Goldman Sachs Thailand/Vietnam tech supply chain survey: AI servers and PCB capacity expansion remain the core theme

Overview

This report summarizes Goldman Sachs' factory visit findings on the technology supply chain in Thailand and Vietnam, covering PCB, drilling tools, optical modules, FAU, and ODM segments. The companies surveyed include ZDT, Avary, Victory Giant, WUS, Delton, Dynamic, DTech, and FII, with a focus on overseas capacity expansion, AI infrastructure demand, regional supply chain specialization, labor and production costs, and company-level expansion progress.

Core views

The core view is that Southeast Asian capacity expansion is continuing, and the new capacity is not merely a transfer of low-end manufacturing, but is increasingly aimed at high-value-added products related to AI data centers. Mainland China remains the center with the highest manufacturing efficiency and the most complete supply chain, but customer requirements for manufacturing diversification are driving companies to form differentiated supply chain clusters in Thailand, Vietnam, and Malaysia. Overall, the report maintains a positive view on the AI capex cycle, AI servers, and demand for high-end PCBs.

Analysis framework

Based on on-site factory visits and management discussions with multiple supply chain companies in Thailand and Vietnam from July 7 to 10, the report summarizes six main conclusions from the perspectives of capacity, products, customers, costs, labor, regional clusters, and company competitiveness, and interprets them in conjunction with Goldman Sachs' existing rating framework for AI servers, CSP capex, and related covered companies.

Methodology notes

• Field researchThailand / Vietnam Tech Tour

  Factory visits and management discussions

  By visiting the production bases of PCB, drilling tool, optical module, and ODM companies in Thailand and Vietnam, the team observed expansion progress, automation levels, customer validation, labor structure, and cost constraints.

• Equity research frameworkGS Factor Profile

  Growth, financial returns, valuation multiples, and composite percentile

  Goldman Sachs states that its factor framework provides investment context based on covered stocks' growth, financial returns, valuation multiples, and composite indicators relative to the market and industry peers.

• Trading scenario frameworkM&A Rank

  M&A probability tiers

  Goldman Sachs states that it uses a 1-to-3 M&A ranking for covered companies, representing higher, medium, and lower potential acquisition probability, and includes this in target prices when applicable.

• Database toolQuantum

  Database of financial history, forecasts, and ratios

  Quantum is Goldman Sachs' proprietary database, which can be used for in-depth single-company analysis or cross-industry and cross-market company comparisons.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Foxconn Industrial Internet (601138.SS)

  Core beneficiary in AI servers and ODM

  Strengths

  Management is optimistic about the AI capital spending cycle; the company has strong R&D, fully automated production, integrated component/server/switch solutions, and diversified production bases, with more than 15 years of experience in Vietnam.

  Weaknesses

  Overseas capacity expansion still needs to continuously meet customer demand and ramp-up requirements.

  Comparison

  Compared with companies newly entering Vietnam, FII has longer local production experience, lower depreciation costs, and a more mature network of supply chain, customer, and government relationships.

  Risks

  Slower AI capital spending, customer project delays, and overseas capacity ramp-up below expectations.

• Victory Giant (300476.SZ)

  Beneficiary in high-end PCB and AI networking PCB

  Strengths

  Thailand A1 is already in mass production, A2 is under construction and targeted for mass production in 3Q26; management is optimistic about expanding high-end PCB products in Thailand to support demand from global customers.

  Weaknesses

  The progress of new capacity construction and customer validation affects near-term contribution.

  Comparison

  Having multiple factory sites in Thailand helps it capture diversified supply chain demand from global customers.

  Risks

  Capacity ramp-up, production efficiency, cost control, and geopolitical changes.

• WUS (002463.SZ)

  Leading player in AI networking PCB

  Strengths

  The report remains positive on its leading position in the AI networking PCB market, and product mix upgrades are expected to drive profitability.

  Weaknesses

  Overseas capacity is still in the growth stage and needs to improve utilization and complete more customer validations.

  Comparison

  Overseas capacity helps the company improve delivery capability under geopolitical uncertainty and capture global AI PCB demand.

  Risks

  Customer validation below expectations, overseas factory efficiency below plan, and fluctuations in AI networking demand.

• Avary (002938.SZ)

  Participant in capacity expansion for server PCB, optical module PCB, and smart device PCB

  Strengths

  New capacity in Thailand is expected to contribute over the next few quarters; the company's factories have a high degree of automation and use renewable energy to ensure speed, quality, scale, and sustainability.

  Weaknesses

  Not included in Goldman Sachs coverage, so the investment view lacks a formal rating.

  Comparison

  Capacity expansion in Thailand enables it to meet global customers' requirements for diversified capacity.

  Risks

  Timing of contribution from new capacity, changes in customer demand, and overseas cost control.

• Dynamic Electronics (603175.SS)

  Participant in AI PCB expansion in Thailand

  Strengths

  Plans Rmb3.3bn in capital expenditure for the P5 and P5A plants, targeting AI server- and optical transceiver-related PCBs.

  Weaknesses

  Management mentioned margin pressure from higher material costs and ramp-up of new capacity.

  Comparison

  Seeks earnings recovery through scale expansion, PCB mix upgrades, and efficiency improvements.

  Risks

  Rising material costs, prolonged ramp-up cycle, and slower-than-expected margin recovery.

• Delton (001389.SZ)

  Participant in high-end PCB capacity expansion in Thailand

  Strengths

  Announced a US$80m investment plan in Thailand to serve overseas customers' AI PCB demand; rising utilization at the Thailand plant supported earnings growth in 1H26.

  Weaknesses

  Overseas capacity still depends on continued end-demand and specification upgrades for AI PCB.

  Comparison

  Compared with companies relying only on domestic capacity, the Thailand plant enhances its competitiveness in the global market.

  Risks

  AI PCB demand below expectations and slower-than-expected realization of expansion benefits.

• DTech (301377.SZ)

  Supplier of PCB drill bits and drilling tools

  Strengths

  The Thailand plant's monthly capacity reached 6 million units in April 2026, with further ramp-up expected in 2H26, benefiting from demand from major customers' overseas factories.

  Weaknesses

  Not included in Goldman Sachs coverage and lacks a formal rating and target price.

  Comparison

  As an upstream drilling tool supplier, it can gain incremental demand alongside overseas PCB capacity expansion.

  Risks

  Demand from customers' overseas factories below expectations, capacity ramp-up, and pricing pressure.

Key data

• Survey period2026-07-07 to 2026-07-10Goldman Sachs organized a Thailand/Vietnam technology supply chain survey.
• Covered supply chain segmentsPCB, drilling tools, optical modules, FAU, ODMFocused on the AI server and networking supply chain.
• Thailand/Vietnam cost impactIf raw materials are transported from mainland China, tariffs and transportation costs could increase costs by 15%-20%Management also mentioned that customers can accept a premium of up to about 20% for overseas capacity costs.
• Labor efficiency comparisonThe productivity of one worker in mainland China can be as high as that of three workers in ThailandThe report notes that labor costs in Thailand and Vietnam are lower, but efficiency is also lower.
• DTech Thailand capacityMonthly capacity reached 6 million units in April 2026Management expects continued ramp-up in 2H26.
• Dynamic Thailand capital expenditureRmb3.3bnMainly used for new capacity at the P5 and P5A plants, targeting AI server- and optical transceiver-related AI PCBs.
• Delton Thailand investment planUS$80mAnnounced in April 2026 for its Thailand subsidiary to expand high-end PCB capacity.
• AI server forecast revision2026-2028E implied global AI chip shipment estimates for AI servers raised by 14%/22%/14%The report says this adjustment is consistent with its positive view on AI servers.
• U.S. CSP capital expenditure forecast revision2026E-2028E raised by 8%/27%/25%Reflecting continued strong AI capital spending by leading global CSPs.
• China CSP capital expenditure forecast revision2026E-2028E raised by 37%/44%/55%The report says expectations for China CSP capital spending were also revised upward.

Impact & implications

In terms of investment implications, overseas capacity expansion reinforces the long-term visibility of demand across the AI infrastructure supply chain, benefiting companies with capabilities in high-end PCB, AI server ODM, networking equipment, and automated manufacturing. At the same time, overseas factory efficiency, cross-border raw material logistics, customer validation progress, and cost pass-through ability will determine the pace at which different companies realize profits.

Risks

• If the AI capital spending cycle slows, utilization of new capacity in AI servers, AI PCBs, optical modules, and ODM may come under pressure.
• Production efficiency in Southeast Asia is lower than in mainland China; if automation and training progress are insufficient, cost advantages may be offset by efficiency losses.
• If raw materials such as CCL still need to be transported from mainland China, tariffs and transportation costs could raise costs by 15%-20% and compress margins.
• Overseas capacity expansion depends on validation by global customers, prepayments, or equipment subsidies; if customer timing changes, capacity contribution may be delayed.
• Geopolitics and supply chain diversification demand are among the drivers of expansion, but changes in policy and trade conditions may also alter the economics of regional布局.

What to watch

• Whether Victory Giant's A2 plant starts mass production on schedule in 3Q26.
• Whether WUS's Thailand plant can reach the company's utilization target in 1Q26 and the progress of validation by global data communications customers.
• The contribution of Avary's new Thailand capacity to server PCB, optical module PCB, and smart device PCB over the next few quarters.
• The progress of FII's AI infrastructure capacity expansion in Vietnam and the strength of customer demand.
• Whether margins at Dynamic's P5/P5A plants can recover after investment through scale, product mix, and efficiency improvements.
• Whether rising utilization at Delton's Thailand plant continues to support growth in high-end AI PCB.
• DTech Thailand plant's capacity ramp-up in 2H26 and demand for drill bits from major customers' overseas factories.
• Whether capital spending by global CSPs, NeoCloud, sovereign AI, and enterprise AI remains strong.