Goldman Sachs: AI is igniting the big cycle of PCBs

Goldman Sachs pointed out that the construction of artificial intelligence infrastructure is driving the PCB (Printed Circuit Board) and CCL (Copper Clad Laminate) industries into a super cycle. The bank believes that with the continuous upgrade of AI server specifications, the industry is experiencing a dual drive of "higher speed" and "larger scale," which will significantly enhance the value and market space of related components. According to the Chasing Wind Trading Desk, Goldman Sachs predicted in a report released on January 20 that the global market size for AI server PCBs will grow by 113% year-on-year by 2026, and continue to grow by 117% in 2027; while the growth rate of the AI server CCL market, as a core upstream material, is even more astonishing, with expected year-on-year growth of 142% and 222% in 2026 and 2027, respectively. This explosive growth is attributed to the increase in computing power density, the surge in demand for high-speed connections (such as 800G/1.6T), and the trend of PCBs gradually replacing copper cable connections within AI servers. Goldman Sachs rebutted market concerns that "AI infrastructure has passed the initial stage and competition will intensify." The bank believes that rapid technological iteration (such as the transition to M9 level materials and higher layer boards) has created extremely high barriers to research and development and capital expenditure, allowing leading companies to maintain a relatively healthy competitive environment and continuously secure order shares from major customers. Goldman Sachs initiated coverage and gave "buy" ratings to Shenghong Technology, Huadian Co., Ltd., and Shengyi Technology in the report. Dual Drive: Speed Upgrade and Scale Expansion The core logic of Goldman Sachs' report is based on two major trends. First is the value enhancement brought by speed upgrades. With the upgrade of AI server specifications, the computing power density per cabinet has significantly increased, driving demand for high-speed connection technologies such as 800G and 1.6T. This directly leads to a significant increase in the dollar content of PCBs and CCLs. Second is the scale effect. The continuous expansion of AI servers is enlarging the overall potential market size (TAM), with suppliers' capacity expansion following closely. Goldman Sachs specifically pointed out that the application of PCBs in AI servers is increasing; for example, in rack-level servers, PCB backplanes and midplanes are replacing traditional copper cable connections because PCB solutions are easier to assemble, bringing additional incremental space to the industry. Market Forecast: CCL Growth Leads the Industry Chain According to Goldman Sachs' calculation model, the growth rates of PCBs and CCLs in various segments of AI data centers will be extremely impressive. The report shows that the global AI server PCB market size is expected to grow from approximately $3.1 billion in 2024 to $27.1 billion in 2027. In contrast, the upstream material CCL has greater elasticity. Goldman Sachs expects the global AI server CCL market to surge from $1.5 billion in 2024 to $18.7 billion in 2027. In terms of growth rate comparison, the market growth rates for CCL in 2026 and 2027 (142%/222%) even exceed the growth rate forecasts for optical modules (107%/48%) and AI training servers (57%/37%) during the same period Investment Viewpoint: Technical Barriers Provide Protection, Competitive Landscape Better Than Expected In response to investors' common concerns about "slowing market growth" and "intensifying competition," Goldman Sachs presented a distinct opposing viewpoint in its report. The team of analysts led by Allen Chang believes that with the rapid migration of AI server specifications, customers are more inclined to rely on technology leaders to ensure product quality and timely delivery of the latest architectures. The report points out that the development and production of the latest generation of AI servers require PCBs and CCLs that not only demand extremely high R&D investment but also face significant capital expenditure burdens, which will effectively limit the number of new entrants. Therefore, in the context of rapid technological iteration, the market competition environment will be milder than investors expect, and leading companies will continue to benefit. Goldman Sachs has initiated coverage and given "Buy" ratings to Winbond Technology, Huada Empyrean, and Shengyi Technology