5G technology change, radio frequency is the most significant, PCB both offensive and defensive
The wave of 5G construction that will start in 2019 will open up new space for the upstream industry.
Considering the increase of frequency and reduction of time delay, 5G is not only different from 4G in system architecture design, but also puts forward new requirements for radio frequency materials. The links of filter, antenna, oscillator and PCB have all been changed.
5 g base station number will reach 1.3 to 1.5 times the size of 4 g, the overall increase in the number of at the same time, due to the adoption of multiple antenna (MIMO) technology, higher request to the miniaturization, integration, 5 g in rf unit (AAU), originally by feeder connection part gradually convert PCB, and the future with the development of high frequency band and millimeter wave band, PCB value of communication system equipment is expected to increase from 2% to 5% – 6%.
According to comprehensive estimation, the global market size of 5G base station PCB board is 116.5 billion, 5.5 times that of 4G period. The peak annual global market size of 5G construction is 26.9 billion, and the domestic market is 16.1 billion.
5G construction drives the rise of PCB quantity and price
PCB has a wide range of downstream applications, among which the communication industry accounts for the highest proportion and continues to improve. From the past ten years of golden PCB in Taiwan, we can see that PCB in Taiwan started from PC and made achievements in smart phone. In the past era of 4 g, we ushered in the mobile payment, online video, take-away, Shared economic new industries, such as the mainland’s golden decade, 5 g dozen top gun, the future will open a new smartphone innovation period, automatic driving, virtual reality, AI and other downstream, and more difficult to predict, 5 g drive industry big imagination space.
The application demand of PCB board for communication network construction is mainly in wireless network, transmission network, data communication and fixed network broadband.
At the initial stage of 5G construction, the incremental demand for PCB is directly reflected in wireless network and transmission network, and there is a great demand for PCB backboard, high-frequency board and high-speed multilayer board.
In middle and later periods of the construction of 5 g, along with 5 g of high bandwidth business application accelerate penetration, such as mobile high-definition video, car networking, AR/VR business application spread, for data exchange center data processing ability also will produce great influence, after 2020 is expected to drive the domestic data center from the current 10 g, 40 g to 100 g, 400 g upgrade very large data center, the demand of data communication in the field of high speed multilayer board will rapid growth.
The number of base stations of 3.15g is 1.3~1.5 times that of 4G, and millions of new stations can be added in the peak construction year
According to the estimation of 5G frequency band and coverage radius, the total number of base stations in 5G is expected to be 1.3~1.5 times that of 4G
With 4 million base stations, 5G acer will have 5.2 million to 6 million stations in total.
5G base station multiplication, wireless architecture changes drive PCB volume and price rise.
Ignore the PCB market advantage relative to other radio frequency link pattern, Philippines think, PCB is already relatively mature, constructed the technical capacity and a moat, and similar to optical fiber cable, large dosage, but communications equipment business is not directly involved, industry competition pattern is relatively stable, at the same time, increasingly strict environmental protection policies, domestic makes competitive advantage gradually to concentrate in head manufacturer, Shanghai electric, shennan in recent five years are gross profit margin is presented.
Although China is now the world’s largest manufacturer of PCB, many of its production capacity actually belongs to manufacturers outside mainland China such as Taiwan, South Korea, the United States and Japan. In 2017, the overall output value of PCB in China was 200 billion yuan, and there were about 1,500 PCB enterprises with scattered production capacity.
According to the ranking of China’s electronic information industry, the top 10 domestic PCB manufacturers in 2017
(including domestic and foreign investment) accounted for 40.1% of the total revenue, while the top ten domestic investment accounted for only 14.9% of the total revenue, showing a large room for improvement. Believed that the rise in PCB depend mainly on market “quantity”, think, in the early 5 G for 2.6 G and 3.5 G of the intermediate frequency spectrum, the requirement of PCB is not high, but the Philippines thinks, the application of high frequency, high speed, high frequency in to use throughout the whole, millimeter wave phase, 5 G of low delay, high reliability, low power consumption characteristics of copper clad put forward higher requirements. PCB upstream high – frequency high – speed copper clad plate material is the core, import replacement space.
PCB upstream high – frequency high – speed copper clad plate material is the core, import replacement space.
PCB industry has experienced a shakeout, in a more stable competitive landscape, we take the global perspective to select the leading target. In the short and medium term, leading companies have bottom-up capacity expansion, which is expected to release capacity successively from 2019 to 2020. In the long run, the pattern of leading PCB suppliers such as huawei, zte and Ericsson has been relatively stable, only waiting for the release of demand for 5G high-end products. Considering the PCB downstream coverage of consumer electronics, automotive and other fields.
We prefer to focus on the relatively high proportion of downstream communication industry:
1) shennan circuit: the capacity will be increased by 35% in 2019, and the connection will be made in the next year;
2) Shanghai electric power co., LTD. : new capacity is released one after another, and the growth in the first half of 2019 is highly uncertain;
3) dongshan precision: acquire Multek, strengthen the communication layout beyond consumer electronics, and look forward to further integration in 2019;
Shennan circuit: domestically funded technology driven, 5G leading pioneer
The company was founded in 1984, specializing in printed circuit board PCB business. After more than 30 years of development, the company has become China’s printed circuit board industry output value of the first leading enterprises.
In 2008 and 2009, the company expanded the PCB business of “same technology” packaging substrate business and “customer same origin” electronic assembly business, becoming a pioneer In the field of China’s packaging substrate and electronic assembly manufacturing advanced enterprises, to create a “3-in-one” business layout. The company is the only one to enter the global PCB output value of the top 20 domestic manufacturers.
In 2017, the company achieved a revenue of 5.687 billion yuan, ranking first among domestic PCB enterprises in terms of output value and 21st in the world. The company’s downstream demand mainly comes from communication, which is applied in wireless base station, transmission network, data communication and broadband access network, etc., in which wireless radio frequency field has the largest share in huawei (30%~40%), and the rf metal substrate is the industry leader. 2014-2017h1, the operating revenue of the communication industry accounted for 66%/56%/64%/61% of the total revenue, contributing nearly 2/3
The performance. The top five downstream customers account for more than 60% of sales and have a high customer concentration. Huawei is the largest customer. According to the prospectus, H1 reached 24.6% in 2017. With the gradual realization of 5G commercialization, PCB in the communication industry will be the first to benefit, with greater demand elasticity. The company’s other business areas include: aerospace, medical engineering, automotive electronics, services/storage, semiconductors/consumer electronics and other fields.