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Driven by continued strong demand for AI servers, Taiwan's PCB industry maintained its operating momentum in the third quarter. According to the latest "2025 Q3 Taiwan PCB Production and Sales Survey and Operation Report Analysis" released by TPCA and ITRI's Industrial Technology and Research Institute, the total domestic and international output value of Taiwan's PCB manufacturing industry reached NT$243.5 billion in the third quarter of 2025, a year-on-year increase of 7.2%; the cumulative domestic and international output value for the first three quarters reached NT$667.1 billion, a year-on-year increase of 11.3%. This shows that even though the smartphone market saw early ordering due to tariff issues in the first half of the year and relatively weaker demand in the third quarter, the overall Taiwanese PCB industry still maintained steady growth supported by demand for AI servers and related products.
The report points out that the rapid expansion of generative AI applications has boosted demand for high-end AI servers, becoming a core driver of Taiwan's PCB production value growth. Benefiting from the continued mass production of high-end AI chips, ABF and BT substrates have shown strong shipment performance, while high-layer multilayer (HLC) and HDI boards have also seen increased demand along with AI servers and high-speed switches. In contrast, flexible printed circuit boards (FPCBs) and rigid-flex PCBs, which are highly interconnected with the mobile phone and automotive markets, experienced a relatively slower performance in the third quarter.
Looking at the Taiwan PCB application market, the computer application market grew by 25.2% year-on-year in the third quarter, while the semiconductor application market grew by 14.2% year-on-year, making them the two major growth drivers for this quarter. In the computer application sector, in addition to AI servers being the main shipment item for manufacturers, personal computers also benefited from the Windows 11 upgrade and the replacement cycle driven by AI PCs, leading to a significant expansion in related revenue. In the semiconductor application market, the demand for ABF substrates was better than expected, and the memory market entered a dual growth cycle with both supply and prices recovering, boosting the shipment performance of BT substrates.
In contrast, the communications applications market declined by 7.0% year-on-year in the third quarter. Although global smartphone shipments maintained moderate growth, the momentum slowed in the third quarter due to tariff factors, as many related PCB orders had already been shipped in the first half of the year. The automotive applications market declined by 4.3% year-on-year, mainly due to the accelerated adoption of local supply chains by Chinese electric vehicle brands and the aggressive expansion of Chinese PCB manufacturers into the gasoline vehicle market, which crowded out orders for Taiwanese automotive PCBs.
Analyzing by product category, high-growth sectors in Q3 included "multilayer boards" (up 20.1% year-on-year), "carrier boards" (up 14.2% year-on-year), and "HDI" (up 8%). Multilayer boards benefited from continued demand from AI servers, switches, and PCs. In the carrier board sector, ABF carrier boards benefited from strong demand for high-end AI chips, while BT carrier boards saw growth driven by a supercycle of simultaneous increases in supply and prices in the memory market, becoming the main driver of PCB industry growth this quarter. While HDI boards maintained growth, some of this momentum was offset by weak demand from mobile phones and automotive applications. As for "flexible boards" and "rigid-flex boards," their production value decreased by 10.9% and 14.9% year-on-year, respectively. This was mainly due to the high base effect created by early ordering in the first half of the year for mobile phones, coupled with limited connections between their applications and AI-related fields, and a lack of emerging applications, thus limiting short-term growth momentum.
It is worth noting that the tight supply of high-end materials has become a significant variable affecting the industrial structure. With the rapid advancement of AI server generations, the demand for Low CTE fiberglass cloth and HVLP high-frequency, high-speed copper foil has surged. However, the capacity expansion on the supply side is limited, leading to a structural gap in the materials market. The report indicates that the supply-demand imbalance of Low CTE fiberglass cloth may continue until around 2027, while HVLP4 copper foil also faces medium-term supply risks due to the introduction of new-generation AI server specifications, becoming a key bottleneck for the industry's future development.
Faced with tight raw material supplies, PCB and material manufacturers have initiated responses by connecting local supply chains and expanding their global footprint, enhancing supply resilience through price adjustments, strategic alliances, and overseas factory expansion. Substrate, CCL, and copper foil manufacturers are all actively strengthening the stability of their production lines in Taiwan and the supply of key materials. The key to industry competition is gradually shifting from "production capacity" to "control over key materials and supply chain management capabilities." Companies with long-term material supply guarantees and bargaining power will be better positioned to maintain profitability.
Looking ahead to the fourth quarter, the report anticipates that demand for AI servers will continue the strong momentum of the first three quarters. Coupled with the price effect caused by tight supply of high-end materials, Taiwan's PCB supply chain is expected to show a growth pattern of both increased volume and price. Although external uncertainties such as exchange rate fluctuations and tariff negotiations still need to be monitored, the overall outlook remains positive. It is estimated that the total domestic and international output value of Taiwan's PCB manufacturing will reach NT$240.1 billion in the fourth quarter of 2025, an increase of 10.4% year-on-year; the total output value for the whole year is expected to reach NT$907.2 billion, an increase of 11.1% year-on-year, indicating that Taiwan's PCB industry is steadily embarking on a new growth trajectory driven by AI.
