From the comparison of data from 2001 to now, it can be seen that the change of growth rate of China’s PCB industry is closely related to the value added of industry (macro-economy). As can be seen from the trend of industrial added value in 2017, it is in the early stage of upward trend. Each previous cycle of rising or falling led to about 30% fluctuation of PCB growth, while the upward fluctuation of PCB growth in this round just started. 3. The rapid development of electronic information industry drives the rapid development of PCB demand in the downstream of copper clad plate
Printed circuit board is on the various types of copper clad, form the point of connection between a predetermined design and printing PCB components, its main function is to make all kinds of electronic components form order circuit connection and the vast majority of electronic devices and the product must be equipped with, known as the “mother of the electronic products, the main application areas are: computers, communications equipment, consumer electronics, automotive electronics, industrial control, medical equipment, aerospace and other industries.
The rapid development of downstream electronic information industry and the substantial expansion of industry scale will drive the development of PCB industry. China’s electronic information industry has maintained a sustained and rapid development trend. According to the forecast, China’s electronic information manufacturing industry achieved revenue of 13.8 trillion yuan in the first half of 2017, with a year-on-year growth rate of over 14 percent. Driven by national policies, economic transformation and other factors, China’s electronic information industry is expected to maintain a rapid development trend, thus bringing broad market development space to the PCB industrial chain. 2. PCB industry transfer to Asia
Since the development of the PCB industry in the 1950s, the PCB industry has experienced the transformation from “dominated by Europe and America” to “dominated by Asia”, among which the Asia is mainly centered on the Chinese mainland. From 2008 to 2016, the proportion of PCB output value in America, Europe and Japan gradually decreased. The proportion of PCB output value in the world decreased from 9.30%, 5.65% and 21.12% in 2008 to 5.08%, 3.78% and 10.44% in 2015, respectively. Japan suffered the largest decline. In contrast, PCB output value in mainland China increased year by year, reaching 47.36% in 2015, and PCB output value in other parts of Asia also increased slightly. Compared with the changes in global PCB market, China’s market growth rate is obviously higher than the global overall level, which is less affected by the impact. Only in 2009, output value declined, and in 2010, it resumed growth. In the future, China is expected to continue to grow at a higher rate than the overall global level, which is the main reason for the growth of China’s copper-clad demand.
According to the statistics, the overall size of global PCB is expected to reach $64.2 billion in 2017, and the output value will increase to $75.6 billion in 2022, with the annual compound growth rate expected to be 3.32%. Therefore, it is predicted that China’s PCB output value will reach usd 28.972 billion in 2017, accounting for 44.13% of global output value.
1. The periodicity of PCB is significant, and it is now in the growth state
PCB is widely used in downstream products and involves in many industries. Its industry is not affected by a single industry periodically, and mainly changes with the overall development of macro-economy and electronic information industry. According to the research, from the perspective of international market, the business cycle of global PCB market is consistent with that of electronic products and semiconductor market. The PCB industry has experienced only two downturns since 2000. PCB’s global output value declined in 2000-2002 due to the bursting of the Internet bubble, and it entered a trough in 2008 due to the impact of the global financial crisis. In the copper clad laminate industry in China, there are mainly rigid copper clad laminates, high performance epoxy-fiberglass base copper-clad laminates (including epoxy modified high performance resin copper-clad laminates), metal base copper-clad laminates, three-layer flexible copper-clad laminates and semi-cured resin film for multi-layer addition process. According to the statistical data, various types of epoxy resin consumed by domestic copper clad plate industry in 2014 accounted for 30.6% of the total consumption, with the usage rate taking the first place.
3. Epoxy resin
Due to its good mechanical, electrical and bonding properties, epoxy resin is widely used in the manufacture of copper clad laminates, anticorrosive coatings and plastic sealing materials. However, China has become the world’s largest producer of epoxy resin. According to the data, the output of epoxy resin in China increased from 680,000 tons in 2010 to 1.4 million tons in 2015, with an annual compound growth rate of 15.54%.
Different PCBS have different requirements for resins: generally speaking, single/double panel, multi-layer board and HDI are mainly made of phenolic resin and epoxy resin, while high-speed/high-frequency plates are mainly made of polytetrafluoroethylene, and the recently popular halogen free CCL is made of environment-friendly non-bromine resin. Currently, the suppliers in mainland China and Taiwan mainly provide phenolic resin and epoxy resin, and high-end special resins such as BT and PPE are monopolized by international giants in the United States and Japan. Glass fiber industry supply concentration is high. From the regional point of view, the production capacity of glass fiber is mainly distributed in Asia, America and Europe, among which the Asian region is dominated by Chinese production. From the perspective of suppliers, the global supply is mainly provided by OCV, PPG, JM, China megalith, chongqing international and taishan fiberglass, with a production capacity of 60%, while the domestic supply of fiberglass is about 80% monopolized by China megalith, taishan fiberglass, chongqing international, shandong fiberglass, sichuan weibo and changhai stock six major producers. I. supply side: raw material price affects copper clad sheet cost
The cost composition of copper clad plate is very large. It is estimated that copper foil, fiberglass cloth, resin and other manufacturing expenses (including labor, warehousing and logistics, equipment depreciation, hydropower and coal, etc.) account for 39%, 18%, 18% and 25% of the total cost respectively based on the type of copper clad sheet with high production and sales volume in the current market. Three major raw materials account for more than 70% of the total cost of copper clad sheet.
1. Standard copper foil
Since the equipment to produce high-quality copper foil, especially the key parts, needs to be imported and the cycle is long, the expansion of copper foil capacity is not only a large investment, but also an average cycle of at least one year, and the capacity growth is slow. According to the data of China association of electronic materials, global copper foil production capacity and output have been increasing slowly in recent years, among which the production capacity increased from 548,000 tons in 2010 to 655,000 tons in 2016, with an average annual growth rate of 2.41%. The output increased from 398,000 tons to 506,000 tons, with an average annual growth rate of 4.08%. According to the statistics of electronic copper foil association, domestic production capacity and output of copper foil increased from 209,900 tons and 161,300 tons in 2010 to 399,000 tons and 291,600 tons in 2016, with an average annual growth rate of 11.30% and 10.37% respectively, which was significantly higher than the global level.
At present, copper foil can be divided into three types: standard copper foil for PCB, lithium electric copper foil and copper foil for other purposes. As the booming development of new energy automobile industry has increased the demand for lithium electric copper foil, the supply and demand side of copper foil has been in a tight situation since mid-2016, when the total production capacity of copper foil cannot be expanded rapidly. Standard and at the same time, due to the lithium electricity copper foil copper foil is put in bigger difference on production equipment and technology, electronic use standard copper foil to require high precision product but lithium electricity profit higher than the standard PCB copper foil copper foil, copper foil production profit driven most manufacturers to lithium electricity industry, the new capacity also continue to favor the lithium electricity copper foil, copper foil overall price from lithium electricity copper foil for cause into comprehensive price increases. The rapid rise in the price of standard copper foil due to the short-term imbalance between supply and demand has pushed up the manufacturing cost of copper clad plates.
2. Glass cloth
China has become the world’s largest producer of fiberglass. After China joined the WTO in 2001, it actively digested the imported glass fiber furnace drawing production line. The domestic cost advantage and the gradual perfection of industrial chain made the global glass fiber industry transfer to China, and China’s glass fiber industry entered the rapid development period. From 2000 to 2016, the total output of China’s glass fiber industry increased from 273,000 tons to 3.62 million tons, with a compound growth rate of 18.81 percent, and the output maintained a long-term stable growth. In 2007, the total output of domestic glass fiber yarn was 1.6 million tons, and China began to become the world’s largest glass fiber producer.
The application of glass fiber in China mainly focuses on the fields of construction, electronics, transportation, pipeline, industrial application, new energy and environmental protection. According to the statistics of the composite application technology network, the proportion of glass fiber is 34%, 21%, 16%, 12%, 10% and 7% respectively. The electronic field has become the second largest application field of glass fiber in China. One of the key raw materials of copper clad sheet is electronic glass fiber yarn. According to the statistics of the forward-looking industrial research institute, the application scale of China’s fiberglass in the electronic field increased from 55,000 tons to 1,094 thousand tons from 2001 to 2014, maintaining a rapid growth rate over the years.
The glass fiber cloth plays a role of increasing strength and insulation in the copper clad sheet as a reinforcing material, accounting for about 25% of the raw material cost of the copper clad sheet. The glass fiber cloth is made by burning silica sand and other raw materials into liquid in the kiln, and then making glass fiber yarn by tangling with the alloy nozzle. Finally, it is made by spinning glass fiber yarn. The glass fiber cloth industry is highly concentrated, with the global six major suppliers (megalith, OC, PPG, etc.) accounting for 70% of the total production capacity. The electronic fabric used for PCB has high requirements.
The downstream of copper-clad industry is PCB industry. As the capacity of copper-clad industry is relatively concentrated, the market share of global copper-clad companies ranked in the top ten in terms of output value in 2016 was up to 74%, while that of the top ten PCB companies accounted for 53%. Therefore, copper-clad industry has more bargaining power than downstream PCB industry, and copper-clad enterprises are usually able to pass the upstream cost pressure to the downstream.