瑞银-中国PCB与CCL行业：动荡中坚定前行-China PCB and CCL Sector Remain steadfast through turbulence-20260810

ab

GlobalResearch

10August2026

ChinaPCBandCCLSector

Remainsteadfastthroughturbulence

Timetoturnmorepositiveaftersharpcorrectiongivensolidearningsgrowth

WeremainedpatientamidtheChinaPCB/CCLsector'ssix-month100-200%rallyearlierthisyear.Now,afterthesectorhasfallen25-30%sinceJuly,weturnmorepositiveaswebelievetherecentcorrectionlooksoverdonedueto:1)profit-taking;2)AIcapexconcerns;3)deleverage-drivenselling,whileourcoverageuniverse'sfundamentalsremainintact.UBStechteamforecastsNvidia'sGPUshipmentstorise+17%/+36%whiletop5hyperscalercapexat+84%/+45%YoYin2026/27E.Weseenewgrowthdriversfromopticalmodules,Kyberorthogonalbackplane,ASICsandhigher-specCCL/materialsemerging,offeringpotentialvolumeandcontentvaluegainsandafavourablecompetitivelandscapeforselectcompanieswecover.Tradingatanattractive25xNTMUBSePE,weforecasta46%EPSCAGRin2026-28forourcoverageversusWindconsensusof35%.

CCL:FR4fuelsnear-termearnings;AImixpavesalongerrunway

WebelievethedurabilityofthecurrentconventionalCCLupcycleisunderestimateddespiteFR4CCLpricesexceedingthepreviouscyclepeak,assupplyremainstightduetoAI-drivencapacityabsorption.WeconservativelyforecastFR4CCLpricesofRmb365/sheetby1H27,supportedbylingeringshortagesinCCLandupstreammaterials(E-glass).Kingboard(KBL)andShengyiTech(SYT)arelikelytobekeybeneficiariesgiventheirscale,qualityandbargainingpower,whileAIexposurefuelfurthergrowth.WeseeSYTaswellpositionedtobenefitfromAICCLupgradesandKBLaslikelytoliftitsAIexposureviaupstreammaterialsbeforepenetrationintohigh-speed/AICCL.CCLindustryconsolidationislikelytocontinueassupplyconstraintsincreasinglyfavourthelargestaswellasverticallyintegratedfirms.

PCB:Optical,ASIC&backplanetosupportgrowthbeyondRubinspecupgrades

BesidesRubin'sspecupgrades,webelieve800G/1.6TopticalmodulePCBsandASICunitscanfuelnear-termearningsgrowth.WeprefersupplierssuchasShennanandAvaryfortheirhigh-endmanufacturingcapabilities(mSAP,HDI,HLC)andestablishedrelationshipswithkeycustomers.WebelievethemarkethasnotfullyrealisedShennan'sopticalmodulePCBrevenuepotential,whichcouldreach25%oftotalrevenuein2027E,liftingPCB's2026/27EYoYgrowthto38%/48%.WeseeShennan'scurrentvaluationasthemostattractivegivenitsexposuretoopticalmodulePCBs,withupsidefromtheoptionalityofKyberbackplaneadoptionnotyetpricedin(similarlyforSYTthroughpotentialbackplaneCCLallocation).WeexpecttheKyberorthogonalbackplanetostilllaunchwithFeynmanin2028andcouldliftSYT/Shennan's2026-29EearningsCAGRto44%/47%fromourcurrentestimatesof38%/39%.

SYT/Shennanmostpreferred;initiateonKBLatBuy;upgradeAvarytoBuy

Sector-wise,wecontinuetofavourCCL/upstreamcompaniesandselectPCBnames.WekeepSYTandShennanasourtoppicks,followedbyKBLandAvary(allratedBuy).WeraiseSYT/Shennan/Avary'sPTsby98%/66%/136%toRmb192.00/Rmb473.00/Rmb130.00,reflectingstrongerAIordervisibility,share-gainopportunitiesandcontinuedmarginexpansion.WeinitiatecoverageonKBLwithaHK$58.00PTbasedon17x2027EPE.WeupgradeAvaryfromNeutraltoBuybasedona40x2027EPEonthebackofahigher42%2026-29EearningsCAGRfromopticalandAIPCBledgrowth,asmajorplannedcapacityexpansionramps.WeremainNeutralonFastPrintasvaluationremainsdemandingdespiteourabove-consensusEPS;wemayturnmorepositivewhenAI/opticalmodulePCBsandABFsubstratebegintocontributemeaningfully.

Equities

China

CommunicationsTechnology

JimmyYu

Analystjimmy.yu@+86-21-38668880

EdwardLiu

Analyst

edward.liu@+852-37123981

DavidChow

AssociateAnalystdavid.chow@+852-37123512

ThisreporthasbeenpreparedbyUBSSecuritiesAsiaLimited.ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURES,includinginformationontheQuantitativeResearchReviewpublishedbyUBS,beginonpage37.

ChinaPCBandCCLSector10August2026ab2

ChinaPCBandCCLSectorUBSResearch

UBSResearchTHESISMAP

PivotalQuestions

UBSView

Evidence

What'spricedin?

LEASTFAVORED

MOSTFAVORED

SYT,Shennan,KBL,Avary

Q:HowdotheRubinandKyberbackplanedelayschangethePCBoutlook?

Onlytoalimitedextentinthenearterm,inourview,andwebelievetheextendedtimelinecouldbeaasharegainopportunityforpotentialentrantsasqualificationwindowsextend.WeexpectbackplanetofeatureinFeynman,rampingupfrom2028;weestimatethebackplanePCBTAMtobeRmb1.2bn/31.8bn/48.0bnin2028/29/30.WeexpectAvarytoenterRubinthroughHDIqualification,whileShennan'sbackplaneknow-howpositionsitasapotentialsupplier,alongsideSYTonCCL,whereweseeaPTFE-hybridsolutionasthemostfeasible.ShennanandAvarylookwellpositionedfornear-termgrowthin:1)opticalmodulePCB,benefitingahandfulofsupplierswithmSAPknow-how;and2)ASIC,whichwouldseehigherunitgrowthvs.GPUsin2026/27E.

Q:IsthemarketunderappreciatingtheconventionalCCLupcycle?

Yes.Webelievethemarketisoverlookingthesustainabilityofthisupcycleandpricinginanapproachingpeak.WethinkthiscyclecouldbemoreextendedthanpastcyclesduetostructuralS/Ddriversaswellasupstreammaterialtightness,withAIcrowdingoutconventionalsupplyandaddingincrementaldemandwhilenear-termsupplyresponsesremainlimited.WeforecastanindustryelectronicfabricS/Dgapofover10%through2027EaseffectivecapacityisbottleneckedbyToyota'sloomequipmentwhilepeersreallocatecapacitytowardsAI/specialityfabric.AconventionalCCLupcycleislikelytobenefitKBLandSYT,asitremainstheprimaryearningsdriverforboth.

Q:Whatistheearningsimpactandwhatismispriced?

Forourtoppicks,weraise2027/28Eearningsby58%/92%forSYTand30%/80%forShennan,puttingus8-29%aboveconsensus.Webelievethemarketisnotfullypricingin:1)SYT'sleveragetotheconventionalCCLupcycle,withsegmentrevenuerising103%/52%in2026/27EalongsideGPMexpansion,alsohelpedbyagreaterAICCLmix;2)Shennan'sopticalmodulePCBrevenuepotential,liftingPCBsegmentgrowthto38%/48%YoYin2026/27E;and3)theadoptionofKyberbackplane,whichweexpecttolift2026-29earningsCAGRsfrom38%/39%to44%/47%forSYT/Shennan,couldsupportpotentialvaluationupsideof59%/50%versus37%/24%onourcurrentpricetargets.

Sector-wise,wecontinuetofavourCCL/upstreamandremainselectiveonPCBnames.WeexpectKBLandSYTtobenefitfrommoresustainableconventionalCCLupcyclethrough2027,whileemergingAIexposuredeliversthenextlegofgrowth.ForPCB,weareselectiveoncompanieswith:

1)sharegainpotentialatNvidiaforlonger-termgrowth;and2)near-termearningsdriversfromopticalmodulePCBandASIC,whichweseeatbothShennanandAvary.

1)UBSforecasttop5hyperscalers'capextoincrease84%/45%YoYin2026/27E;2)KBLhashikedFR-4CCLpricesmultipletimesYTD,withmonthlyhikessinceMarch;3)E-glassfabrichasseenmonthlypricehikesYTD,withpricesnowathistoricalhighs;4)weforecastthenumberofex-Nvidiaacceleratorunitstoincrease49%/98%YoYin2026/27EversusNvidiaGPU(SIP)unitsof17%/36%.

TheWindPCBsectorindexhasfallen25%fromitsJuneall-timepeak,andweviewmarketpessimismasstemmingfromalaterbackplanetimelinealongsidebroaderweaknessinsentimenttowardsAIinfrastructurenames.Companiesinourcoveragenowtradewithinthe30-50x12-monthfwdPErangeasthe2019-215Gupcycle.Weforecastourcoveredcompaniestorecorda46%earningsCAGRin2026-28vs.33%in2019-21,suggestingfurtherre-ratingupside.

Figure1:OurChinaPCBcoveragebypreference–ratings,earningsandpricetargetchanges

MarketPriceOldpriceNewpriceNP

cap07-AugtargettargetOldNewEPSRevisionOldtargetNewtargetP/E(x)CAGRPEGROE

CompanyTicker(US$m)(LC$)(LC$)(LC$)RatingRating2026E2027E2028EPEmultiplePEmultiple2026E2027E2028E26-29E27PE/26-29E2026E2027E2028E

UBS-SChinaPCB/CCLSectorCoverage

ShengyiTechnology

600183.SS

50,393

140

97

192

Buy

Buy

38%57%91%35x(on26E)40x(on27E)43.3

29.2

20.8

38%

0.8

41%47%52%

ShennanCircuits

002916.SZ

38,627

383

285

473

Buy

Buy

-1%27%73%38x(on26E)*40x(on27E)*51.5

32.5

23.9

39%

0.8

26%31%31%

KingboardLaminates

1888.HK

15,331

38

-

58

-

Buy

----17x(on27E)18.1

11.5

9.2

30%

0.4

36%45%45%

Avary

002938.SZ

34,838

101

55

130

Neutral

Buy

0%8%9%24x(on26E)40x(on27E)45.7

31.2

21.8

42%

0.7

13%16%20%

ShenzhenFastPrint

002436.SZ

8,514

34

26

37

Neutral

Neutral

-32%19%12%58x(on26E)*55x(on27E)*109.8

50.2

33.3

67%

0.7

7%12%16%

Sectoraverage

53.730.921.8

43%

0.7

25%30%33%

Source:LSEG,UBSestimates.Note:TheEPSchangesofShennan,AvaryandFastPrintimpactedbyanincreasednumberofsharesoutstanding.*Implied2027EPEasvaluationisbasedonSOTP.

ChinaPCBandCCLSectorUBSResearch

ChinaPCBandCCLSector10August2026ab3

PCB/CCLsector:MultipleAIgrowthdriversahead

WeinitiatecoverageonKingboardLaminates(KBL)atBuyandaddthecompanytoourtoppickswithintheChinaPCB/CCLsectoralongsideShengyiTech(SYT)andShennanCircuits(raisingourPTsby98%and66%).SectorvaluationshavefallenmateriallyfollowingnewsofKyberorthogonalbackplanedelays(link)andthebroaderweaknessininvestorsentimentonthesustainabilityofAIinfrastructurebuild-out,butwebelievethefundamentalsofselectcompaniesremainintactwhilethemarketseemstobeoverlookingopportunitiesintwoareaswithattractiverisk/reward.

Weprefer:1)upper-streamCCLcompanies:SYT/KBL,whicharebenefitingfromanunprecedentedandmoresustainableconventionalCCLupcyclethrough2027EasmarginsexpandintheircorebusinesseswhileemergingAIexposure(speciality/AIglassfabricincludingLow-Dk/T/Q-glassforKBLandAI-gradeCCL/PTFEforSYT)deliversthenextlegofgrowth;and2)PCB:Shennan/Avary,withsharegainpotentialatNvidiaanddiversifiedAIPCBexposurefromopticalmoduleandASIC,giventheirleadingmanufacturingknow-how(HDI/mSAP)andamplecapacitytofulfildemand,inourview.

Kyberbackplane&Rubindelaysassharegainopportunities

Aswementionedpreviously,thebackplanetimelineisinlinewithourexpectationbasedonourearlyindustrystudyofupstreamCCLvendorsinMay,suggestingtheadoptionoftheorthogonalbackplaneislikelytostartwithFeynman.Despitealatertimeline,webelievetheKyberorthogonalbackplanewillunlikelybecancelledandcouldpotentiallyleadtocontentvalue/marketsharegainopportunitiesforPCB/CCLsuppliers.

WeseeemergingsolutionssuchasaPTFE-basedCCLsolutiongainingtractioninrecentsamplingtrialsoftheKyberbackplane,whilealongersamplingperiodprovidesmoretimeforyieldimprovementandsupplychainpreparation.WenowbelievetheM9/PTFE-hybridCCLsolutionappearstobethemostfeasibleoptionforthebackplane,wherePTFEwouldbeusedincriticallow-losslayerswhileM9-levelhydrocarbonandLow-Dk2glassfabricareretainedincorelayers.WeexpectSYTandShennantobemajorbeneficiariesoftheKyberbackplane,withevenhigherleverageifaPTFE-hybridsolutionisadopted.

UBSestimatesFeynman'srackvolumesof1.0k/26.5k/40.0kin2028/29/30E,whichcouldrepresentaKyberbackplanePCBTAMofRmb1.2bn/Rmb31.8bn/Rmb48.0bn.Ourbase-caseforecastsforShennanandSYTdonotfactorinearningscontributionsfromtheKyberbackplane.ButweestimatethatbackplaneadoptionupsidepotentialcouldaddroughlyRmb2,862mandRmb2,544minincrementalprofitstoSYTandShennan's2029Ebottomline,onthebackofoursomewhatconservativeassumptionsofa20%/50%supplierwalletshareforbackplanePCB/CCL,respectively.

Figure2:OurestimatesforthepotentialTAMoftheKyberbackplane

RackUnits

2026E

2027E

2028E

2029E

2030E

Blackwell(NVL72)

BlackwellUltra(NVL72)Rubin(NVL72)

RubinUltra(NVL72)

Feynman(NVL144/288)

17,778

48,608

6,150

1,863

27,537

58,826

1,800

4,738

20,000

70,000

1,000

20,000

26,500

984

40,000

Total

72,536

90,026

95,738

46,500

40,984

KyberBackplaneTAM

2026E

2027E

2028E

2029E

2030E

Feynman(NVL144/288)Rack

1,000

26,500

40,000

BackplaneperRack

4

4

4

BackplaneASP(Rmb'000)

300

300

300

BackplaneTAM(Rmbmn)

1,200

31,800

48,000

Source:UBSestimates

WeforecastaSYT/ShennanearningsCAGRof38%/39%over2026-29E,andestimatethiscouldaccelerateto44%/47%ifSYT/ShennansecureKyberbackplaneallocation.WebelievethiscouldleadtopotentialvaluationupsidetoourcurrentPTs,drivenbymultiplesexpansionfromhigherearningsgrowth.OurcurrentPTsimply37%/24%priceupside,whileweestimatebackplanecouldsupportpotentialvaluationupsideof59%/50%forSYT/Shennan(assumingtargetPEGremainthesameasourbase-casevaluations).Therefore,webelievecurrentvaluationsforSYTandShennanlook

ChinaPCBandCCLSector10August2026本UBS4

attractive,withupsidepotentialfromtheKyberorthogonalbackplanenotpricedin.Figure3:Oberon(NVL72)versusKyber(NVL144)rackcomparison

OberonNVL72vsKyberNVL144

GBNVL72Rack

(18×4=72GPUpackages)

VRNVL144Rack

(4x18×2=144GPUpackages)

OberontoKyberplatformtransition

4xChassisperrack

18xComputeTrays(Blades)perChassis

1ComputeTray/Bladehouses=1CPU+2GPUpackages

10xComputeTray

Slidesin

horizontally

Slidesinvertically

CPU

9xSwitchTray

8xComputeTray

SwitchTrays(Blades)movedtotheback

FrontViewFrontView

Source:UBS

Figure4:Kyber(NVL144)orthogonalbackplanecross-sectiondepiction

VRNVL144Rack

(4x18x2=144GPUpackages)

1xChassis

18xComputeTrays(Blades)perChassis

CrossSectionView

SwitchTrays(Blades)

connectedontheothersideofKyberBackplane

Slidesinverticallyaswell

1xKyberBackplaneperChassis

4xBackplanesperRack

Slidesinvertically,each“column”onKyber

Backplaneconnectsto1ComputeTray/BladeKyberBackplaneFrontView

Source:UBS

InourQ126PCBsectorGTCpreview,wenotedthattheM9+Q-glass+HVLP4couldbeafeasibleCCLsolution,butourlatestindustrystudysuggeststheQ-glasscombinationisonholdaftertwofailedsamplingtrialsinQ126,likelyduetoQ-glassprocessingdifficultiesina100+layersformfactor,inadequatesupplyandhighercostsversusotherpossiblesolutions(suchasLow-Dk2glassfabricwithmeaningfullyhigheryields).WeseeCCLmakerspivotingtoalternativesolutions,whichinclude:1)M9+PTFE-hybrid,which

ChinaPCBandCCLSector10August2026ab5

haspassedNvidia'sverification;and2)M10+LowDk2(bothsolutionsuseHVLP4copperfoil),withfinaldesignlock-infortheKyberbackplaneexpectedinQ426andmultipleroundsofsamplingcurrentlyunderway(wemetwithVictoryGiantatourH-shareCorporateDayanditindicatedthatmorethan10material/vendorcombinationsarestillbeingconsidered,includingvariouslayercountdesigns).

WenowleantowardsPTFEasthelonger-termbeneficiarygivenitsmuchbetterDk/DfperformancethanalternativesandalongerrunwayforpotentialadoptioninotherPCBs(computetrayMidplane/LPU/switchboard)forfuturegenerations,makingitmoreworthwhileforR&D.WeexpectShennantobeoneofSYT'sPCBpartnersonthebackplane,whichwouldmarkShennan'sfirstentryintoNvidia,ifnotearlier.

WebelieveSYTisleadingthePTFECCLformulafortheKyberbackplane,whileotherCCLsuppliersremaininearlysamplestages.However,thetechnicalbarremainshighforPTFECCLproductionaschallengesexistforboththeCCLandPCBsides:1)PTFEisverysoftanddifficulttodrillcleanly,producingburrsthathurtyields;and2)CTEmismatchwithcoppercreateswarpageriskinhigh-layer-countlaminationaswellasadhesiondifficulties.WethinkSYThasaddressedtheseissuesbyaddingSiO2fillertoincreaserigiditywhileloweringCTE,alongsideaddinghydrocarboncoatingforbetteradhesion.Thishaslikelyledtoproductionyieldsincreasingtoabout40-50%from20%,puttingthesolutionontrackforthemassproductiontimeline,accordingtoourindustrystudies.

DespiteQ-glass'soptimalDk/Dfperformanceoverotherspeciality/AI-gradeglassfabrics,webelieveQ-glass'sprocessingdifficultyhasshowntobehigherthanexpected,especiallyforHLCproductssuchasthebackplane,andhencealternativesthatprimarilyuseLow-Dk2(withM10)arealsobeingsampledinparallel.Therefore,weexpectgreaterdemandforLow-Dk2inthenear-termandlikelyalongerproductlifecycle.WebelieveadomesticAICCLsupplierwasthefirsttosendsamplesfortheM10solutioninFebruary,followedbyDoosan,SYTandEMCaroundJune.

Figure5:PTFEoutperformsalternativeresinsonDk/Dfperformance

PrepregComponents

Dk@10GHz

Df@10GHz

Resins

Epoxy

PPO

Hydrocarbon(BCB/PPOblend)PTFE(neatorSiO2-filled)

3.8-4.22.6-2.82.5-2.7

2.0-3.1

0.017-0.023

0.002

0.0007-0.00150.0002-0.0005

Glassfabrics

E-glass

LowCTE/T-glassLowDk1/NE-glass

LowDk2/NER-glassQ-glass

6.6-7.14.6-4.94.4-4.9

4.0-4.33.8

0.0035-0.0060.002-0.0030.001-0.0030.0008-0.002

0.0001-0.0003

Source:UBSestimates

WebelieveShennancouldbecomeasupplieroftheKyberbackplanePCB,especiallyifaPTFE-hybridsolutionisadopted.Wethinkthecombinationoflarge-scalemanufacturingHLCPCBandknow-howofPTFEprocessingisararecapabilityamongPCBvendors.Shennanstandsouttousonbothfrontswithatrackrecordincommunication-productbackplanes,withthecapabilityforupto120layersHLCPCBprototypescurrently,aswellasexperiencewithhigh-frequencyproductsthatutilisesimilarPTFE-basedsolutions.WethinkShennan'sleadingexpertiseinAI-gradePCBsisunderpinnedbyitsdomesticleadershipinBT/ABFpackagingsubstratesandmSAP,whichimposesevenstricterrequirementsonlinewidthandspacing.Overall,webelievethispositionsthecompanyforwalletsharegainsinkeyAIacceleratorprojects.Thatsaid,PCBpeerssuchasVictoryGiant(VGT),WUSandKinwongcouldalsoseewalletsharegainsintheKyberbackplanegivenexistingcustomerrelationshipsandmoreamplemanufacturingcapacitycomingonlinefrom2028E(accordingtoourPCBcapacitytracker).WeexpecttheretobemultiplePCB/CCLsuppliersfortheKyberbackplane.

RubinMPtoQ426;AvaryentersRubinwhileVGTshareremainslargelyintact

WebelievetheRubinvolumeramp-upislikelytostartinQ426,versusinitialexpectationsofAugust,drivenbyupstreamchipandmaterialsupplyconstraintsratherthanPCBmanufacturingissues,accordingtoourdiscussionswithsuppliers.Weseenoevidenceoffurthermaterialdelays,withVGTalreadyprogressingtosmall-batch

ChinaPCBandCCLSector10August2026本UBS6

productioninJuly.DespitemarketchatteraboutVGTlosingsignificantwalletshareonRubin,weexpectVGTtomaintainaroughly50%shareacrossallproductsatNvidiawhenRubinreachestheMPstageandmajorityHDIPCBshare.Meanwhile,weexpectAvarywouldgainallocationforRubincomputetray.

Figure6:PCBmidplaneinRubinVR200ComputeTray

Midplane(44LayersHLC)

RubinVR200ComputeTray

2×ComputeBoardsperTray

[BiancaequivaentinBlackwell]

RubinGPU

VeraCPU

RubinGPU

RubinGPU

VeraCPU

RubinGPU

→IncrementalPCBcontentvs.Blackwell

PCB

Source:UBS

WeexpecttheRubinComputeBoardtorunM8+Low-Dk1on26L(upfrom22L)HDI.ForSwitchBoard,itislikelytoadopta32-layerHLC,withM8.5+Low-Dk2(M9forcriticalsignal-intensivelayers,M8orbelowfortheremaining),butweexpectcurrentCCLshipmentsforswitchtrayPCBstostillutiliseaM8+Low-Dk2solution.Forthenew44LMidplanewithintheRubincomputetray,weexpectM9+Low-Dk2tobeadopted.

ForLPU,weexpectthetimelinetobebroughtforwardsothatitbecomespartofthe

Rubinline-up.WebelievetheLPUformfactorwilllikelyfollowHopper/HGX,witheight

LPUacceleratorsonasingleUBBPCBwithinacomputetrayand32traysintotal,

makingup256LPUsperrack.The52LUBBPCBislikelytoadoptM9+Low-Dk2versus

previousexpectationsofM9+Q-glass.Accordingtoourstudies,M9+Qdeliversonly

c.5%betterSlperformanceoverM9+Low-Dk2ontheLPUboard,whichwethinkdoes

notjustifyQ-glass'sroughly2xASPpremiumoverLow-Dk2currently.Overall,this

representsbroaderLow-Dk2adoptionandHVLP4copperfoilupgrade(fromHVLP2/3in

theGBseries)acrossallCCLacrossRubinPCBs.

Figure7:RubinVR200PCB/CCLspecsversusBlackwellGB300

RubinPCBs

BlackwellGB300

RubinVR200

ComputeBoard

-Prepreg

-CopperFoil

-PCBLayers

M8+LowDk1

HVLP3

22L

M8+LowDk1

HVLP4

26L

SwitchBoard

-Prepreg

-CopperFoil

-PCBLayers

M8+LowDk1

HVLP3

24L

M8/8.5+LowDk2

HVLP432L

Midplane(ComputeTray)

-Prepreg

-CopperFoil

-PCBLayers

---

M9+LowDk2

HVLP4

44L

LPUBoard

-Prepreg

-CopperFoil

-PCBLayers

1--

M9+LowDk2

HVLP4

52L

Source:UBSestimates

ramp-upversus400-500kattheGB300fullramp-up,withthebottleneckbeingHBM4

WeforecasttotalCCLdemandforRubinataround1millionsheetsamonthatfull

supply,inourview.MonthlyCCLshipmentsforEliteMaterial(EMC)andSYTwere100k

piecesrespectivelyforGB300,andEMCisalreadyrunningataround150kpiecesa

ChinaPCBandCCLSector10August2026本UBS7

monthforRubin.WeexpectRubinCCLsupplierallocationtobroadlytrackthatofBlackwellatroughly2:1.5:1forDoosan:EMC:SYT.WeexpectDoosantobeallocatedprimarilytoHDIcomputeboards,withEMCandSYTsplittingtheswitchboardallocation50/50,andEMCreceivingincrementalallocationonthecompute-trayMidplane.FortheRubinUltracomputeboard,webelieveSYThasalreadypassedqualification;weexpectNvidiamayallowallthreequalifiedCCLvendorstoparticipate,fromwhichSYTcouldseeincrementalgrowthfrom.

ConventionalCCLupcycleintact;pessimismlikelyoverdone

WewereamongtheearlymoverscallingforaCCLupcyclebackinH225(link,link).CurrentconventionalCCLpriceshaverisenabovethepreviousupcyclepeakofaboutRmb220/sheet,andwebelievethiscyclewillbemoresustainablethancurrentmarketexpectations.WenowforecastpricehikestocontinuethroughH127,withpricesreachingRmb365/sheetunderwhatweconsideraconservativescenario.

Figure8:OurestimatesforKBL'sconventionalFR4CCLASPpersheet

YoY

100%

80%

60%

40%20%0%-20%-40%

-60%2026E2027E

HK$persheet

450

400

350

300

250

200

150

100

50

2019202020212022202320242025

2018

Source:UBSestimates

WeexpectKBLandSYTtobedirectbeneficiariesofthisAl-drivenCCLupcycleasthetwolargestconventionalCCLmakersglobally.ConventionalCCLpricehikesareplayingoutasweexpectedpreviously,withYTDincreasesnearlydoublingsincetheendof2025andthemagnitudeofhikesintensifying.Inaggregate,KBLhascompletedmultipleroundsofpricehikesYTD,withmonthlyFR4/prepreghikessinceMarch,twohikesinAprilandastep-uptoincreasesof15%inbothJuneandJulyfrom10%previously.WebelieveSYT'sFR4CCLpricestrackcloselytoKBL'sandweretheprimarydriverofSYT'sH126preliminaryearnings,withprofitsmorethandoublingYoY(link)asconventionalCCLstillmakesupthemajorityofitsvolumemixataround80%.

Figure9:SimplifiedillustrationofCCLstructure

CopperCladLaminate(CCL)

CopperFoil

Resin

Prepreg

GlassFabric

giosjobricj

Resin

Source:UBS

Figure10:ConventionalversusAICCLmaterials

ConventionaFR4CCL

Al-gradeCCL

GlassFabric

Eglass

SpecialtyLowDk/T-glas(Low-CTE)/Qglass

CopperFoil

RTF/HTE

HVLP/2/314

Resin

Epoxy

PPO/Hydrocarbon/PTFE

Source:UBS

WebelieveacceleratingpricehikesaredrivenbyconventionalsupplyshortfallsasproductioncapacityshiftstowardsAl-gradeCCLontopofcostpass-throughsfromisingE-glassfabricprices(alsointightsupply)andcopperprices.WeestimateKBL's15%FR4CCLhikeinJuneledtoaroughlyRmb35priceincreasepersheet,whileglassfabriccosts(thelargestcostcom