BlockBeats news, on June 23, Citibank stated that AI server and high-speed network upgrades are reshaping the growth outlook for China’s PCB industry, and has raised its price targets for Huadian Electronics and Shenghong Technology, citing the likelihood that AI-PCB demand will continue to expand rapidly over the next three years.
In a report released on June 21, Citibank raised its forecast for the total addressable market size of AI-PCBs from 2026 to 2028 to RMB 152 billion, RMB 307 billion, and RMB 562 billion, representing year-over-year growth of 86%, 102%, and 83%, respectively. The bank stated that the new model incorporates demand for CPU and optical module PCBs and provides a forecast for 2028 for the first time.
Citigroup expects that by 2027, AI-PCB demand will be dominated by ASICs, accounting for approximately 34%; NVIDIA GPU-related demand will account for 24%, CPUs for 16%, switches for 14%, and optical modules for 12%. In terms of growth rate, network-related demand will be the strongest, particularly with the surge in 1.6T optical modules and switches, potentially driving growth in optical module PCBs by 135% in 2026 and 178% in 2027.
The report suggests that Google TPU-related PCB procurement could become a key growth driver by 2028. Citigroup expects Google’s TPU PCB procurement to reach $16 billion by 2028, surpassing NVIDIA’s GPU-related PCB demand. Breaking down the incremental demand added between 2027 and 2028, Google TPU accounts for approximately 30%, NVIDIA for 25%, and switches and optical modules each contribute 14%.
As demand for AI-PCBs expands rapidly, capacity may become a new constraint. Citigroup expects the next round of PCB capacity expansion announcements to begin in the second half of 2026 to support demand in 2028. The bank notes that it typically takes Chinese PCB manufacturers 13 to 15 months to move from greenfield projects to mass production, and the expansion cycles for upstream materials such as fiberglass and copper-clad laminates are even longer, potentially reaching 18 months.
This suggests that AI-CCL supply may become even tighter. Citi believes that as major AI-PCB projects ramp up from the second half of 2026, leading PCB manufacturers with the ability to secure raw materials will see improved profit visibility in 2027. Related capacity expansion announcements could also serve as industry catalysts, reinforcing investor confidence in the long-term growth of AI-PCB.
Regarding individual stocks, Citigroup maintains a "Buy" rating on Huaqi Electronics and Shenghong Technology. The bank raised Huaqi Electronics' target price from CNY 119 to CNY 189, citing the company's strong mass production and delivery capabilities in the fields of data center switches and AI server PCBs. Citigroup forecasts Huaqi Electronics' net profits to reach CNY 6.7 billion, CNY 12.1 billion, and CNY 23.2 billion in 2026, 2027, and 2028, respectively, and believes its annual profit compound growth rate could reach 86%.
The target price for Shenghong Technology has been raised from NT$415 to NT$456. Citigroup has lowered its net profit forecast for 2026, primarily reflecting lower-than-expected revenue contribution from Rubin, but believes profitability in 2027 will remain largely stable, and has introduced its first net profit forecast of NT$23.2 billion for 2028. The bank notes that Shenghong Technology’s long-term relationship with NVIDIA, HDI production capacity, and potential opportunities in data center switches and ASICs continue to support its valuation premium.
However, Citigroup also noted that the AI-PCB market still faces multiple risks, including lower-than-expected order shares related to GenAI, yield issues, price competition in the automotive supply chain, reduced capital expenditures by cloud providers, weakening macro demand, rising material costs, and U.S.-China geopolitical risks.
Overall, Citibank’s assessment is that AI-PCB demand is no longer driven solely by NVIDIA GPUs but is expanding to include ASICs, Google TPUs, high-speed switches, and optical modules. As demand is expected to enter the capacity planning phase ahead of 2028, leading Chinese PCB manufacturers with advanced manufacturing capabilities, strong customer relationships, and material supply security are likely to remain key beneficiaries of the expansion of AI infrastructure.