As soon as the TPCA SHOW ended at the end of October, the Taiwan stock market immediately ushered in the second time in 2026: falling by more than 7,000 points in a month. It stands to reason that AI will create the fourth industrial revolution, and the long-term development trend is positive. However, because the demand is too strong, the demand for capital expenditures, AI chips, cabinets, power systems and components will continue to rise in 2026. The supply side is stuck, causing all product quotations to rise, including financing costs!!! Supply is stuck, which will inhibit the speed of demand growth, and the dream market at the end of the year turns to look like a nightmare. However, looking at the financial reports and outlook of the four major cloud companies CSP, AI demand is still strong, and the stock market is going through a valuation correction that is worried about supply bottlenecks, leading to unavailable demand in 2027. As of the deadline, according to Bloomberg, the price-to-earnings ratio of Taiwan stocks in 2027 has been revised to less than 14 times, and the valuation has fallen to the lowest point since the AI era. If a reasonable logical answer can be found for the worries, there will be a chance to attract capital back again. Therefore, when the market retreats, it is still important for investors to pay attention to industry development trends and then choose opportunities for deployment.
Hitting the advanced packaging and materials revolution, mass production of glass substrates is still waiting for 2028
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The author summarizes four major exhibition highlights from this TPCA SHOW: advanced packaging and heterogeneous integration, key glass substrate technologies, high-end substrate material upgrades, and PCB large and thick plate design. Among the four key points, only the key technology of glass substrate and the technology of introducing the core layer of the carrier board will not be seen until 2028-2029 at the earliest, which is still a challenging period for technological breakthroughs.
Currently, the estimated PE of Taiwan stocks in 2027 has fallen back to a historical low of less than 14 times, reflecting that the sentiment correction has been relatively sufficient and the long-term growth pattern of the industry has not changed. (File photo)
Advanced packaging and heterogeneous integration are the keys to PCB semiconductorization that Xinxing and Taiwan Optoelectronics are proposing. In the past, single chips were shrunk through the semiconductor process. When the process faced physical limits, memory and chips were combined through packaging technology, moving towards a 2.5D chip architecture. In the future CPO generation, optical engines will be further integrated with the main chip, and the "heterogeneous integration" of system-level chips will become more like a giant tank. For system-level chips, IC carrier boards play an important role in the packaging process, which also made Xinxing Chairman Mr. Jian Shanjie shout out that the PCB carrier board area in 2028 will increase more than 9 times compared with the carrier board area of high-end chips before 2020! It is expected that the delivery time of carrier boards and related materials and equipment in 2027 will still be tight.
As for the upgrade of high-end substrate materials, major new AI platforms will be upgraded by the end of 2026, including: Huida Vera Rubin, Google TPUv8, AWS Trn3 and Microsoft Maia300. Under the requirements of high-speed transmission and extremely low loss, the accelerator card PCB or switch PCB has been fully upgraded to M8 grade materials. Huida LPU cabinets will use M9 grade materials for the first time to carry Q cloth. Past experience, Huida and ASIC chip design, will start discussing the next generation product design a year ago, Huida even proposed using PTFE to design the PCB in the next generation Rubin Ultra. When the author visited TPCA SHOW, the industry generally believed that the material has excellent electrical properties, but it is difficult to process into PCB and the yield rate is extremely low. Huida will eventually directly use M10 grade materials. However, the issue of PCB material (copper foil substrate) specification upgrade will make another big leap forward from 2H27 to 2028.
The design of large and thick PCB boards is due to modular chips. Giant chips need to lay out more circuits. Therefore, the amount of carrier boards has doubled, and PCBs are also facing an increase in the number of board layers (22-36 layers, moving towards 40-50 layer designs), or the process may be adjusted to the HDI/mSAP process to increase wiring space. In the manufacturing of PCB large and thick plates, or the introduction of HDI into the process, in addition to the growth in demand for fiberglass cloth and copper foil, the demand for back drilling machines and thunder drilling machines also increases simultaneously.
PCB supply and demand will be tight across the board in 2027, and small and medium-sized Taiwanese factories will be affected by both rain and dew.
In summary, as AI infrastructure continues to be built in 2027, the PCB supply chain will be the component with the tightest supply and demand besides HBM. Based on the first-line observation of TPCA Show, Taiwan’s PCB and semiconductor supply chain is building an irreplaceable PCB TEAM TAIWAN ecosystem globally with its powerful manufacturing process, micro-circuit yield, advanced heterogeneous integration capabilities, and complete vertical integration system from fiberglass yarn/cloth, resin, copper foil to CCL and carrier board. Furthermore, from the four major exhibition highlights mentioned above, many small and medium-sized enterprises, including equipment, consumables, specialization, etc., have also benefited from PCB semiconductor business opportunities and are enjoying the golden period of AI growth along with Taiwan's technology industry.
(The author is the general manager of Uni-President Securities Investment Consulting Company)
