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Recently, a number of copper clad laminate plants announced price increases. Kingboard issued two price increase notices in succession, and Weilibang Electronics also issued a notice on adjusting the price of copper clad laminate products on the 26th of this month. Since the 26th, the sales price of all copper clad laminate products has been increased by 6 yuan per piece, Shandong Jinbao Electronics 8 A notice of price increase was issued on 29th, CEM-1/22F will increase the price by 10 yuan/piece. Before this wave of plate manufacturers' price increases, a group of upstream companies of plate manufacturers have successively issued price increases notices.
Copper Clad Laminate (CCL), also known as Copper Clad Laminate, is a basic material in the electronics industry. It is mainly used for the processing and manufacturing of printed circuit boards (PCB) and is an important material for PCBs. Copper clad laminates are used in computer, communication equipment, consumer electronics, automotive electronics and other industries through PCB.
PCB is called the "mother of electronic products". It is a printed board that forms connections between points and printed components on various types of copper clad boards according to predetermined designs. It mainly connects various electronic components to predetermined circuits. Most electronic devices must be equipped with PCBs to realize multiple functions such as electronic device power supply, digital and analog signal transmission, radio frequency and microwave signal transmission and reception.
The CCL industry originated in the 1940s. During the 80-year development process, major manufacturers have accumulated advantages in technology, capital and customer resources, gradually establishing industry entry barriers, and increasing industry concentration. According to the data of the Prospective Industry Research Institute, CCL accounts for 30% of the PCB cost structure. As the main raw material for PCB manufacturing, the demand for CCL will be driven by the downstream PCB market.
The upstream of the PCB industry chain includes copper foil, copper balls, copper clad laminates, prepregs, gold salts and inks, and the overall material cost accounts for close to 60%. The entire industrial chain can be simplified as copper foil-copper clad laminate-PCB-application.
The nature of the industry is both cyclical and growth-oriented. The cyclicality is reflected in the burst of new demand, which will drive basic materials to complete a cycle of "high-speed growth-market peak-demand reduction". Growth is reflected in the impact of new demand Demand for niche special materials will push up the value level of the entire market, thereby increasing the output value of the entire market.
Among the upstream materials, copper clad laminates are mainly responsible for the three major functions of PCB board conduction, insulation, and support. Its performance directly determines the performance of the PCB. It is the key basic material for PCB production, accounting for 20%-40% of the direct material.
The copper clad laminate is made of copper foil, epoxy resin and glass fiber cloth. The copper foil accounts for more than 30% (thick board) and 50% (thin board) of the cost of the copper clad laminate.
The copper foil and copper clad laminate industries are highly concentrated, with CR10 companies having a market share of more than 70% and higher pricing power.
According to Prismark statistics, the world's top 6 copper clad laminate manufacturers, Kingboard Chemical, Shengyi Technology, Nanya Plastics, Panasonic Electric Works, Taiguang Electronics and Lianmao Electronics, have a market share of more than 50%, and the top 10 copper clad laminate manufacturers account for 73.5%. In contrast, according to the statistics of N.T.Information, the world's top five PCB manufacturers have a market share of only 20.84%, and the world's top ten PCB manufacturers have a market share of 32.21%.
The overall PCB industry has a low degree of concentration. The world's number one PCB company has a market share of only 6%, and downstream applications are even more extensive. It can be seen that the concentration of the industrial chain decreases sequentially from top to bottom.
PCB downstream applications are scattered, the demand for copper clad laminates is inelastic to price, and the price increase of copper clad laminate is greater than that of copper foil.
The cost of copper clad laminates is dispersed in copper foil, epoxy resin, fiberglass cloth and labor costs. Generally, raw materials will not increase in price at the same time, but the shortage of raw materials will limit the capacity utilization of copper clad laminate manufacturers and cause the price of copper clad laminates. In addition, leading copper clad laminate companies have the ability to actively stock up on the price expectations of various materials, and adjust their inventory portfolio to hedge against the risk of raw material price increases.
According to data from China Industry Information Network, it is predicted that there will be USD 5.44 billion of PCB market space in the field of new energy vehicles in 2022, which is nearly 14 times and 3 times that of luxury cars and non-luxury cars, respectively. From 2006 to 2018, China's new energy vehicle production increased from 4,047 units to nearly 1.22 million units at a CAGR of 60.9%. With the trend of electrification, intelligence and connectivity of automobiles, the automotive electronics market will maintain a long-term growth trend, driving the demand for PCB, which will lead to the increase in the demand for PCB upstream raw material CCL.
High frequency and high speed CCL is one of the core materials of high frequency and high speed PCB. High-frequency and high-speed PCB made of high-frequency and high-speed CCL as a basic material are widely used in communication electronics, consumer electronics, computers, automotive electronics, industrial control, medical equipment, national defense, aerospace and other fields. Among them, high-frequency copper clad laminates are obviously used in 5G antenna systems and automotive electronics ADAS systems, and high-speed copper clad laminates are more commonly used in cloud server IDCs and high-end routers.
With the development of 5G, copper clad laminates used in the communications field will also undergo significant changes. In the communication field, the main components involved in PCB and copper clad laminates are communication equipment including base station equipment (antenna system AAU and baseband unit DU+CU) of the access network, transmission equipment of the bearer network and equipment of the core network.
The physical form of the baseband unit DU+CU in the 5G base station equipment, the transmission equipment in the bearer network, and the core network equipment are relatively similar. They are mainly composed of plug-in boards, including single boards (service processing boards and main control transmission boards) and backplanes ( Used to conduct electrical signals between each single board) of these two types, the growth logic of the copper clad laminates used is mainly that 5G requires higher capacity and higher transmission speed, so that high-speed copper clad laminates with lower loss will be replaced The value of some ordinary copper clad laminates has been increased.
In terms of servers, shipment growth is expected to increase and platform evolution will enable CCL materials to evolve at a high speed. IFC predicts that the demand for 5G and server CCL will increase by 33% from 19 to 23 years. Among them, ordinary, high-speed, and high-frequency CCL will increase by 15%, 37%, and 38%, respectively. High-frequency and high-speed CCL can expect high growth.
According to CCID Consulting, the number of domestic base stations in China will be 1.1 to 1.5 times that of 4G base stations, and the number of global and domestic 5G base stations will reach 10.55 million and 5.98 million. The area of AAU materials will be doubled (from 0.15 square meters of 4G to 0.32 square meters), the CCL materials used will use higher value materials, and the CCL market space will be further opened.
According to Prismark's data, in the next 5 years, the amount of CCL boards is expected to be concentrated in the subdivision areas, mainly focusing on the release of 5G construction demand to promote the rapid development of high-frequency copper clad laminates; IDC replacement brought about by the cloud computing industry reform, accelerating The replacement demand for high-speed copper clad laminates is released; under the promotion of policies and industries, the large-scale production of new energy vehicles has promoted the recovery of demand for automotive electronic boards. This will eventually lead to a concentrated release of demand for high-speed copper clad laminates (improved FR-4) and high-frequency copper clad laminates (mainstream including hydrocarbon and PTFE substrates).
