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Zhitong Finance APP learned that Guojin Securities released a research report that the current reasons for the introduction of HDI in AI are two-fold. First, the increase in bandwidth places higher requirements on signal loss control, and HDI helps control loss. Second, the improvement in chip performance requires the PCB carrying the chip to have finer line widths and line spacing and smaller apertures. The team believes that the introduction of HDI in the field of high-speed communications has brought new technical challenges to the industry, will increase the added value of the entire industry, and add growth momentum to the industry. At the same time, changes in the downstream structure of HDI will bring opportunities for overtaking in the HDI supply chain.

High-speed communications have injected new impetus into HDI, with a CAGR of 7%, making it the second highest-growing segment.As AI is the most popular and most invested field, the design solutions it uses have always been a closely watched issue in the market. Guojin Securities has observed that the AI ​​field has begun to increase the application of HDI, a traditional technology in the PCB industry. The most typical example is that NVIDIA's GB200 product not only uses the HDI process in the computing power layer, but also introduces the HDI process in the connection layer that symbolizes high bandwidth and has previously used high-layer PCBs. Such changes are expected to inject new momentum into the industry.

HDI is beneficial to loss control, and the pattern of process difficulty upgrade may change.HDI is characterized by high density and the ability to reduce the PCB area. In the past, it was mainly used in consumer products, while high-speed communication equipment usually uses 6-16 layers of high-layer boards. The current reasons for the introduction of HDI in AI are two-fold. First, the increase in bandwidth puts higher requirements on signal loss control, and HDI helps to control losses. Second, the improvement in chip performance requires the PCB carrying the chip to have finer line widths and line spacing and smaller apertures. Guojin Securities believes that the introduction of HDI in the field of high-speed communications has brought new technical challenges to the industry (high-order HDI consumes more production capacity, has higher requirements for yield control, and high-speed communication HDI has larger board area and higher number of inner layers), which will increase the added value of the entire industry and add growth momentum to the industry. At the same time, changes in the downstream pattern of HDI will bring opportunities for overtaking in the curve for the HDI supply chain (the design factories leading high-speed communication HDI are different from those of consumer HDI, and with changes in the process, mainland manufacturers are more active in layout).

Short term: production capacity will not be too tight, and high prices are due to low yield and few effective competitors. 1) The strong customization attribute of PCB means that supply is prepared ahead of demand. PCB is a highly customized product. In order to win orders from large customers, PCB manufacturers will plan their production capacity in advance to prepare for production after winning the orders. Guojin Securities has observed that the current production capacity of manufacturers in the core supply chain of high-speed communications is relatively sufficient, and there is no possibility of shortage of production capacity in the short term; 2) PCB has over-expanded production in the past few years, and there are idle equipment on the market. In the past few years, the PCB industry has carried out large-scale expansion (PCB companies have accelerated financing and listing, and cash flow has increased fixed assets), and has reserved a large number of key HDI equipment (such as drilling machines. From the revenue of Daju CNC's drilling machines, it can be seen that the industry has carried out large-scale equipment reserves in 2020 and 2021). At present, there are still many key equipment idle in the industry, and the possibility of a comprehensive shortage is low. Guojin Securities believes that the opportunities brought by high-speed communication to HDI are more reflected in the higher processing difficulty brought by the new process design, which is reflected in the high price under the condition of low yield, rather than the price increase caused by the shortage of production capacity; and Guojin Securities believes that the customization attribute of the PCB industry is extremely high, and the design is controlled by the client, which will cause manufacturers outside the industrial chain to be unable to keep up with the changes in this generation of technology, that is, there are fewer effective competitors. Therefore, Guojin Securities believes that when changes occur in the HDI sub-sector, we should seize the growth opportunities of the core participants in the industrial chain, rather than focusing on marginal manufacturers.

Long term: HDI will become the mainstream solution to bring incremental growth to the industry and track marginal changes in the industrial chain structure.Although currently only a few end customers are relatively aggressive in adopting HDI solutions (such as NVIDIA), based on the performance superiority of HDI itself, Guotai Junan Securities believes that this type of product will become the mainstream solution in the industry after the product yield is improved. Considering the customized nature of PCB, the development of the industry does not mean that all PCB manufacturers can benefit. During this period, we should pay attention to the marginal changes of various manufacturers in customer expansion. PCB manufacturers that enter new customers and participate in new product research and development will benefit.

It is recommended to focus on the core suppliers of the core industrial chain.Guotai Junan Securities believes that under the current circumstances, the core suppliers of the key core industrial chain should be focused, and it is recommended to pay attention to manufacturers such as Shenghong Technology (300476.SZ), Shengyi Electronics (688183.SH), Shanghai Electric Co., Ltd. (002463.SZ), Shenzhen South Circuit (002916.SZ), and Shengyi Technology (600183.SH).

risk warning

AI development is not as good as expected; the promotion of HDI solutions is hindered; and competition intensifies.