Is the increase in the price of circuit board raw materials CCL a crisis or an opportunity for PCBs?

Is the increase in the price of circuit board raw materials CCL a crisis or an opportunity for PCBs?

Strong 5G market demand

Drive the rise in the value of raw materials

     According to industry insiders, the global electronics industry has been very cautious in pulling goods this year. Last year's high-profile panel, memory, semiconductor silicon wafers and other key components have fallen in popularity this year, and prices have been callback. It is understood that the 5G infrastructure in mainland China has greatly promoted Netcom's demand for CCL, which has contributed to Shengyi's current price increase. This is also the first key part of the price increase of the electronics industry in the recent peak season.

     Copper foil substrates and copper clad laminates are the key raw materials of PCB board factories, and cannot be replaced by other materials at present, accounting for more than 30% of the production cost of PCB circuit boards. PCB is known as the "mother of industry" and has a very important position in the market. .

     On June 6, 2019, the Ministry of Industry and Information Technology issued 5G commercial licenses to the four major operators of China Telecom, China Mobile, China Unicom, and China Radio and Television, which marks China's first year of 5G commercial use. The arrival of the 5G era will definitely bring a huge "blue ocean" market to the consumer electronics industry, which means that the huge demand for copper foil substrates and copper clad laminates will be detonated.

It can be said that the rise of the 5G concept has driven the rise in the value of copper foil substrates and copper clad laminates, which in turn has driven up the prices of PCB factories. The price increase is closely related to the cost of PCB factories and the supply of raw materials, which has aroused great concern in the industry.

Environmental Storm

Lead to price increase of raw materials

    In recent years, people have paid more and more attention to environmental protection, so while demanding steady economic development, they also have more requirements for environmental protection construction. Building an "environmentally friendly" society has become an increasingly urgent need. The country has also adapted to the needs of the times and stepped up efforts to rectify environmental protection. In 2017, my country comprehensively strengthened the environmental protection restrictions on the manufacturing industry and conducted investigations, and nearly 100 enterprises were forced to suspend trading for rectification. The implementation of the "Environmental Protection Tax" in 2018 has increased the environmental protection costs of PCB manufacturers.

After a round of rectification, some PCB manufacturers who failed to meet the environmental protection requirements were forced to withdraw from the market, and those surviving manufacturers have higher requirements for environmental protection monitoring of raw materials on environmental protection issues. On the one hand, the increase in the cost of environmental protection costs has led to an increase in the cost of the upstream industry chain; on the other hand, some small and medium-sized PCB companies have been forced to withdraw from the PCB market due to unqualified environmental protection, which has caused the market supply and demand balance to be broken, resulting in a supply shortage. rise.

The implementation of the "Environmental Protection Tax" in 2018, the country legalizes environmental protection issues in the form of laws, and environmental protection monitoring of PCB manufacturers will also become a normalization, which also promotes the continuous growth of PCB manufacturers' material prices.

Forced screen prices

Conducive to healthy competition

    For companies, this round of price increases is not only caused by the industry, but also a strategy for companies to take the initiative. First, the price increase of raw materials is beyond the scope of the manufacturer's tolerance, and the manufacturer can only guarantee the quality of the product by means of price increase. Second, this will push the industry back to rational competition, and active price increases will be a good start. From this point of view, the increase in the price of raw materials can promote the PCB industry to stop the vicious competition of "low price" and move towards benign price competition. At the same time, it will also accelerate the industry's reshuffle, eliminate enterprises lacking innovation, promote the industry to upgrade its products, and take the innovative development route.

 Is this a crisis or an opportunity?

The impact of this price increase is good or bad, but in fact it is very common in unpredictable shopping malls, but today, with a sound supply system, it is inevitable that it will stir up thousands of waves. Regardless of the reason, the price increase of PCB boards driven by rising raw materials is determined by the market, and the only thing companies can do now is to play the cards in their hands and avoid any meat. No one will deny that this is a crisis, but is it actually an opportunity?

   ONESEINE TECHNOLOGY, since its establishment in 2008, has been focusing on positioning high-precision multilayer circuit boards and HDI circuit boards, express prototypes and mass production. Products are widely used in high-tech fields such as communications, medical, aerospace, industrial control, automotive electronics, computer peripheral products, and professional colleges. With strong strength, stable quality and fast delivery, it has been widely recognized by customers and the same industry, successfully established the "ONESEINE" brand, and became an excellent manufacturing enterprise for domestic and foreign PCB circuit board Allegro and multi-layer circuit board mass order production. The company has been selected as "Shenzhen High-tech Enterprise" and "National High-tech Enterprise"