PCB supply chain operations look promising
United News Network
March 4, 2025
Author: Economic Daily News Reporter: Yin Huizhong/Taipei Report
March 4, 2025
Author: Economic Daily News Reporter: Yin Huizhong/Taipei Report
The Taiwan Printed Circuit Association (TPCA) released data yesterday (3rd) showing that as terminal consumption picks up, the demand for artificial intelligence (AI) and satellite communications will continue to ferment in 2025. It is estimated that Taiwan's printed circuit board (PCB) industry will further grow to NT$854.1 billion, a year-on-year increase of 4.6%, and is expected to challenge a new high. Analysts expect that PCB leader Zhen Ding-KY (4958), substrate leader Xinxing, HDI leader Huatong, Yaohua and Kingstar will benefit the most from the industry trend.
Zhen Ding, Xinxing and others have previously been optimistic about the industry trend driven by AI. Zhen Ding Chairman Shen Qingfang recently mentioned that the groundbreaking ceremony of the Taiwan headquarters "Zhen Ding Times Building" has been held. The headquarters will serve as an AI research and development base. This year's operating capacity will strive to set a new record, and the proportion of the group's AI products in applications will be further increased towards 70%.
Zeng Zizhang, chairman of Xinxing Electronics, also said in an interview recently that the substrate market is expected to improve three or four months earlier than the overall market in 2025, and AI applications have performed outstandingly in the market. It is expected that there will be better performance in 2025, and Xinxing's AI share will gradually increase.
Huatong has the fastest layout of low-orbit satellites. It is understood that Huatong has obtained orders from four major low-orbit satellite (LEO) operators. The first phase of its Thailand factory mainly produces LEO boards. In the future, it will improve the product structure according to customer needs, and plans to add high-end HDI system board production lines such as AI servers and network communications. The Thailand factory will play an important role in the company's future growth.
The Taiwan Printed Circuit Association analyzed that global cloud service providers continue to increase capital expenditures, and countries are also actively building "sovereign AI". It is expected that the demand for AI servers will continue to expand.
The agency analyzed that the knowledge distillation technology brought by DeepSeek can transfer large models from the cloud to the edge and deploy smaller models on devices with limited resources, which is expected to promote the accelerated popularization of AI Edge applications. Under the overall AI effect, it will further boost the market demand for HDI boards and high-layer boards. In addition, the low-orbit satellite market is developing rapidly due to the continuous decline in rocket launch costs, and it is estimated that the demand for related satellite PCBs will also be promising.
The agency analyzed that US policy variables are the biggest uncertainty in 2025. Tariff adjustments may affect global inflation trends, and changes in electric vehicle policies, such as relaxing environmental regulations or canceling electric vehicle subsidies, may increase uncertainty in the electric vehicle market. At the same time, deflation risks in mainland China may weaken the momentum of recovery in the consumer market.
In terms of overseas competition, Taiwanese and mainland-funded manufacturers will gradually open new production capacity in Thailand starting from 2025. Although the initial scale is limited, in the long run, the expansion of production capacity is bound to impact market price competition. In terms of cost control, the rise in international gold prices and the expected increase in electricity prices may also push up manufacturers' costs, becoming a focus that the industry needs to pay urgent attention to.
Related link: https://udn.com/news/story/7253/8583341
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