Electronic Fabric: The Core of AI Electronic Fabric Is Positioning and Volume Growth; Valuations Return to the Striking Zone [Zhongtai Building Materials & Chemicals | Sun Ying Team]

English summary

Electronic fabric remains the most certain link in the PCB chain. On one hand, it accounts for a very small portion of the terminal BOM, so it captures larger incremental elasticity. As long as leading CSPs do not give up, materials can enjoy the dividends of volume growth and upgrades. On the other hand, domestic companies are deeply embedded in global supply chains, with high deliverability of performance. In Q3, demand from terminal cabinets of NV, Google, AMD, etc., is being released intensively, and AI fabric shipments are accelerating. Core companies have recently been revising up their guidance from the end of this year to next year. Each company has different characteristics. # We place more emphasis on core customer positioning and volume ramp-up: International Composites' second-generation fabric is positioned in the SY chain with the largest volume; Sinoma Science & Technology supplies TG and SY; these two have leading positioning and volume advantages. Low CTE electronic fabric has a steep demand slope and relatively dispersed customers, with customers proactively locking in volumes; Honghe Technology has the largest volume and high gross margins. For ordinary electronic fabric, whether in yarn or fabric segments, supply and demand are tight and the price increase trend continues. Jushi is also actively expanding into AI electronic fabric. ...