Zheshang: The core precision consumables of AI computing power, the quantity and price of PCB drilling needles, resonate to open up growth space.

Zheshang has published a research report stating that PCB drilling needles are entering a growth phase resonating with the three factors of "volume, price, and loss." It is estimated that the demand for AI server PCB drilling needles will increase from 800 million units in 2026 to 3.92 billion units by 2030. Resource locking, proximity to customers, and continuous iterations will jointly support domestic leading enterprises in shifting from leading market share to high-end leadership. The four main themes of structural upgrading, industry expansion, deep barriers, and domestic substitution resonate together, highlighting the investment value of the sector. Zheshang's main points are as follows: PCB drilling needles are the core precision consumables of AI computing hardware, gradually shedding the cyclical nature driven by consumer electronics and entering a growth phase resonating with "volume, price, and loss." Volume: The number of PCB layers in AI servers is increased from the traditional 12-16 layers to 24-40 layers, with thick boards requiring segmented drilling, boosting the needle consumption per board; Price: The global market share of coated drilling needles is expected to rise from 35.4% in 2025 to 51.6% in 2030, with the unit price of high-end drilling needles reaching 3-5 times that of ordinary drilling needles, and the demand growth rate for drilling needles significantly outpacing the shipment growth rate of AI servers; Loss: The penetration of M8/M9 high-frequency high-speed copper-clad laminates reduces the lifespan of a single drilling needle from 2000-3000 holes in FR-4 to about 100-200 holes in M9, greatly increasing the frequency of needle replacement. The vigorous development of AI computing power lays the foundation for the expansion of the drilling needle market. Data from Prismark and Frost & Sullivan indicate that the global PCB drilling needle market size has grown from 4.1 billion yuan in 2021 to approximately 6 billion yuan in 2025; with global AI server shipments expected to increase from 3.1 million units in 2026 to 6.5 million units by 2030, and the number of mechanical holes per board and the consumption coefficient per hole continuously improving, this report estimates that the demand for AI server PCB drilling needles will increase from 800 million units in 2026 to 3.92 billion units by 2030. Considering the continuous increase in the proportion of high-end drilling needles, the average selling price (ASP) is expected to rise year by year, with the corresponding market space growing from 1.93 billion yuan to 14.88 billion yuan, becoming the fastest-growing subfield of PCB drilling needles. High production barriers for high-end PCB drilling needles strengthen the leading manufacturers. Four key barriersmaterials, equipment, process, and customer certificationhave created an oligopolistic structure, with the global CR5 reaching 79.8% by revenue in 2025. High-end drilling needles require a breakage rate of less than 0.01%, and customer onboarding must go through sample testing, mass validation, and long-term supply assessments, resulting in deep binding and high switching costs; ultra-fine crystalline rod material formulation, precision grinding, coating deposition, and micron-level detection together form a comprehensive threshold. In 2025, the top five global manufacturers will account for 75.7% of total volume, and the increased quality requirements for AI servers and IC substrates will further strengthen industry consolidation. Resource locking, proximity to customers, and continuous iterations will co-drive domestic leading enterprises from market share leaders to high-end frontrunners. China's tungsten ore production accounts for about 79% of the global total, with reserves accounting for approximately 53%. Tightening mining quotas and export controls on tungsten-related items have raised the raw material costs for overseas manufacturers; PCB output value from mainland China accounts for 36% of the global total, with 43 Chinese companies entering the global Top 100, achieving an output value of 30.7 billion USD. Domestic drilling needle companies are closer to the downstream market and respond more swiftly; technological iteration in coating, combined with upgrades in ultra-long aspect ratios and ultra-micro diameters, has allowed domestic companies to capture the top two global sales spots in drilling needles by 2025, with leading product average prices and gross margins rising in tandem, and the substitution process moving from mid-to-low-end towards high-end leadership. The resonance of structural upgrading, industry expansion, deep barriers, and domestic substitution highlights the investment value of the sector. Attention is recommended for Guangdong Dtech Technology, China Tungsten and Hightech Materials, Xiamen Tungsten, Jiangxi Tungsten Rare And Precious Equipment, Shareate Tools Ltd, and OKE Precision Cutting Tools: Guangdong Dtech Technology is the global sales leader with the highest purity in drilling needle operations, continuously increasing the proportion of high-end micro-drills and coated drilling needles, benefiting most directly from the growth in volume and price of AI servers; China Tungsten and Hightech Materials integrates tungsten resource - rod - micro-drill, with Jinzhu Jinggong accelerating production expansion, while a 130 million micro-drill renovation project is expected to achieve production and efficiency by mid-2026; Xiamen Tungsten has strong capabilities in high-end rod materials and benefits from upstream domestic substitution; Jiangxi Tungsten Rare And Precious Equipment plans to raise no more than 1.898 billion yuan to acquire Jiangying, Huamao, and Jiuyie, after which the transaction will streamline the tungsten powder to rod material chain; Shareate Tools Ltd acquired Huilian Electronics to enter the finished drilling needle market, achieving full-process self-manufacturing from rod to coating; OKE Precision Cutting Tools, based on CNC blades, aims to gain a controlling interest in Yongxin Precision, extending into PCB micro-drills, serving nearly 80 PCB manufacturers, including Suzhou Dongshan Precision Manufacturing and Victory Giant Technology. Risk warning: AI server demand growth may fall short of expectations; significant fluctuations in the prices of raw materials such as tungsten and cobalt; slower than expected penetration of M8/M9 materials; uncertainties in the acquisition and delivery of targets; industry capacity expansion exceeding expectations leading to intensified competition.