(1) The growth of global copper clad laminates is slowing down

Copper clad laminate (CCL) is the main material of printed circuit board. According to the number of layers, it accounts for 50% ~ 70% of the cost of PCB raw materials. Its manufacturing method is to add reinforcing materials (glass fiber cloth, insulating paper, etc.) with impregnated resin (epoxy resin, phenolic resin, polyimide resin…), cut pieces, and then attach copper foil on one or both sides, The copper foil substrate is formed by hot pressing.

Copper foil substrates are divided into substrates with different characteristics according to different materials, mainly including paper substrates, composite substrates and glass fiber epoxy substrates. The paper substrate has poor strength and is a low-grade product. It is generally used for household appliances such as TV and audio. The inner film of the composite substrate is impregnated with epoxy resin with insulating paper or glass fiber mat, which is also used for household appliances.

In 2006, the cumulative growth rate was 4 times higher than that in 2000. After 2002, China’s copper clad laminate industry and the global copper clad laminate industry shrank, and achieved unimaginable development. It was the 2001 Internet bubble burst that lasted to 02 or 03 years of recession that made the printed circuit board industry abroad accelerate the transfer to China. With the transfer of orders to China, the demand for CCTV in China increased. Due to fierce competition, China has become the first choice for investment in the global printed circuit board and copper clad laminate industry. The recession in 2002 and 2003 not only promoted a large number of foreign enterprises to enter China, but also promoted the enterprises setting up factories in China to expand their production. The result of this round of investment directly contributed to the leapfrog development in 2004 and 2005, making China the world’s largest manufacturer of circuit board and copper clad laminate, and completing a global adjustment of the layout of copper clad laminate industry.The formation of this pattern has promoted the development of the industry.

(2) Material cost composition of copper clad laminate

Glass fiber epoxy substrate is made of epoxy resin, glass fiber cloth and copper foil. It includes G-10, FR-4, FR-5, etc. among them, FR-4 is the one with the largest output and demand in the copper foil substrate industry. FR-4 substrate is widely used in computer components and peripheral equipment. For example, the printed circuit boards used in products such as motherboard and hard disk machine are processed from FR-4 substrate.

Take the ordinary tg4mil core plate (thin plate) as an example:

Raw materials account for 80%, hydropower and others, labor and depreciation are 8%, 8% and 4% respectively; Subdivide the composition of raw materials, copper foil accounts for 63% of the production cost, glass cloth accounts for 10% of the production cost, and resin accounts for 7% of the production cost. It can be seen that the price rise of raw materials, especially copper, has a great impact on copper clad laminate.

Since the beginning of 2006, the price of raw material copper has increased significantly, which has seriously affected the profits of copper foil and copper clad laminate, thus affecting the whole PCB industrial chain and leading to the decline of investment enthusiasm of downstream enterprises. Enterprises began to consider developing from specialization to vertical integration to reduce the risk of rising raw material costs

(3) Development trend of copper clad laminate

As major global PCB manufacturers have set up factories in China, the industrial agglomeration effect has brought good opportunities for the development of PCB upstream and downstream manufacturers in China. Copper clad laminate is the circuit bearing foundation of printed circuit board, and printed circuit board is the indispensable main component of most electronic products.

The production of copper clad laminate tends to be more and more centralized. The trend of Evergrande, a big player in the copper clad laminate industry, is obvious. All major copper clad laminate manufacturers implement the scale leading strategy, and the production capacity increases rapidly, even exceeding the growth rate of PCB, but low profit is an inevitable trend.

Based on the capacity expansion of major CCL manufacturers in Taiwan and Mainland China, it is expected that the global capacity growth rate will reach 23.67% in 2007, while China’s capacity growth rate will reach nearly 30%. Even if the PCB output value growth rate is used to replace the CCL output value growth rate, its capacity expansion will still be much higher than the demand growth. Therefore, although the CCL industry will maintain stable growth at present, the large-scale expansion may face the industry recession caused by overcapacity.

The concentration of CCL is lower than that of foreign countries, but it is still higher than that of PCB. Among the world’s major copper clad laminate manufacturers, 8 of the top 10 companies are mainly based in foreign countries, and only 2 enterprises are based in China. Among these enterprises, there are three in Japan, two in Europe and America, two in Taiwan and one in South Korea. Especially in Japan, the United States, Europe and South Korea, one or two companies account for more than 50% of the main sales volume of the whole country and region, showing a strong intensification. In contrast, nearly 113 enterprises are producing copper clad laminates in China, On average, an enterprise accounts for less than 0.3% of the global share.

On the one hand, China is a large country manufacturing copper clad laminates and has the largest copper clad laminate manufacturing enterprises in the world, but on the other hand, it also exposes the pressure of insufficient supporting facilities, weak technology and rising costs, and the differences caused by different product structures and technical contents.

At present, China’s copper clad laminate industry is: Although the quantity is large, the value is low, the industry is strong and the enterprise is weak, which provides opportunities for the development and integration of copper clad laminate enterprises.

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