Driven by sustained strong demand for AI servers, Taiwan’s PCB industry maintained solid operating momentum in the third quarter. According to the 2025 Q3 Taiwan PCB Production, Sales, and Operations Analysis jointly released by TPCA(Taiwan Printed Circuit Association) and ISTI (Industry, Science and Technology International Strategy ) of ITRI, Taiwan’s combined onshore and offshore PCB manufacturing output reached NT$243.5 billion in the third quarter of 2025, representing a year-on-year increase of 7.2%. Cumulative output for the first three quarters totaled NT$667.1 billion, up 11.3% year on year. This performance underscores the industry’s resilience, as growth continued despite relatively softer third-quarter smartphone demand following tariff-driven front-loaded shipments in the first half of the year, supported primarily by robust AI server–related demand.
The report highlights that the rapid expansion of generative AI applications has significantly boosted demand for high-end AI servers, emerging as the core growth driver for Taiwan’s PCB industry. Benefiting from continued volume ramp-up of advanced AI chips, shipments of ABF and BT substrates delivered strong performance. At the same time, demand for high-layer-count multilayer boards (HLC) and HDI boards rose in tandem with AI server and high-speed networking equipment deployments. In contrast, flexible printed circuits (FPC) and rigid-flex boards—more closely tied to smartphone and automotive markets—experienced relatively slower growth in the third quarter.
From an application perspective, the computer segment recorded year-on-year growth of 25.2% in the third quarter, while the semiconductor application segment grew 14.2%, making them the two primary growth engines for the period. In the computer segment, AI servers remained the key shipment driver, while the PC market also benefited from the Windows 11 upgrade cycle and the emergence of AI PCs, spurring replacement demand and driving notable revenue expansion. In the semiconductor segment, stronger-than-expected ABF substrate demand, coupled with a dual upcycle in memory supply and pricing, further supported BT substrate shipments.
By contrast, the communications application segment declined 7.0% year on year in the third quarter. Although global smartphone shipments continued to post modest growth, tariff-related factors led to accelerated PCB shipments earlier in the year, resulting in weaker momentum in the third quarter. The automotive application segment fell 4.3% year on year, primarily due to Chinese electric vehicle brands accelerating localization of supply chains and Chinese PCB manufacturers aggressively expanding into the internal combustion engine vehicle market, creating substitution effects on Taiwan’s automotive PCB orders.
By product category, high-growth segments in the third quarter included multilayer boards, up 20.1% year on year; substrates, up 14.2%; and HDI boards, up 8%. Multilayer boards benefited from continued demand from AI servers, networking equipment, and PCs. In the substrate segment, ABF substrates were supported by strong demand for advanced AI chips, while BT substrates benefited from the memory market entering a “supercycle” characterized by simultaneous recovery in supply and pricing, making substrates a key growth pillar of the PCB industry this quarter. HDI boards maintained growth momentum, although part of the upside was offset by weaker smartphone and automotive demand. Meanwhile, flexible boards and rigid-flex boards posted year-on-year declines of 10.9% and 14.9%, respectively, reflecting both the high comparison base from front-loaded smartphone shipments earlier in the year and their limited exposure to AI-related applications, resulting in constrained short-term growth drivers.
Notably, tight supply of advanced materials has become a critical variable shaping industry dynamics. As AI server platforms evolve rapidly, demand for low-CTE fiberglass cloth and HVLP high-frequency, high-speed copper foil has surged. However, capacity expansion on the supply side has been limited, creating structural supply gaps. The report indicates that the supply-demand imbalance for low-CTE fiberglass cloth is likely to persist until around 2027, while HVLP4 copper foil faces medium-term supply risks due to the introduction of next-generation AI server specifications, emerging as a key bottleneck for the industry.
In response to tightening raw material supply, PCB and materials suppliers are pursuing dual strategies of strengthening local supply chain integration and expanding global footprints. Through price adjustments, strategic alliances, and overseas capacity expansion, industry players are enhancing supply resilience. Substrate, copper-clad laminate (CCL), and copper foil manufacturers are all actively reinforcing production lines in Taiwan and stabilizing supplies of critical materials. Industry competition is gradually shifting from a focus on capacity scale to capabilities in securing key materials and managing supply chains. Companies with long-term material supply assurance and stronger pricing power are expected to be better positioned to sustain profitability.
Looking ahead to the fourth quarter, the report expects AI server demand to remain robust, extending the strong momentum seen in the first three quarters. Combined with pricing effects stemming from tight supplies of high-end materials, Taiwan’s PCB industry is poised to see simultaneous volume and price growth. While external uncertainties such as exchange rate fluctuations and tariff negotiations warrant continued attention, the overall outlook remains positive. Total combined onshore and offshore PCB manufacturing output in Taiwan is projected to reach NT$240.1 billion in the fourth quarter of 2025, up 10.4% year on year. Full-year output is forecast at NT$907.2 billion, representing annual growth of 11.1%, signaling that Taiwan’s PCB industry is steadily advancing onto a new AI-driven growth trajectory.