The GTC conference has just concluded, and all eyes remain fixed on the new generation of GPUs unveiled by NVIDIA. Yet, as the fanfare subsides, the market segment truly experiencing price surges is not the chips themselves, but rather those unassuming materials tucked away inside servers-Copper-Clad Laminates (CCLs).
The industry has swept directly from the M8 standard to M9; processing fees for copper foil have skyrocketed from 10,000 RMB per ton to 200,000 RMB per ton, while the price of electronic-grade glass fabric is fast approaching 7 RMB per meter. This current AI market rally has quietly evolved from a race for computing power into a battle over materials pricing.
Technological Restructuring: How M9 Materials Became the "Lifeline" for AI Servers
GTC sent two critical signals: the realization of the Rubin architecture, and a shift in rack-level interconnects from "cables" to "PCB backplanes." Data transmission has transitioned from relying on "wires" to relying on "boards," transforming materials from supporting players into critical bottlenecks. In the past, the competition centered on raw GPU computing power; now, the focus has shifted to how fast data can actually travel.
Copper-Clad Laminates are categorized using a grading system ranging from M1 to M9, with performance primarily evaluated based on two key metrics: Dk (Dielectric Constant, which determines signal speed) and Df (Dielectric Loss, which determines signal attenuation). M7 and M8 currently represent the mainstream standards, while M9 is poised to become the standard configuration for the next generation of AI servers, with M10 already undergoing testing.
M9 is not merely "slightly better"; it represents a "generational leap" in materials technology. This is because high-frequency signals have begun to encounter fundamental physical limits: as transmission speeds escalate from 800G to 1.6T and then to 3.2T-effectively doubling the signal frequency-signal loss does not increase linearly, but rather rises exponentially. Without upgrading to M9, data simply cannot be transmitted effectively. The upgrade to the M9 standard is not merely an iteration of a single material, but rather a simultaneous restructuring across four major material categories:
Electronic Fabric: Evolving from standard fabric to Low-Dk fabric, and subsequently to Quartz fabric (Q-fabric)-the material currently in the most critical short supply on the market.
Copper Foil: Advancing from HVLP 3 to HVLP 4, and finally to HVLP 5; the core objective here is achieving a smoother surface finish to mitigate the "skin effect" (the phenomenon where high-frequency signals tend to travel exclusively along the surface of a conductor).
Resin: Shifting from traditional epoxy resins to hydrocarbon resins, a transition that immediately reduces signal loss by a full grade.
Fillers: Upgrading from angular-shaped powders to spherical silica microspheres, thereby increasing the filler ratio from 10% to 40%-a component of the process that has long been undervalued.
Deconstructing the Price Surge: A "Price Jump" Driven by Three Intersecting Forces
The current wave of price hikes can be aptly described as a "jump": copper foil processing fees have skyrocketed from 10,000–20,000 RMB per ton to 100,000–200,000 RMB per ton; filler prices have surged from a few thousand RMB to hundreds of thousands of RMB; and the price of high-end electronic fabric has breached the 20 RMB-per-meter mark. Underlying this phenomenon is the convergence of three distinct driving forces.
A "Structural Squeeze" on High-End Production Capacity
The layer count for PCBs used in AI servers has leaped from the 20–24 range to 40–78 layers; consequently, the value of the PCB content in a single AI server unit has reached 19,500 RMB-eight times that of a standard server. Producing just one unit of high-end copper-clad laminate (CCL) effectively consumes the production capacity equivalent to four to five units of standard CCL.
The data illustrates this even more starkly:
HVLP Copper Foil: With a monthly production capacity of only 700 tons, the current supply deficit already exceeds 17%. By 2026, demand is projected to reach 3,000 tons against an effective production capacity of only 1,300 tons-widening the supply gap to 57%.
High-End Glass Fiber Fabric (Q-fabric): Lead times have stretched from the standard 20–30 days to over 60 days, necessitating a quota-based allocation system for supply.
The "War Tax" Imposed by Geopolitics
The persistent instability in the Middle East-specifically the tensions surrounding the Strait of Hormuz, a critical global artery for oil transportation-has triggered severe volatility in crude oil prices. As downstream derivatives of petroleum, chemical raw materials such as epoxy resins and TBBA have consequently experienced a substantial surge in production costs. According to industry data, copper prices have surged by 43%; processing fees for standard copper foil have risen by 20%, while those for high-end copper foil have jumped by 50%. Glass cloth prices have seen an even more dramatic increase, soaring by as much as 100%, while resin prices have accumulated a 20% increase between January 2025 and March 2026.
The Third Factor: Upstream Suppliers Begin "Proactive Pricing"
Pricing power for high-end materials has long resided with Japanese manufacturers-high-end electronic cloth is dominated by Nitto Boseki and AGC; high-end copper foil is controlled by Mitsui Kinzoku; and high-end resins are monopolized by a consortium of U.S. and Japanese enterprises. Recently, both Lin Sen Nuo Ke and Mitsubishi Gas Chemical announced a 30% price hike for copper-clad laminates (CCL), while Kingboard Group explicitly announced a uniform 10% increase in processing fees for copper foil.
Supply Chain Dynamics: Who Holds the Pricing Power Amidst the Storm?
In the cost structure of a copper-clad laminate, copper foil accounts for 40%–50%, resin for 23%–30%, and electronic cloth for 18%–27%; collectively, these three components constitute 90% of the total cost. This implies that upstream materials represent the true core of profitability. The pivotal shift in the current market rally is that profits are now migrating upstream.
Upstream: A Locked-Down Supply Side
Approximately 90% of the global supply of high-end glass fiber cloth (known as "Q-cloth") is controlled by Japan's Nitto Boseki, and the construction cycle for new production capacity typically spans several years. According to feedback from BT substrate manufacturers, the lead time for orders from Mitsubishi Gas Chemical has already extended beyond 16 weeks. A substrate executive at a listed PCB company revealed: "We anticipate that the supply of glass fiber cloth will remain tight throughout the entirety of this year, with no relief expected until the second half of 2027."
The copper foil segment faces similar constraints. Global production capacity for HVLP Grade 4 copper foil is limited, and bringing new capacity online requires significant time. This "locked-down" state of supply has endowed upstream material manufacturers with unprecedented pricing power.
Midstream: A Tale of Two Extremes for CCL and PCB Manufacturers
Copper-clad laminate manufacturers have emerged as the direct beneficiaries of these price hikes. Shengyi Technology projects an 87%–98% increase in earnings for 2025, while Jin'an Guoji anticipates a year-on-year surge of 655%–871% in net profit for 2025-demonstrating astonishing earnings elasticity. However, PCB manufacturers situated in the midstream of the supply chain face a dual squeeze: upstream material costs continue to rise, while the ability to pass these costs on to downstream customers is sluggish, resulting in severely compressed profit margins. In such an environment, yield rate becomes a lifeline-a single scrapped board represents a loss not only of processing fees but also of material costs that have surged through multiple rounds of price hikes.
Material Prices Are Soaring-How to Respond?
Multiple factors have driven PCB raw material prices steadily upward. Against this backdrop, technology-driven PCB manufacturers specializing in high-layer-count, high-frequency, and high-speed boards have demonstrated superior resilience to risk. Take Shenzhen Prin Circuit as an example: having long focused on the high-layer-count and high-frequency/high-speed board sectors, the company has accumulated deep expertise in material selection, process control, and supply chain management. Faced with tight supplies of critical materials-such as high-end copper foil and specialized electronic fabrics-the company has leveraged proactive technical R&D and deep collaboration within its supply chain. This approach allows them to ensure timely delivery to customers while continuously optimizing process yields, thereby absorbing a portion of the rising material costs internally rather than simply passing the entire burden downstream. This exemplifies the survival wisdom of specialized PCB manufacturers amidst the storm: they do not compete on low prices, but rather win customer trust through technical depth and delivery reliability.
**The Window of Opportunity for Domestic Substitution**
Crises often harbor opportunities. Products such as Honghe Technology's ultra-thin electronic fabrics, Tongguan Copper Foil's HVLP copper foil, and Shengquan Group's specialized resins are all accelerating the process of domestic substitution. From initial validation to mass production, the current wave of price hikes is compelling the entire industry chain to restructure its supply ecosystem.
The fundamental nature of the current AI market boom has shifted: the focus has moved from computing power upgrades to material pricing. The value chain is permanently shifting upstream, with profits migrating from PCB manufacturers toward material suppliers. Whether one is an end-brand owner or an intermediate manufacturer, whoever secures a stable supply chain for high-end materials will hold the strategic initiative in future market competition.
The PCB industry has long been characterized by intense internal competition-often described as "involution"-yet the current wave of price hikes is reshaping the very rules of survival within the sector. Manufacturers that rely solely on low-price strategies to compete will be weeded out, while those possessing technical prowess, effective management, and deep supply chain integration will emerge from this storm stronger than ever.