【PCB】 Emerging (3037) ABF has the opportunity to be in short supply in 2025

2024/05/10

LINE TODAY Financial Management

May 10, 2024

Author Excellent Analysis Industrial Research Department

Among Xinxing's 2024Q1 products, carrier boards accounted for the highest proportion of 63%, and PCB accounted for 36%. It can be known that the AI market that can affect ABF carrier boards will become the focus of Xinxing's future operations.

ABF part

1: The proportion of high-end products has increased from 40% to 50%-60%. The current oversupply in the ABF market is due to the large-scale expansion of many manufacturers, but there are fewer competitors in the high-end segment.

2: AI products will account for 10% of the company’s revenue in 2023, and it is estimated to be about 20% in 2024.

PCB board part

Benefiting from the transformation of mainstream AI Server architecture, PCB boards have the opportunity to grow by 20% this year, and it is expected that AI Server revenue will account for 13-15%/22-24% in 2024/25.

capital expenditure part

50% of this year's capital expenditure is mainly PCB products, which means that the product accounts for 63% of the carrier board, and the capital expenditure is also 50%. In terms of proportion, does the company believe that the future prospects of PCB will be relatively better than that of carrier board, so investment The ratios are equal and need to be continuously observed. Currently, the carrier board is mainly invested in the Guangfu factory. There is a chance of mass production in 2024 and revenue recognition in Q1 of 2025.

In terms of utilization rate

It can be found that the overall carrier board utilization rate is currently the lowest among the three major production lines, but it is more important to note that the carrier board accounts for the highest proportion of products among them, indicating that Xinxing's trump card in Q1 2024 is still sealed.

As for when the seal is expected to be lifted, we can continue to pay attention to whether the utilization rate of the carrier board begins to increase significantly, and the company said that the carrier board part will be slightly better in the second half of the year than in the first half.

The main reason is that the conversion period for high-end and low-end products and the recovery of factory production capacity will have to wait until 2025 to contribute revenue.

However, judging from the overall performance this year, the company said that revenue will be flat or slightly increased, but the increase will be limited, low single digits, and the overall market demand will not be as strong as expected.

In addition, we also need to continue to pay attention to whether the Japanese factory ibiden has started to take off significantly after benefiting from AI applications.

Looking at the ABF supply and demand forecast chart, it is expected that a golden cross will begin to appear in 2025, showing a state of oversupply turning into a shortage of demand. It will gradually expand to 9% in 2026, second only to the peak in 2021.

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