AI computing demand is driving an upswing in the Asian PCB, CCL, substrate, and testing equipment cycle

Overview

This is a J.P. Morgan Asia Pacific equity research report covering the Asian PCB, copper-clad laminate, IC substrate, testing equipment, and passive components supply chain. The title emphasizes that AI is driving growth in the total addressable market for HPC CCL/PCB, and the discussion extends to LEO-related CCL/PCB, CoWoS packaging substrates, IC testing, Chroma's data center power testing, and passive components.

Core views

The core view is that AI data centers and HPC server upgrades are increasing unit content value and technical barriers across the electronic hardware supply chain. HPC CCL/PCB is supported not only by conventional server growth but also by LEO-related demand; IC substrates are facing size migration and unprecedented supply tightness; and testing equipment is being driven by longer test times, higher power consumption, and more complex data center power architectures.

Analysis framework

The report uses a segmented supply-chain analysis, breaking AI computing expansion into PCB/CCL, substrates, IC testing, data center power testing, and passive components, and assessing the beneficiaries through peer valuation, coverage universe, product categories, and supply-demand judgments.

Methodology notes

• Supply chain analysisAI hardware content value expansion framework

  AI servers drive higher per-unit content value in PCB/CCL, substrates, and testing

  The report treats AI/HPC server upgrades as the demand source and evaluates their impact on content value, ASP, and TAM across materials, packaging, testing, and power testing.

• Supply-demand analysisTight supply assessment

  Supply may lag demand

  Both the HPC CCL/PCB and IC substrate sections describe tight supply, suggesting that demand growth may outpace capacity expansion.

• Peer comparisonPeer valuation

  Peer valuation comparison

  The report uses a peer valuation framework in the PCB/CCL, substrate, and passive components sections to compare market pricing and expectations for relevant companies.

Asset mapping & comparison

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

• HPC CCL/PCB

  The material and board-level beneficiary of AI server and HPC platform upgrades

  Strengths

  Content value growth is clear, and the report highlights a significant increase over the foreseeable period while also pointing to strong demand from conventional servers and LEO.

  Weaknesses

  It is affected by capacity expansion, customer qualification cycles, and raw material costs.

  Comparison

  Compared with traditional PCB, HPC CCL/PCB depends more on high-frequency, high-speed materials and high-layer-count board capabilities.

  Risks

  If AI server shipments fall short of expectations or supply expands rapidly, cycle strength and pricing leverage may weaken.

• IC substrate

  A beneficiary tied to advanced packaging and CoWoS size migration

  Strengths

  Size migration increases unit value and technical barriers, and the report says supply has entered an unprecedentedly tight state.

  Weaknesses

  Capacity build-out requires heavy capital expenditure, and yield and customer qualification requirements are stringent.

  Comparison

  Compared with ordinary packaging materials, advanced substrates are closer to the bottleneck in high-end AI chip packaging.

  Risks

  Changes in the advanced packaging route, customer concentration, and the pace of new capacity release are key risks.

• Testing equipment

  Higher AI chip complexity is driving longer test times and greater power testing demand

  Strengths

  IC testing benefits from longer test times and higher TDP, and Chroma has a comprehensive product portfolio in AI data center power testing.

  Weaknesses

  Equipment demand may be project-based and subject to capital expenditure cycles.

  Comparison

  Compared with general semiconductor testing, data center power testing is closer to AI rack and power architecture upgrades.

  Risks

  Delayed customer capex, intensifying competition, or technology shifts could affect orders.

• Passive components

  Supporting components for AI server and electronic system upgrades

  Strengths

  The report covers peers such as YAGEO, Murata, Taiyo Yuden, and Samsung Electro, which helps observe valuation and demand transmission.

  Weaknesses

  Passive components are usually more exposed to inventory cycles and price competition.

  Comparison

  Compared with PCB/substrates and testing equipment, the incremental AI upside for passive components may be more dispersed.

  Risks

  A weaker-than-expected recovery in consumer electronics, inventory adjustments, and price pressure could weigh on sector performance.

Key data

• Report date2026-04-10The cover page shows Asia Pacific Equity Research April 2026, and the document date is 2026-04-10.
• Covering analystJerry Tsai ACThe analyst is from J.P. Morgan Securities (Taiwan) Limited.
• Chroma growth themeSLT, Metrology, and Datacenter Power Testing are all 40%+ CAGRThe chart title shows that Chroma-related businesses are all growing at 40%+ CAGR.
• Price reference date2026-04-09The valuation chart note states that the stock price is as of April 9.
• Coverage examplesChroma ATE, Advantest, Teradyne, Keysight, Delta Elec, YAGEO, Murata, Taiyo Yuden, Samsung ElectroThe report notes that these companies are covered or estimated using J.P. Morgan or Bloomberg consensus estimates.

Impact & implications

The investment implication is that the transmission of AI infrastructure capital expenditure does not stop at GPUs or complete servers, but extends upstream into advanced materials, advanced packaging substrates, ATE/power testing equipment, and passive components. If supply tightness persists, suppliers with high-end capacity, technical certification, and customer lock-in may enjoy stronger pricing power and earnings leverage.

Risks

• AI server, HPC, and data center capital expenditures fall short of expectations.
• New supply in HPC CCL/PCB or IC substrates is released faster than demand, weakening the tight-supply thesis.
• Changes in advanced packaging, server architecture, or power architecture routes cause some supply-chain segments to benefit less than expected.
• Raw material prices, exchange rates, and customer qualification progress may affect earnings realization.
• The report includes multiple companies and cross-market comparisons, so any single-stock investment conclusion should be combined with company-specific reports and disclosure documents.

What to watch

• AI server and HPC shipment cadence.
• HPC CCL/PCB capacity expansion, order visibility, and pricing trends.
• CoWoS and advanced packaging substrate size migration, supply-demand gaps, and yield changes.
• Chroma's order and revenue growth in SLT, Metrology, and data center power testing.
• Passive components inventory cycles, price trends, and valuation changes at major manufacturers.