Everyday learn new things! The AI boom is not just more chips. Those chips sit on big, dense circuit boards. The boards are built from a sandwich: glass cloth (the fabric) resin (the glue) copper foil (the wires) That sandwich is called CCL As AI servers get faster, the CCL has to get fancier. Less signal loss, smoother copper, special glass. Those quality steps are the M7 / M8 / M9 / M10 grades. Just like wagyu beef, the higher the number the better, or so I've been told HVLP is the super smooth copper foil those fancy grades need. With that in mind The chart is counting how many factories are actually qualified to make each step. Many exist, but they are just not good enough for Nvidia, Google, AWS etc. They tested the material on a real board for a year-plus and said yes. Ordinary high-speed board materials: a decent crowd (8 laminate makers, 10+ foil makers) Next-gen AI boards: the crowd shrinks (5 and 5) The generation after that: maybe two AI did not create a materials shortage. It created a short list. When only a handful of plants can pass the test, price and mix can stay tight even if the world is full of ordinary circuit board factories. In short, AI is just too picky, it should just work! Come on, just bend the laws of physics

China’s CCL giant Kingboard Laminates (1888 HK) just raised prices for the seventh time this year. Effective immediately for new orders, all FR-4 laminates and thick prepreg are up 10%. Thin prepreg is up 20%. Glass cloth and copper foil remain in short supply.

Abstract of PCB Sector & Initiation & Updates 🔥 Initiating & Transferring PCB Coverage: •Initiating CO-TECH. (8358 TT / Buy / TP: NT$480): Share px -54% since June, Margin ramp-up in 4Q26, expansion of HVLP3/4, and px hikes. •Raise TP: EMC (2383 TT / Buy / TP: NT$6,538): Google share gains, product mix upgrading toward M7+/M8+. •Raise TP: Kingboard Laminates (1888 HK / Buy / TP: HK$60.8): E-glass and FR-4 price hike cycle, expansion of high-end copper foil capacity. •Raise TP: Zhen Ding Technology (4958 TT / Buy / TP: NT$729): Market share gains in VR200, leveraging MSAP, ABF supercycle. ☀️ AI Server PCBs: •Nvidia Vera Rubin: PCB content per GPU $750 (vs. $400 for GB200). •Google TPU v8t/v8i: PCB content $800–$1,000 (vs. ~$700 for v7). •TAM Expansion: AI server PCB TAM projected at $13B in 2026 and $29B in 2027. •Zhen Ding benefits from Nvidia platform gains + mSAP dominance in optical modules/CPO. •mSAP Shortage: 2027 capacity constraints due to 800G optical switch and yield limits ☀️ CCL Dynamics: FR-4 Prices doubled to ~RMB 300 since mid-2025; upcycle extends through end-2027/2028. ☀️ Upstream Supply Shortage: •E-Glass Gap: ~15% shortage; requires 3,000 new machines, but Toyota's annual output is only 2,000 units (fully booked till 2028). •HVLP4 Foil: Year-end 2026 capacity at ~1,200 tons/month with a 400+ ton shortage. #PCB# #ZDT# #NVDA# #msap# #ABF# #EMC#

Some updates on bottleneck timelines: - ABF substrates: 1 year / eg. Ajinomoto (2802) for ABF film, Ibiden, Unimicron, Nan Ya PCB, etc make the substrates - HDI Boards: Over 6 months / Victory Giant (300476), Zhen Ding (4958), Unimicron, Compeq (2313), Meiko (6787) - Multilayer boards: ~6 months / Victory Giant, WUS (002463), $TTMI, Gold Circuit Electronics (2368), - CCL: Over 6 months (severe shortages of materials) / Elite Material (2383), Shengyi (600183), TUC (6274), ITEQ (6213), Nan Ya Plastics (1303), Resonac (4004) Mitsui Kinzoku (5706) / HVLP copper foil. Nittobo / glass fiber/cloth - MLCCs, chip resistors, tantalum capacitors, aluminum electrolytic capacitors: 15-20 weeks to 1 year+ MLCC: Murata (6981), Samsung Electro-Mechanics, TDK (6762), Taiyo Yuden (6976), Yageo (2327), Walsin (2492) Chip Resistors: Yageo, Walsin, KOA (6999), Rohm (6963) and $VSH Tantalum capacitors: Kyocera/AVX, Yageo/KEMET, $VSH again Aluminum electrolytic capacitors: Nippon Chemi-Con (6997) Nichicon (6996) | Timelines sourced from Digitimes, did the honors of adding in related companies. But it's slightly more nuanced since MLCCs and others mix. in commodity types vs. AI DCs. Regardless, just some helpful mapping.

Just some TLDR news I found interesting: 1. $GOOGL (missed this) also invested in Mediatek alongside $NVDA for their $3.9B raise. Google/Nvidia are goats with investments you look at $SPCX to Anthropic. 2. Samsung Electro-Mechanics discloses $778.9M MLCC deal / $CAPA (new MLCC ETF) also gives exposure now for folks without Korea/Japan/Taiwan market access. But thing is more accelerators x MLCCs per accelerator might indicate a more future extreme bottleneck than people expect. 3. China channel checks state: planetary roller screws, 6D force sensors, and dexterous hands resist domestic substitution. Then planetary roller screw as the top with lowest domestic substitution rate. eg. $SHA0.DE for planetary. Just interesting to hear moats I guess. 4. Samsung reportedly has ~70% of memory production capacity committed through 2031 / commodity DRAM has also fallen into short supply - Seoul Economic Daily. TrendForce expects server DRAM contract prices to rise 13-18% QoQ in 3Q26 SK Hynix also publicly stated the memory shortage lasts through 2030. 5. $CXMT has begun producing HBM3E in small quantities and reportedly claimed mass production of LPDDR6. Implications are even more positive for legacy DRAM shortages. 6. Cisco at SEMICON Taiwan said CPO is ready for mass deployment; pluggable modules will remain the market mainstay. $MRVL also said customers are actively planning scale-up optics deployments as early as 2027 7. Wingtech -> bought Nexperia -> Netherlands effectively removed Wingtech’s control -> Wingtech is fighting back through Chinese courts. But Nexperia got $300m of their assets frozen. More geopolitical drama of course, always entertaining. $AAPl also explicitly accused OpenAI of destroying crucial evidence... (for more fun) 8. Not much description around ASP hikes regarding SOI substrates $SOI, but they now have 10+ customers involved with LTAs, $200m revenue described as a "floor", comments about customers more concerned about obtaining wafers than where they are manufactured. So basically moving into capacity reservation now stages as silicon photonics takes off in 2027. 9. Some channel checks put lead times for high power MOSFETs and large area TVS diodes as high as ~52 weeks. ($STM also reportedly implemented its 3rd 2026 price increase on August 23) 10. Traditional packaging capacity could face a deficit exceeding 20% by 2027" with "wire bonding equipment" emerging as the primary bottleneck", covered this earlier this week with beneficiaries like 11. Claims that all six major ABF suppliers are booked for 2026, with 12-14 month lead times and some suppliers auctioning remaining capacity; $NVDA, $AMD and hyperscalers locking ABF capacity through 2028 and pushing suppliers to plan 2029–30 expansions. Names like Kinsus (3189), Unimicron (3037), Nan Ya PCB (8046), Ibiden (4062), etc are all probably happy. 12. CCL leading laminated board products increased by another 10%-20%, 7th price hike this year (eg. Kingboard). Industry estimates put the HVLP4 copper-foil shortage at ~48% in 2026 / 43% in 2027, while Low-Dk/T-Glass lead times have stretched beyond 30 weeks. 13. "(GaAs) substrate materials and gallium epitaxial source materials are also facing another round of price increases in the third quarter of 2026, reportedly 5 to 6 times higher than at the early stage of the restrictions." "China has recently eased some substrate export controls" but there's a "severe InP substrate shortage" per digitimes. Just some $AXTI related updates 14. $AMD and $AVGO reportedly booked most of Powertech's planned FOPLP capacity ahead of mid-2027 mass production 15. $INTC considering $INTC foundry for HBM4E base dies. But $SKHY responded directly that "some of the content is different from the facts". 16. "OpenAI Hoarding Tens Of Thousands Of $AAPL Mac mini and Mac Studio" for reinforcement learning. Anthropic has been renting mac mini units from $AMZN as well. Kinda sad Tim Cook retired, but dude had a goated run. Just random interesting notes

▶ Ajinomoto Raises ABF Substrate Film Prices by 30% - Japan’s Ajinomoto has decided to raise prices for its core ABF build-up film by 30%, with the new prices set to take effect from Q3 2026. - Taiwanese package substrate makers said they have officially received notice of the price increase, at a time when cost pressures remain elevated across the IC substrate supply chain. - Specific new pricing is still under negotiation with suppliers, but in the near term, the hike is expected to increase production costs before being gradually passed through to product ASPs. - Despite the ABF price increase, the largest cost burden is still understood to come from repeated price hikes in upstream raw materials, particularly CCL. - With urgent demand from AI chip customers continuing, quarterly price increases for ABF and BT substrates are expected to persist through year-end. The magnitude of price hikes could widen further in the second half. - Ajinomoto holds more than 95% share of the global ABF market, giving it strong pricing power across the supply chain. IC substrate makers noted that the previous price increase took place around early 2025, roughly a year ago, and said the latest 30% increase is also a “reasonable level” given strong customer demand. - Unlike Nittobo, whose conservative capacity expansion stance has deepened the shortage of T-Glass fiberglass for IC substrates, Ajinomoto had already anticipated changes in ABF supply-demand dynamics three years ago and moved ahead with proactive capacity expansion. - As a result, despite its near-monopolistic market position, the supply bottleneck is viewed as relatively limited. Ajinomoto recently announced plans to build a third ABF plant in Gifu Prefecture, Japan, in order to address demand beyond 2030. - The company has secured land for the project with an investment of around JPY 12 billion, or approximately USD 76 million, and plans to begin construction in 2028, with mass production targeted for 2032. The new Gifu plant is expected to be much larger in scale than Ajinomoto’s existing production sites in Kanagawa and Gunma prefectures. - In addition, as AI chip packaging layer counts are expected to expand from the current 3+3 level to 11+11 layers, and potentially to 13+13 layers after 2030, ABF demand is likely to sustain structural growth. - According to the industry, as the AI CPU, GPU, and ASIC upgrade cycle accelerates, demand is rising for larger substrate area and higher layer counts. As a result, ABF substrates are understood to have re-entered a supply shortage phase from 1H 2026. - Shortages are also emerging simultaneously across the upstream value chain, including fiberglass, copper foil, and drill bits. Therefore, the ABF supply-demand imbalance in 2027–2028 is more likely to intensify than ease. - The industry expects the IC substrate sector to enter a so-called “Super Expansion Cycle” over the next two to three years, which should improve order visibility across the sector.

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