Tohoku Securities: In the era of AI computing power, AI servers and the like are driving rapid growth of drilling equipment in the “sales shovel” process
The Zhitong Finance App learned that Northeast Securities released a research report saying that the global drilling equipment market is expected to increase from about 1,174 million US dollars in 2020 to about 1,470 million US dollars in 2024, with a compound annual growth rate of 5.8%. It is expected to reach about 2,683 million US dollars in 2029, and the compound annual growth rate for 2025-2029 is 11.5%. In the future, driven by the growth of infrastructure systems such as AI servers, the Asian (excluding mainland China and Japan) and mainland China markets are expected to grow at a higher than average rate, and the PCB industry will continue to grow. The two leading players in the market account for half, and price increases come from pricing power.
The main views of Northeast Securities are as follows:
PCB hole processing costs account for about 30-40% of PCB processing costs
In 2024, the value of drilling equipment in China accounts for about 20% of the total PCB industry chain equipment, with exposure, inspection, and electroplating being 14%, 12%, and 10% respectively; according to the Dazu CNC prospectus data, the global drilling equipment market is expected to increase from about 1,174 million US dollars in 2020 to about 1,470 million US dollars in 2024, with a compound annual growth rate of 5.8%. It is expected to reach about 2,683 million US dollars in 2029, and the compound annual growth rate for 2025-2029 is 11.5%.
Demand continues to grow: total volume continues to grow, structural changes
In 2024, the global PCB output value rebounded to US$73.565 billion, up 5.8% year on year. The global PCB output value is expected to reach US$85.152 billion in 2025, an increase of 15.8% year on year. In the future, driven by the growth of infrastructure systems such as AI servers, the Asian (excluding mainland China and Japan) and mainland China markets are expected to grow at a higher than average rate, and the PCB industry will continue to grow. Global PCB output will grow to US$123.348 billion in 2030, and the estimated compound annual growth rate of global PCB output will reach 7.7% from 2025 to 2030. From a structural point of view. In 2025, the output value of 18-layer high-layer boards, HDI, 8-16 layer boards, and IC carrier boards increased by 73%, 26%, 22%, and 18% year-on-year respectively. The CAGR for boards with 18 layers or above is expected to reach 22% in 2025-2030, making it the sector with the most potential for growth in multi-layer PCBs.
Market pattern: Double leaders account for half, price increases come from pricing power
According to the 2025 sales volume, Dingtai Hi-Tech ranked first in the world with 1.13 billion dollars, with a share of 29%. Jinzhou Precision (Chinatungsten Hi-Tech subsidiary) ranked second to fourth place with 21%, Japan's Yuneng 10%, and Taiwan Pioneer 10%. Global CR5 in 2025 was 75.7%. Laser drilling is still a foreign monopoly and is the largest alternative space. Leading ASP rose from 1.47 yuan/branch in the first quarter of 2026 to breaking 2 yuan in the third quarter.
Sorting out the industry: three categories of beneficiaries rather than the whole
1. A consumable head with flexible production capacity and structural upgrading capabilities. The core contradiction in the consumables sector is insufficient effective supply, and effective supply is constrained by the triple constraints of high-end bars, coating technology and grinding machine equipment. Related companies Dingtai Hi-Tech and Chinatungsten Hi-Tech;
2. Equipment platform to complete customer verification in high-value equipment categories. Elasticity lies in structure rather than number of units (2.5 times the value of CCD back drills, gross margin of ultra-fast lasers exceeds 50%). Related companies are Dazu CNC and Dazu Laser;
3. A downstream leader with advanced processing capabilities that can handle high multi-layer and high level HDI orders. Related companies include Shenghong Technology, Shanghai Electric Power Co., Ltd., Shennan Circuit, etc.
Risk warning: risk of downstream AI demand falling short of expectations; risk of production expansion exceeding expectations and falling prices; risk of fluctuating raw material prices; risk of technology iteration and substitution; risk of product verification and customer introduction falling short of expectations; risk of trade friction and export control risks; risk of measurement and forecast deviations.