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 upgrading 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 AI server PCB market size 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, expected to grow by 142% and 222% year-on-year 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 PCB 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 grade materials and higher-layer boards) has created extremely high barriers to R&D 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 VGT, WUS, and Sytech 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 value (Dollar Content) of PCBs and CCLs. Second is the scale effect. The continuous expansion of AI servers is enlarging the total addressable market (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, as 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 PCB and CCL in various segments of AI data centers will be remarkable. The report data 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 From the perspective of growth rate comparison, the market growth rates of CCL in 2026 and 2027 (142%/222%) are even higher than the growth rate forecasts for optical modules (107%/48%) and AI training servers (57%/37%) during the same period. Investment View: Technological Barriers Safeguard, Competitive Landscape Better Than Expected In response to investors' common concerns about "market growth slowdown" and "intensified competition," Goldman Sachs presented a clear opposing viewpoint in the report. The Goldman Sachs analyst team led by Allen Chang believes that as the specifications of AI servers rapidly evolve, 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 PCB and CCL required for developing and producing the latest generation of AI servers 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 VGT, WUS, and Sytech in the report. Risk Warning and Disclaimer The market carries risks, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk.