in the second and third quarters is expected to accelerate. The outlook for core AI hardware companies remains positive. The volume of ASICs from Google, Amazon, Meta, Open AI, and Microsoft is projected to experience explosive growth in 2026-2027. Strong AI demand is driving both price and volume increases for PCBs. Many AI-PCB companies currently have robust orders, full production capacity, and are actively expanding, suggesting sustained high earnings growth. AI CCL is also in high demand. As overseas CCL manufacturers are slow to expand capacity, shortages and price increases persist, which could benefit leading mainland CCL producers. Segmented industry indicators: Consumer Electronics (stable to upward), PCB (accelerating upward), Semiconductor Chips (stable to upward), Semiconductor Foundry/Equipment/Materials/Components (stable to upward), Displays (bottoming out), Passive Components (accelerating upward), and Packaging and Testing (stable to upward).
Risk Factors
Risks include the potential for demand recovery falling short of expectations, slower-than-anticipated progress in AIGC, and the risk of further escalation of external sanctions.
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