Technology - Asia-Pacific (H): CCL/PCB: undersupply in high-end segment to sustain along with technology migration

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Technology - Asia-Pacific (H): CCL/PCB: undersupply in high-end segment to sustain along with technology migration

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Technology - Asia-Pacific (H)

CCL/PCB: undersupply in high-end segment

to sustain along with technology migration

Price Objective Change

High-end CCL/PCB: expect undersupply to last till CY27 06 July 2026

We expect S/D to remain tight for high-end CCL/PCB toward late 2027/early 2028 given Equity

further migration toward HDI, relatively low yield rate/output in certain new technologies Asia-Pacific

(e.g. quartz-based solutions), and continuous capex increase with further capacity Technology

expansion by PCB vendors. Between CCL and PCB sectors, we believe the former could Mike Yang >>

be more immune to the downside risks from the inflection (if any) of AI server capex Research Analyst

cycle, thanks to 1) a more consolidated landscape (only 5-6 major suppliers for high-end Merrill+886 2Lynch2376 (Taiwan)3729

CCL); and 2) a more disciplined supply expansion by industry participants along with mike.c.yang@bofa.com

lengthy equipment lead time from key suppliers (e.g. Asia Metal). We reiterate our Buy

rating on EMC, TUC and Dynamic Holding in view of their bigger potential in share gain

S/D – supply/demandacross GPU/ASIC accounts.

CCL – copper clad laminate

Technology upgrades continue; raise EMC/TUC POs

We flag positives for EMC’s M9 (quartz-based) CCL as it boasts superior performance PCB – printed circuit board

(vs low Dk2-based CCL) based on certain criteria (e.g. Dk/Df). For the production

HDI – high density interconnectdifficulty and yield rate improvement on PCB side, we also believe it is relatively easier

to solve (vs PTFE-based CCL), along with initiatives including the adoption of more laser EMC – Elite Material