PCB News - Full analysis of the PCB industry under the new supply-demand relationship

Full analysis of the PCB industry under the new supply-demand relationship
In the next few years, the output value of the global circuit board industry will continue to grow. By 2022, the output value of the global circuit board industry will reach 75.6 billion U.S. dollars.
The PCB industry has a fragmented competitive landscape, with the largest domestic real estate value and the fastest growth in China. Among the product categories, ordinary PCB profits are as thin as paper, and the profitability is not optimistic. Nowadays, overseas PCB leaders focus on the layout of high multi-layer boards, flexible circuit boards and rigid-flex boards, with a wide range of applications, high value, and great market potential.

Copper clad laminate is the most important raw material for PCB manufacturing, with strong bargaining power and high industry concentration (the top 5 suppliers have a market share of about 50.1%), and leading manufacturers have strong bargaining power.
Mainland China accounts for the highest proportion of CCL output in the world, but the added value of products is low, high-end products rely on imports, and the industrial structure is in the process of adjustment. Leading manufacturers are the first to achieve technological breakthroughs in high value-added products, which are expected to replace Europe, the United States, Japan and South Korea, and have great development opportunities.

The upstream copper foil has entered a price increase cycle, bringing new pricing opportunities for copper clad laminates and PCB companies.
Electrolytic copper foil is an important component of copper clad laminate (CCL) and PCB. The global and mainland China's electrolytic copper foil production capacity has not expanded in the past two years, but the capacity utilization rate has shown an increase year by year.

Electrolytic copper foil is also used as a current collector for lithium-ion battery anode materials. In recent years, the explosive growth of new energy vehicles has driven the demand for lithium battery copper foil market. Copper foil manufacturers have switched to lithium battery copper foil, diverting part of the standard copper foil production capacity. As a result, the supply of copper foil upstream of the PCB is tight, and the price continues to rise, which has been transmitted to the copper clad laminate and PCB links.

The rise in the price of copper foil has brought new pricing opportunities for CCL and PCB manufacturers. Leading copper clad laminate companies and high-end PCB suppliers will expand their profit margins during the process of cost transfer and gain performance flexibility. Historically, the price increase of copper foil has brought about an increase in the gross profit rate of copper clad laminate and PCB companies, and the stock prices of related companies have risen 3-5 times.

Industry demand is picking up and entering a new round of business cycle. The PCB downstream demand market in multiple sub-sectors has achieved double-digit annual growth rates, becoming a new growth driver for the PCB industry.
The trend of automotive electronics has driven the rapid development of the automotive PCB market. The automotive PCB market has a scale of 100 billion yuan, but the certification cycle is long and the threshold is high; new energy vehicles bring a market with tens of billions of incremental PCB demand; the small-pitch LED market is expanding rapidly, and more The demand for multi-layer PCB boards is strong; mobile communication technology is changing with each passing day, and the construction of high-density small base stations drives the demand for high-value-added PCBs; China's high-end server market is growing rapidly, and the required PCB value-added is increasing.
In recent years, PCB listed companies have continued to adjust their product structure in the downstream market, and their profitability has gradually improved. This situation will continue. Paying attention to the trend of environmental protection informatization and the development of various environmental protection technologies, PCB factories can start with big data to monitor the company's pollution discharge and governance results, and find and solve environmental pollution problems in a timely manner. Keep up with the production concept of the new era, continuously improve resource utilization, and realize green production. Efforts to make the PCB factory industry realize an efficient, economical and environmentally friendly production model, and actively respond to the country's environmental protection policy.