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2026 Research Report on Structural Differentiation and High-Quality Development Strategy of China's Printed Circuit Board (PCB) Industry

Introduction: Structural Cycles in the PCB Industry via Chinese New Year Holiday Trends

In 2026, the PCB industry in China exhibited extreme operational divergence during the Lunar New Year, serving as a microcosm of the transformation within China's electronics manufacturing sector. According to the Beijing Municipal Commission of Transport, the 2026 Spring Festival travel rush (Chunyun) began on February 2 and lasted until March 13. With the holiday extended to nine days, total social mobility reached a record high of 110 million passenger trips.¹ Against this backdrop, the PCB industry saw a "Dual-Track" pattern: small factories took long breaks while large factories maintained full production. Numerous small and medium-sized enterprises (SMEs) closed for 20 to 30 days due to shrinking orders and rising costs, whereas leading giants maintained high operations to fulfill orders for AI servers, High-Performance Computing (HPC), and 800G/1.6T optical modules, with production schedules already booked through the second quarter.² This contrast reflects the industry's transition from "scale expansion" to "value chain restructuring" at the start of the 15th Five-Year Plan.⁴

Chapter 1: Macro Environment and Development Stages in 2026

1.1 Structural Differentiation Under Moderate Economic Recovery

China's macroeconomy in 2026 is characterized by moderate recovery with structural differentiation, with an expected GDP growth target of approximately 4.9%.⁵ While exports remain resilient and investment is recovering, consumer goods face short-term pressure. For the PCB sector, this translates to stagnant demand in traditional consumer electronics (entry-level smartphones, tablets), leading to order shrinkage for SMEs. Conversely, investment in AI-led computing infrastructure has entered a new "Super Cycle," providing continuous growth momentum for technologically advanced large-scale factories.³

1.2 Global Position and Trade Trends

China remains the world's largest PCB production . From 2016 to 2023, China's share of global PCB output value rose from 50% to nearly 55%.⁴ By 2026, the industry is transitioning from "following" to "running alongside" and eventually "leading" in key segments.⁴

China maintains a significant trade surplus in PCBs, reaching $12.52 billion in 2024—a 31.2% year-on-year increase.⁴ This highlights China's role as an indispensable supply hub in the mid-to-high-end global chain, despite the internal divergence between large and small players.

Chapter 2: Industrial Logic Behind Holiday Disparities

2.1 Long Holidays for Small Factories: Margin Squeeze and Cost Sensitivity

SMEs in the PCB sector adopted "extra-long holiday" strategies in early 2026 due to product homogenization and low customer stickiness, primarily focusing on single/double-sided boards and simple multi-layer boards.

1.     Low Order Visibility: Demand for low-end consumer electronics fluctuates wildly. Without a technical "moat," these factories lack bargaining power. Utilization rates for such plants hovered around 60%-70% during the recovery.⁵

2.     Extreme Cost Sensitivity: Raw materials account for roughly 60% of PCB costs.⁶ During the Spring Festival, labor costs spike (3-5x overtime pay), and logistics efficiency drops. For factories with gross margins near 10%, operating during the holiday often results in a net loss.

3.     Technological Lag: By 2026, high-end CCD drilling and routing machines accounted for 80%-90% of the market. Companies have stopped taking new orders for legacy equipment, leaving SMEs unable to compete on precision or efficiency.⁹

2.2 Short Holidays for Large Factories: AI Dividends and High-End Delivery

Leading enterprises like DSBJ and SCC maintained utilization rates above 80% during the holiday.

1.     AI Infrastructure Boom: 2026 is a pivotal year for AI computing, with global tech giants significantly increasing capital expenditures.² Demand for AI server boards, accelerator cards, and 800G optical module boards is explosive.

2.     Supply Chain Synergy: Large factories are deeply integrated into the supply chains of global OEMs. Stopping production could cause a "bullwhip effect" in global electronics, making continuous operation a contractual necessity.

3.     Digitalization Advantages: Top-tier plants have completed "AI+IoT" upgrades, reducing dependence on manual labor and mitigating holiday labor shortages.⁴

Chapter 3: Downstream Drivers: AI, Telecom, and Automotive

3.1 AI Super Cycle and High-End Board Demand

The explosion of AI servers has led to a qualitative leap in PCB requirements.

·      High Layer Counts: AI motherboards have evolved from 12 layers to 24+ layers, utilizing Any-layer HDI and IC Substrate technologies.⁶

·      High-Speed Signal Integrity: As rates exceed 112Gbps, requirements for ultra-low-loss materials (M6/M7/M8) and precise impedance control have become mandatory.

3.2 800G/1.6T Optical Module Iteration

Sales of 800G optical modules are expected to double to 33.5 million units in 2026, while 1.6T products will see significant volume growth.¹⁰

Silicon photonics penetration is expected to reach 50%-70% by 2026, creating high-margin opportunities for PCB manufacturers capable of high-density packaging.³

3.3 Evolution of Automotive Electronics

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