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Strong demand for AI servers continues to drive growth in high-end PCBs. The Taiwan Printed Circuit Association (TPCA) and the Industrial Technology & Information Technology Institute (ISTI) released their latest Q1 2026 Taiwan PCB production and sales survey report, indicating that thanks to continued strong demand for AI servers, shipments of high-end PCB products such as substrates, high-layer-count boards (HLC), and HDI have grown. In the first quarter of 2026, Taiwan's PCB manufacturing output reached NT$245.6 billion, a 19.6% increase year-on-year, setting a new record for the first quarter.
Continued demand for generative AI, model training, inference applications, and the construction of large data centers is driving investment in AI infrastructure, which in turn is fueling demand for servers, networking equipment, and high-end computing platforms. This trend is also pushing PCB products toward higher layer counts, higher material grades, and more complex manufacturing processes, further increasing the proportion of high-end products and optimizing manufacturers' product portfolios.
In the first quarter of 2026, the Taiwanese PCB application market was distributed mainly across communications (28.9%), computers (26.5%), semiconductors (14.6%), consumer electronics (13.8%), and automobiles (9.4%). Computer and semiconductor applications were the main drivers of this quarter's record output value. Computer applications benefited from continued expansion of AI infrastructure investment by cloud service providers and large data centers, driving sustained demand for high-end servers; personal computers were supported in the short term by expected component price increases, end-of-life demand tied to Windows 11 replacement, and new product launches. Semiconductor applications were driven by rising demand for AI and networking chips and memory, leading to upgrades in high-end substrate specifications and shipment growth; at the same time, tight supply of key materials such as high-end copper foil and high-end fiberglass cloth pushed up product prices, contributing to overall revenue performance. By contrast, communication applications were supported by satellite communications demand, though mobile phone demand was affected by rising memory prices, offsetting some of that growth momentum. Consumer electronics benefited from continued strong demand for AI smart glasses since the fourth quarter of last year, resulting in solid growth.
By PCB product category, multilayer boards (35.8%), HDI (22.8%), flexible boards (20.0%), and substrate boards (14.6%) were the main categories. Multilayer boards maintained steady growth, supported by demand from AI servers, high-speed networking, general-purpose servers, and memory modules. HDI showed standout growth, driven by AI servers, satellite communications, and AI smart glasses. Substrates maintained strong momentum alongside continued demand for AI, networking chips, and memory, while flexible boards were affected by weak demand from mobile phones and PCs; AI smart glasses have emerged as a new application worth watching going forward.
In the second quarter of 2026, AI servers will remain the core growth engine for Taiwan's PCB industry. Tight supply of key materials such as high-grade fiberglass cloth and high-grade copper foil will continue to drive up product prices, supporting continued growth in both volume and price. Taiwan's PCB production value is estimated to reach NT$256.1 billion in the second quarter of 2026, a year-on-year increase of 17.4%, with full-year production value expected to reach NT$1,053.2 billion, a year-on-year increase of 15.1%. However, the industry still needs to watch several external variables: AI-related applications continue to absorb high-grade materials, key components, and production capacity, which may pressure the supply and cost of consumer electronics products; rising memory prices may also suppress demand for PCs, mobile phones, and other end-user devices. In addition, geopolitical conflicts and increased global economic uncertainty will add further challenges to operations going forward.
In terms of production layout, in the first quarter of 2026 mainland China remained the primary production base for Taiwanese PCB manufacturers, accounting for 63.7%, followed by Taiwan at 32.3% and Southeast Asian production bases at 4.0%, mainly concentrated in Thailand, Vietnam, and Malaysia. Beyond multilayer boards and HDI, some high-end product lines such as satellite communications and servers are also gradually being manufactured in Southeast Asia, underscoring the region's growing importance in the global PCB supply chain restructuring. However, the region still faces challenges such as insufficient supply of mid-to-high-level technical personnel, an incomplete supply chain, and high logistics and operating costs, which will take time to overcome and optimize in the short to medium term.
Overall, AI applications are driving the PCB industry into a new phase of high-end development and value enhancement. Going forward, Taiwan's PCB industry must not only capture emerging demand such as AI servers, advanced packaging, networking, and smart terminals, but also strengthen its mastery of high-end materials, global capacity allocation, supply chain resilience, and risk management to navigate a rapidly changing international market and technological competition environment.
