The PCB industry has developed so far, and its application fields cover communications, data centers and servers, consumer electronics, automotive electronics, energy and power, industrial control, medical care, aerospace and defense, and many other fields. The development of the PCB industry is closely related to the development of downstream industries.
In the past two years, different application fields have shown a trend of differentiation. PCB demand for electronic consumer products is generally weak, but the new energy (automobile) industry, which focuses on electrification, intelligence, and networking, still maintains a relatively high growth rate. New technology infrastructure represented by artificial intelligence, cloud computing, blockchain, etc., computing power infrastructure represented by data centers and intelligent computing centers (AI), communication technologies represented by 5G, Internet of Things, and industrial Internet Network infrastructure also has certain growth resilience. For PCB companies, structural opportunities still exist.
(1)Data center and server
As a carrier of computing power, servers provide a broad source of power for the digital economy era . With the continuous development of downstream applications such as artificial intelligence, neural network, cloud computing, and edge computing, the computing power requirements for servers are also getting higher and higher. PCBs used in high-end servers are generally required to have the characteristics of high-layer count, high density, high transmission speed, and high aspect ratio, which will drive the value of server PCBs to increase.
Against the background of the rapid growth of global data traffic and the vigorous development of cloud services, servers, as the most important computing power infrastructure in the cloud network system, are rapidly expanding in market size. As a key material for carrying servers, the market size of server PCBs has also expanded significantly with the substantial growth in server shipments. According to Prismark estimates, the compound growth rate of servers and data centers is expected to reach 9.4% in 2022-2026.
In the field of AI servers, AI models require more and more computing power to manage an increasing amount of data, and the rapid growth of data has opened up the blue ocean market for AI servers. The most important support to solve the computing power is the AI server. The AI server adopts the heterogeneous form of CPU+accelerator card. Generally, the AI server will be equipped with multiple accelerator cards to increase computing power. In terms of heterogeneity, different combinations can be adopted according to the scope of the application. The current mainstream method is the CPU+GPU mode.
In 2022, the emergence of ChatGPT-related phenomenon-level applications in the AIGC field promoted the continuous growth of AI computing power. OpenAI released the GPT-4 multimodal large model in March 2023, which has greatly improved the overall complexity and interactivity. As major technology giants enter the AIGC successively, the market demand for AI servers will continue to rise. According to TrendForce data, the compound growth rate of AI servers in 2022-2026 is expected to reach 10.8%.
For the PCB industry, the iterative upgrade and replacement of servers will also become the key to driving growth. With the successive introduction of new platforms from Intel and AMD, the currently commonly used PCle 4.0 interface has been upgraded to PCle 5.0. In order to meet the high-speed and high-frequency requirements and reduce the dielectric loss of signals during transmission, the requirements for server PCB layers, materials, and design processes are getting higher and higher, which will promote product upgrades, further increase the value of server PCBs, and bring new development space to server platform PCB.
In the future, with the gradual implementation of AI application scenarios and the upgrading of server platforms, the server field will continue to grow rapidly.
Automobile shipments are a key factor in the demand for traditional automotive PCBs. Compared with traditional vehicles, the control system (VCU), motor control system (MCU), battery management system (BMS) of new energy vehicles are all contributors to the incremental PCB demand of new energy vehicles. Under normal circumstances, the PCB content of a single new energy vehicle is 3-6 times that of a traditional vehicle. Under the trend of electrification, the proportion of automotive electronics has increased significantly, contributing to a large incremental demand for PCBs.
The sales of new energy vehicles all over the world show a trend of rapid growth, and the rapid development of the new energy vehicle industry provides a huge room for growth in the PCB market. According to TrendForce data, in 2022, the global sales of new energy vehicles (including pure electric vehicles, plug-in hybrid electric vehicles, and hydrogen fuel cell vehicles) were approximately 10.65 million, a year-on-year increase of 63.6%.
China’s new energy vehicle sales also continued high growth. According to data from the China Association of Automobile Manufacturers, sales of new energy vehicles increased by 93.4% year-on-year in 2022, with a market share of 25.6%, 12.1% higher than the previous year. In the future, with the continuous increase in the market share of new energy vehicles, the increase in the industrial chain driven by electrification may gradually slow down.
The service ecological network with smart cockpit and automatic driving as the core will promote the intelligent upgrade of new energy vehicles, which is expected to further expand the market size and become a new driving force for the continued electrification to promote the growth of automotive PCB demand.
According to Prismark’s forecast, the global automotive electronics PCB output value was approximately US$9.35 billion in 2022, and will reach US$12.772 billion in 2026, with a compound growth rate of 8% from 2022 to 2026.
As the core content of the leading new generation of information technology and new infrastructure, 5G is developing rapidly. In the past two years, thanks to the rapid growth of companies in China’s 5G industry chain, China has taken a leading position in the world in terms of 5G infrastructure construction and user penetration. According to the data from the Ministry of Industry and Information Technology, by the end of 2022, the total number of 5G base stations in the country reached 2.312 million, a net increase of 887,000 compared with the previous year, and the increase far exceeds the level of the whole year of 2021.
As one of the important materials for base station construction, PCB will directly benefit from the increase in the number of base stations and the usable area of a single base station. The Minister of Industry and Information Technology stated that 600,000 new 5G base stations will be opened in 2023, and the total number will exceed 2.9 million. It is expected that China’s 5G base station construction will slow down, while many overseas operators have already begun planning and initial deployment, and related 5G construction investment will usher in an acceleration.
The large-scale application of 5G industry will be the key to the development of 5G technology, and will play an enabling effect in multiple industries such as industry, medical care, education, and transportation. According to data from the China Academy of Information and Communications Technology, 5G applications have covered 40 of the 97 major categories of the national economy, with a total of more than 50,000 application cases.
The next 3-5 years will be a critical period for the scale-up of 5G applications in China. China’s ultra-large-scale market advantage will drive the rapid development of the 5G industry.
In January 2023, the Minister of Industry and Information Technology stated at the National Industry and Information Work Conference that in 2023, policies and measures to promote the coordinated development of new information infrastructure construction will be introduced, the construction of 5G and Gigabit optical networks will be accelerated, the construction of “broadband frontiers” will be launched, and 6G technology research and development will be promoted. The development and application of 6G technology will promote the technological upgrading of PCB and bring new development opportunities to PCB companies.