Guotou Securities: The increase in both price and quantity of solder paste indicates a broad space for domestic substitutes in consumables.

Guotou Securities released a research report stating that the demand for AI computing power is driving a dual-high increase in the rate and usage of optical modules. As solder paste for optical modules is a core consumable in the production process of optical modules, its demand, specifications, and unit price are rapidly increasing in tandem with the demand for optical modules, resulting in a swift growth of the market scale. Currently, the domestic market share is primarily occupied by leading overseas companies, presenting significant opportunities for domestic substitution. The firm recommends focusing on domestic upstream and downstream enterprises with research and production capabilities for high-end solder paste, tin powder, and other products. Key points from Guotou Securities are as follows: Solder paste: A core consumable for modern electronic assembly, with rapidly growing market scale In the field of electronics manufacturing, the interconnection technology of components and circuit boards is crucial. Compared to traditional THT processes, SMT has become the mainstream assembly process due to its advantages of high density, high efficiency, and high automation level. Any defects in the printing process of the overall production workflow can affect up to 60% of the total defects, making it a critical process node that impacts overall yield. Solder paste, made from a mixture of alloy powder and flux, is also known as solder paste and is the most important core consumable in the entire printing process. Related performance indicators directly affect the performance of downstream products. The global market scale for electronic-grade solder materials is approximately $7.963 billion in 2025 and is expected to reach $12.16 billion by 2032, with a compound annual growth rate (CAGR) of about 6.3% from 2025 to 2032. AI computing power drives the upgrading and expansion of optical modules, with a market for specialized solder paste seeing both volume and price increases, potentially leading to several-fold growth. Solder paste is widely used in the mounting of PCB mainboards for optical modules, packaging of optical devices, welding of optical engines, flexible circuit boards (FPC), and welding of structural casings. The global explosion in AI computing power demand is driving simultaneous increases in the rate and usage of data center optical modules. The packaging upgrades for optical modules lead to higher solder joint counts and increased specifications for solder paste, with the average solder paste usage per unit growing by 300% from 400G optical modules to 1.6T optical modules. At the same time, the rate upgrades necessitate a specification enhancement, shifting from the highest T5 grade solder paste in 100G optical modules to the highest T7 grade solder paste in 1.6T optical modules, with corresponding increases in product unit prices. The value of solder paste for individual units from 100G to 1.6T optical modules is calculated to increase more than 70-fold based on median values. Overall, it is estimated that the market size for solder paste used in optical modules could rapidly rise from only 500 million yuan in 2025 to 8.5 billion yuan by 2028, with a CAGR of 150%. If the demand for solder paste specifications for subsequent 3.2T and higher rate optical modules increases to T8 or above, both the unit price and market scale for optical module solder paste are expected to accelerate further. Risk warnings: Risks of AI data center investment falling short of expectations; risks associated with global industrial chain distribution and geopolitical issues; risks of deteriorating market competition structure; risks of deviation in market space estimates.