CICC recently released a research report saying that during the resumption of 2016-2017, the price of upstream raw materials will increase and downstream demand will recover, and copper clad laminates will usher in a boom in price increases.
The economy has recovered after the epidemic, and CCL will enter a new cycle of price increases from 2020 to 2021. At present, the CCL industry has entered a new round of economic price increase cycle. In addition to the increase in raw material prices, downstream demand is also very strong following the economic recovery after the epidemic. At the manufacturer level, various copper clad laminate and PCB manufacturers have full orders in the fourth quarter, and the delivery cycle is shortening. In the long term, some PCB manufacturers will open new high-end product production capacity in 2021, and the downstream boom is expected to continue. At the same time, the gross profit margin of some copper clad laminate manufacturers declined in the third and fourth quarters of 2020, mainly due to the time lag between the price increase of upstream raw materials and the price increase of their own products, which caused a mismatch in revenue and cost. It is expected that with the completion of the price adjustment of CCL products in 2021, the profit margin is expected Restore the previous level.
It is reported that the main raw materials of copper clad laminates include copper foil, resin and fiberglass cloth; among them, copper foil has the highest cost, reaching 30%; however, under inflation expectations, the prices of commodities such as copper and oil have risen sharply, superimposing the demand for new energy. Copper foil processing fees have risen, and the prices of copper foil, glass cloth, and resin have begun to rise sharply. Among them, copper foil processing fees have increased by more than 50% compared with the first half of the year, and the prices of glass cloth and resin products have also risen sharply.
Combining the reports of various brokerage firms, the downstream end of the car, consumer electronics, and small household appliances have all recovered significantly; at the same time, the proportion of millimeter wave small stations in the later stage of 5G construction is expected to further increase, which is expected to stimulate the demand for high-frequency and high-speed materials.
In addition, downstream end products use more and more copper clad laminates. Take the most common PC as an example. Three years ago, the PC motherboard had a 4-layer board, and now the motherboard has a 6-layer and 8-layer HDI board (high-density integration) used in even ultra-thin notebook computers. A 4-layer circuit board requires only one copper clad laminate, a 6-layer circuit board requires two copper clad laminates, and an 8-layer circuit board requires 3 copper clad laminates. For the same PC, the amount of copper clad laminates has increased several times over the past few years.
According to the statistics of Industrial Securities, the production capacity of the world's leading rigid copper clad laminate manufacturers such as Kingboard, Shengyi, Nanya Plastics, Jinan Guoji, and Taiyao, currently have limited new capacity, only Shengyi Technology, Huazheng New Materials, and Nanya New Materials In the future, there is an expansion plan, and the overall expansion of the Taiwan plant is relatively small.
In addition, copper foil, the largest raw material for copper clad laminates, is still in short supply. According to industry chain surveys, mainstream companies are currently in full orders and short supply. The agency said the gap will continue until 2022.
The shortage of main raw materials has further reduced the possibility of expansion of copper clad laminates.
With the limitation of new capacity and the recovery of the downstream economy, Kaiyuan Securities believes that the current price increase cycle will last more than 16-17 years.
