PCB industry sees twin waves of earnings and capacity expansion as AI computing ignites high‑end track

The Chinese printed circuit board (PCB) sector is undergoing a sharp bifurcation: headline firms are posting explosive profits while smaller players are squeezed in a low‑end capacity glut. PCBs — often called the "mother of electronics" because they underpin consumer devices, telecoms, electric vehicles and AI servers — have moved from being a volume business to a high‑precision, high‑value one driven by AI compute and the electrification of transport. Who wins this next cycle? The firms that can supply high‑layer, high‑frequency and advanced packaging substrates.

Earnings divergence: winners pull away

Leading suppliers such as Shenghong Technology (胜宏科技), Shennan Circuit (深南电路) and Hudian (沪电股份) delivered standout results in 2025, with reported net‑profit gains measured in the tens of percent and, in one case, a near tripling. Shenghong (胜宏科技) reported net profit of RMB 43.12亿元 (≈RMB 4.312bn) — a 273% year‑on‑year surge; Shennan (深南电路) rose about 74% to RMB 32.76亿元 (≈RMB 3.276bn); Hudian (沪电股份) recorded around RMB 38.22亿元 (≈RMB 3.822bn). By contrast, many mid‑ and small‑cap makers such as Tianjin Prin (天津普林) and Bomin Electronics (博敏电子) remain mired in low‑margin commodity boards and are reporting shrinking profits or losses. The reason is straightforward: AI server and automotive PCBs command gross margins north of 30%, while ordinary consumer PCBs linger near 15%.

A billion‑dollar capex wave to lock in high‑end share

It has been reported that the industry has announced a wave of high‑end capacity investment exceeding RMB 400亿元 (≈RMB 40bn) as firms race to capture AI server, high‑speed and automotive PCB demand. Headline plans include Shenghong’s (胜宏科技) up‑to RMB 200亿元 (≈RMB 20bn) investment program targeting new fabs and automation; Hudian (沪电股份) has disclosed multi‑round investments (an initial RMB 55亿元 plus a subsequent RMB 33亿元) to scale high‑layer, high‑frequency lines; and Pengding Holdings (鹏鼎控股) has repeatedly expanded its commitments, with cumulative disclosures reaching RMB 233亿元 (≈RMB 23.3bn). Capital markets actions — M&A, strategic equity investments and large rights issues — are consolidating supply chains, securing upstream copper‑clad laminate sources and locking in downstream customers.

AI compute demand and geopolitical pressure are the accelerants. Reportedly, domestic PCB players increased their share of the global high‑end market to over 35% in 2025, up materially from 2023, as mainland firms break into spaces long dominated by Japan, Korea and Taiwan. Does trade policy and export control risk alter this calculus? Yes. Western export controls on advanced chips and the broader push for supply‑chain security have intensified Beijing’s “国产替代” (domestic substitution) drive, making local high‑end capacity not just commercially attractive but strategically imperative.

The near‑term outlook points to higher concentration: technology, customer credentials and scale will determine winners as hundreds of billions of RMB of high‑end lines come online over the next two years. For investors and downstream buyers, the question is not whether the PCB market will grow, but which integrated, well‑capitalised players will survive the reshuffle and define standards in an AI‑powered era of electronics manufacturing.