Electrolytic copper foil - CCL - Is the PCB market coming?

Electrolytic copper foil - CCL - Is the PCB market coming?

On June 6, 2019, the 5G commercial license was officially issued, and China officially entered the 5G commercial year. It is expected to enter the scale construction cycle in 2020, which will form a certain pull on the upper, middle and lower reaches of the copper industry chain.

PCB is one of the beneficiaries, and the industrial chain dominated by upstream copper foil (electrolytic copper foil) - mid-stream copper clad (CCL) - downstream printed circuit board PCB has also been driven by the communications industry.

Among them, copper foil is the most important raw material needed for the production of copper clad laminates. The copper foil used here is generally electrolytic copper foil, which accounts for about 30% (thick plate) and 50% (thin plate) of the cost of copper clad laminate. Copper foil is used here as conductive. The body is used for conduction and heat dissipation.

CCL, which is in the middle of the industry chain, is the core substrate for the production of printed circuit board PCBs, accounting for 20% to 40% of the total PCB production cost. It has three functions of conduction, insulation and support.

printed circuit board PCB is used in many terminal fields, of which communication field accounts for the largest proportion. Therefore, with the construction of 5G base station, the demand for CCL and high-frequency substrate will increase greatly, and the communication frequency is high and the range of variation is large. Among them, the PCB substrate is still dominated by high frequency copper clad laminates.

It is estimated that by 2024, the annual investment of China's 5G base station will exceed 100 billion, and the number of 5G macro base stations will reach one million per year. And with the deep deployment of 5G networks, the increase of user penetration rate and the increase of connection requirements such as bandwidth brought by the development of 5G services, the demand for 5G small base stations will gradually increase, which will drive the development of the entire copper-related industrial chain.

Combined with the scale of the PCB terminal market, compared with the 4G period, the market scale of PCB in the global 5G is as high as 116.5 billion, 5.5 times that of the 4G period, and the single-year market size of PCB in the domestic 5G construction peak is 16.1 billion yuan. .

In addition to the communications industry, the consumer electronics sector, automotive electronics, industrial control medical sector will drive the consumption prospects of copper foil, copper clad laminates and PCB to a certain extent.

Among them, in the field of consumer electronics, PCB is mainly used in home appliances, drones, VR equipment and other products.

In the field of automotive electronics, PCBs are mainly used in GPS navigation, car audio, car dashboards, automotive sensors and other equipment.

Therefore, under the joint driving of these terminal fields, PCB has a relatively broad market prospect.

According to Pacific Securities data, the overall revenue of listed companies in China's PCB industry increased by 22.0% year-on-year to 67.465 billion yuan. In the first quarter of 2019, revenue increased by 19.2% year-on-year to reach 16.431 billion yuan.

In terms of profit, the industry's 2018 net profit increased by 41.3% year-on-year to 5.859 billion yuan, and net profit in the first quarter of 2019 increased by 42.9% year-on-year to 1.305 billion yuan.

And in the recent period, considering the low tide of subsidies for new energy vehicles, the demand for lithium battery copper foil, an important component of lithium batteries, has been affected accordingly. Therefore, in order to avoid the impact of guaranteed profits, some manufacturers have switched from lithium copper foil to electrolysis. Copper foil, so in the short term will also have a certain positive demand for electrolytic copper foil.

In addition to rising demand, the trend of domestic product substitution and foreign CCL production capacity shifting to the domestic market has brought the domestic CCL industry a new round of upward cycle.

At present, China's CCL production has accounted for 70% of the world's total, and downstream PCB production value accounts for nearly 50% of the world.

However, it should be noted that at present, due to the fact that the consumption of the entire copper terminal field is basically weak in 2019, the consumption of the copper foil-clad-plate-PCB industry chain has also been affected to some extent. According to SMM research, In order to maintain production and ensure sales volume, copper foil enterprises will not increase their processing fees, so it is difficult to form a favorable market for the PCB in the near future.

However, 5G is the main driving force of the communication industry in the next few years. The scale of 5G base stations is also imperative. Therefore, the demand for copper clad laminates and upstream electrolytic copper foils is still not to be underestimated, which deserves market attention.