An indispensable material for PC, with an expected domestic market size of over 7.2 billion in 2022

An indispensable material for PC, with an expected domestic market size of over 7.2 billion in 2022

PI film has superior performance and a wide range of downstream applications. The product forms of polyimide include film, foam, fiber, photosensitive polyimide and polyimide based composites, among which PI film accounts for more than 70%, which is the most important product form of polyimide industry. The manufacturing of PI film requires production processes such as resin polymerization, casting, directional stretching and amination, and post-treatment. The product has excellent characteristics such as high heat resistance, strong mechanical properties, low dielectric constant, and low coefficient of expansion, and is known as the "golden film". It is widely used downstream in high-tech industries such as consumer electronics, high-speed rail, wind power, aerospace, and flexible displays.

Foreign giants dominate the market mainstream, while domestic production capacity gradually follows that of domestic PI films, which started relatively late. There are gaps in production capacity, process, technology, and other aspects compared to foreign giants. Due to the fact that advanced production technologies are mostly mastered by countries such as the United States, Japan, and South Korea, China mainly produces low-end electrical PI films, while high-end products still rely on imports. In recent years, with the continuous accumulation of domestic technology and capital, multiple new material enterprises have successively put PI films into production, and domestic production capacity has gradually expanded.

From a global market perspective, American, Japanese, and Korean companies, including DuPont in the United States, Zhongyuan Chemical Industry Co., Ltd. in Japan, Dongli Co., Ltd. in Japan, Ube Xingchan Co., Ltd. in Japan, and SKC Kolon PI in South Korea, account for nearly 80% of the industry's production capacity. In recent years, domestic professional manufacturers have accelerated their development, and domestically produced PI films have gradually achieved import substitution. Among them, Shenzhen Ruihuatai Film Technology Co., Ltd.'s product sales account for about 6% of the global market, marking the official entry of domestic PI film manufacturers into the global competition.

The domestic market size is expected to reach 7.24 billion yuan, with broad import substitution space. The global PI film market has a compound growth rate of nearly 8% from 2017 to 2020. By the end of 2019, the global PI film market size reached 1.8 billion US dollars, an increase of 11.1% compared to the previous year, and reached 2.05 billion US dollars in 2020. At present, in the downstream application fields of PI thin films worldwide, flexible circuit board FPC accounts for the largest proportion, about 48%, followed by special products including aerospace materials and flexible display materials accounting for about 29%, and other application fields accounting for 23%.

The growth of flexible circuit board (FPC) production value promotes the continuous expansion of the electronic grade PI film market: Flexible copper clad laminate (FCCL) is an important substrate for manufacturing flexible circuit board (FPC), which has become an important component of electronic product equipment due to its lightweight and flexibility. The global FCCL market size increased from 2.64 billion US dollars in 2014 to 4.48 billion US dollars in 2019. As the main raw material of FCCL, the demand for electronic grade PI films increased synchronously with FCCL. In 2019, the global demand for PI films in the FCCL industry reached 14877.5 tons, while the domestic demand was 4869.0 tons, with a growth rate of 8%. From the perspective of FPC output value, from 2014 to 2020, the domestic FPC output value increased from 29.07 billion yuan to 52.6 billion yuan, with a compound growth rate of 10.4%. In recent years, the growth rate of FPC demand has slowed down, but the development of downstream new electronic products will inject new growth momentum into the FPC industry. It is expected that the FPC output value can increase to 54.44 billion yuan in 2021, thereby promoting the continuous expansion of the electronic grade PI film market.

The rapid development of commercial aerospace and flexible screens has driven the continuous growth of the special grade PI film market. In the aerospace field, PI films are used as rocket protective materials due to their excellent weather and radiation resistance. Since 2015, thanks to policy support and the development of private enterprises, the number of domestic launch vehicles has gradually increased, and launch revenue has grown rapidly. In 2019, the market size of the entire commercial aerospace industry chain exceeded 800 billion yuan, with a compound growth rate of 22.1%. Due to the fact that the raw material cost of a single launch vehicle can account for 35% of the total cost, the localization of raw materials is bound to significantly reduce manufacturing costs, thereby promoting the growth of special grade PI films. In the field of flexible screens, flexible CPI film is the screen cover material used by most foldable mobile phone manufacturers. With the continuous commercialization of flexible displays, foldable phones have gradually become a new form of mobile phones. According to relevant predictions, the global shipment of foldable phones will reach 45.3 million units in 2024, and the domestic shipment will reach 13.2 million units. As the core component of foldable phones, flexible cover plates will drive the continuous growth of special grade PI films.

The trend of consumer electronics is rapid, and thermal conductivity grade PI films are facing greater demand space. Thermal conductivity grade PI films are downstream products mainly used in LED substrates, electronic component heat dissipation, and other fields. They are currently the mainstream heat dissipation material used in the consumer electronics industry. In recent years, the domestic market size of thermal conductive interface materials has gradually expanded, from 660 million yuan in 2014 to 1.27 billion yuan in 2020, with a composite growth rate of 9.9%. With the arrival of the 5G era, the domestic shipment of 5G mobile phones has rapidly increased from 12.982 million units in Q4 2019 to 55.096 million units in Q4 2020. The driving force of 5G technology will bring greater demand space for thermal conductivity grade PI films.

The market for wind power and high-speed rail industries is steadily rising, and the scale of the electrical grade PI film industry is continuously expanding. Electrical grade PI films are mainly used in high-grade insulation systems such as variable frequency motors and generators, and ultimately applied in fields such as wind power generation and high-speed rail transit. In the wind power industry, China is the world's largest wind power development market. As of the end of 2020, the cumulative installed capacity of domestic wind power reached 282GW, a year-on-year increase of 34.3%, accounting for 36% of the global cumulative installed capacity. Against the backdrop of advocating new energy, with the localization of the wind power industry chain, electrical PI films will have a broader market prospect. In the high-speed rail transit industry, China's high-speed rail operation mileage ranks first globally, accounting for over 60%. As of the end of 2019, the domestic high-speed rail operation mileage reached 35000 kilometers, and the number of high-speed train locomotives reached 29000. It is expected that by 2020, the domestic high-speed rail mileage will reach 37000 kilometers, and the market size of electrical PI film will continue to expand.

According to the global and domestic downstream industry growth rate calculations, it is expected that by 2022, the total size of the global PI film market will reach 2.45 billion US dollars, and the total size of the domestic PI film market will reach 7.24 billion yuan, including 2.63 billion yuan for electronic grade PI films, 2.69 billion yuan for special grade PI films, 950 million yuan for thermal conductivity grade PI films, and 970 million yuan for electrical grade PI films.