Chips Grew 71%, Boards 22%, Materials 9%: Growth Narrows Down the Electronics Supply Chain

Growth narrows at each step down the electronics supply chain: 71% at chips, 42% at assembly, 22% at boards and 9% at materials in 2Q’26. The materials tier is now starting to catch up.

Global Economy

Factory prices are rising again in China. Producer prices rose 5.7% on a year in October, the fastest since June 2022, and prices of computers, communication and other electronic equipment rose 5.9%, a wider gain than September’s 5.8% (National Bureau of Statistics, 9 November). The global manufacturing PMI was 52.6 in October (S&P Global). South Korea’s exports rose 93.7% on a year in October to a record US$115.3 billion, and its semiconductor exports rose 259% to US$56.4 billion (Ministry of Trade, Industry and Resources). The expansion is narrow: capital goods and Asia’s chip exports are growing, and the consumer is not.

Electronic Equipment Growth

The 144 equipment makers in the Custer composite grew 20.9% on a year in 2Q’26 (3/12), on revenue of US$1,140.5 billion (header chart). That is the top of the funnel, and it grew slower than the chain as a whole, 32.5%. The units behind it are falling: PC shipments fell 21% on a year in the third quarter and tablets 23%, to 32 million (Omdia). Revenue rose while units fell.

Semiconductors

The 139 semiconductor companies grew 71.2% (3/12), from 51.7% in 1Q’26 and 27.1% in 4Q’25, the widest lead over the rest of the chain in the six quarters shown (Chart 2). Memory carries it: the 22 memory and storage companies grew 298.3% in 3Q’26 on revenue of US$171.7 billion, the first composite with the September quarter in. South Korea’s October chip exports, above, are the same rise seen from the customs side.

EMS and ODM Activity

The 61 manufacturing services and design companies grew 41.5% (3/12), little changed from 42.4% in 1Q’26. The October filings run faster: Wistron’s revenue rose 117.56% on a year to NT$402.61 billion and Wiwynn’s 80.94% to NT$165.13 billion, both on AI server demand (company filings, Taiwan Market Observation Post System). Hon Hai, which also builds consumer electronics, rose 45.73% to NT$1.31 trillion. The 75 component makers grew 27.3%.

Printed Circuit Boards

The 37 board makers grew 21.8% (3/12), and the boards and substrates tier, which adds chip substrates and glass, 16.0%. On the longer series of 35 fabricators, the 3/12 stood at 1.32 in 1Q’26 and the 12/12 at 1.26 (Chart 1). The 3/12 bottomed at 0.76 in 2Q’23 and has been above 1.00 since 2Q’24, eight quarters. The AI boards are the growth: Zhen Ding’s October revenue rose 39.99% on a year to a record NT$27.197 billion, after a September in which its server, optical module and substrate revenue more than tripled on a year (Zhen Ding monthly revenue reports).

Materials and PCB Process Equipment

The 50 electronic materials suppliers grew 8.7% (3/12), the slowest tier, and the 19 circuit board materials suppliers within them 18.9%, up from 10.7% in 1Q’26. The October figures now coming in run well above that. Nan Ya Plastics’ October revenue rose 64.6% on a year to NT$34.94 billion, its highest in nearly 55 months, with electronic materials more than 60% of sales (Nan Ya Plastics monthly revenue report). Nittobo will spend a further JPY20 billion to lift T-glass cloth capacity to 3.6 times its fiscal 2025 level by fiscal 2029, and raised its operating profit forecast to JPY34 billion from JPY30 billion (Nittobo, 6 November). The 70 process and test equipment makers grew 16.2%, and Taesung’s board equipment orders passed 220 billion won by September, 5.8 times its 2025 revenue (Taesung, 4 September).

Global Electronic Supply Chain Growth

All 571 companies grew 32.5% (3/12) in 2Q’26, from 9.8% in 1Q’25. In past cycles the swing grew wider at each step back from the end market. In this one the widest swing is at the chip, because it is price, and the bottom of the funnel has barely moved. The test is the materials tier in 3Q’26: if its 3/12 passes 20% while the equipment makers stay near 20%, the price rise has reached the whole chain. The third-quarter composites will be updated as filings complete. Contact Jon Custer for an update.

Sources

• Custer Contexo Group company database, company-reported quarterly revenue in US dollars at quarterly average exchange rates, matched samples; Business Outlook Electronics charts, 6 November 2026 (tier composites, 2Q’26; memory and storage, 3Q’26; circuit board composite to 1Q’26).
• National Bureau of Statistics of China, industrial producer prices, September 2026 (released 15 October) and October 2026 (released 9 November).
• S&P Global and J.P.Morgan, Global Manufacturing PMI, October 2026. Ministry of Trade, Industry and Resources (Korea), export figures for October 2026, 1 November.
• Omdia, PC shipments (9 October) and tablet shipments (5 November), third quarter 2026.
• Company monthly revenue filings for October 2026: Wistron, Wiwynn, Hon Hai, Zhen Ding, Nan Ya Plastics (Taiwan Market Observation Post System). Nittobo, results and capacity plan, 6 November 2026. Taesung, order statement, 4 September 2026.
• Custer’s World PCB Report 2026, Figure 21 (the circuit board composite from 2001).