Taiwan's PCB manufacturers are set to reach peak trial and mass production at their Thailand plant by 2025, driving the upstream supply chain to follow suit. In response to PCB customer demand, drill bit manufacturer Topoint (8021.TW) will begin operations at its Thailand facility next year, focusing initially on drilling services. The company aims to establish drill bit production capacity by 2026–2027, with its main competitors being Japanese firms specializing in high-end drill bits.

At its investor conference on the 24th, Topoint revealed that its Thailand plant will begin operations next year. Initially, drill bit production will be supported by its facilities in Taiwan and China. With ongoing negotiations regarding terms and delivery schedules, Topoint expects to stabilize its drilling service business. However, due to the plant's trial phase and fluctuating order volumes, initial production costs are anticipated to be higher than those in China, possibly exceeding double digits.

Topoint noted that Thailand currently lacks local drill bit manufacturers, and the demand for drilling services is urgent. The company plans to establish drill bit production capacity by 2026–2027.

Globally, Topoint ranks fourth in production capacity. The top two companies are Chinese, though their competitiveness in sub-0.2mm drill bits is limited, focusing on cost-efficiency. The third-largest competitor is a Japanese firm specializing in high-end drill bits with 30% greater capacity than Topoint. The company aims to align with its Japanese competitors by reducing customers' per-unit drilling costs.

Topoint's current utilization rate for drilling services stands at around 52%, surpassing the breakeven point but below the optimal 60–65% range. The company expects a gradual recovery in utilization rates, with potential improvements in 2025 if no major economic downturns occur.

In the first half of 2024, Topoint's drill bit revenue was distributed as follows: 36% from high-layer count (HLC) boards, 23% from IC substrates, 14% from HDI, 24% from traditional boards, and 3% from flexible boards. Compared to 2023, revenue from HLC and IC substrates increased significantly. HLC drill bit revenue surged by 9 percentage points, driven by demand for server motherboards and communication boards with more than 18 layers, which require precise drilling. As drill bits account for a small portion of the BOM, HLC customers are increasingly adopting high-end drill bits to reduce breakage rates. Coated drill bits now represent 30% of Topoint’s total drill bit sales.