PCB Industry Has Entered The Era Of High Cost, Leading Enterprises Have Prominent Advantages

- Nov 17, 2018-

The reasons for the increase in price of glass fiber can be summarized as follows:

The capacity contraction of the supply side dominated by the glass manufacturer: the glass industry is highly concentrated and has obvious periodicity.In the situation that the market of glass fiber electronic yarn/electronic cloth in the early stage continues to languish, many enterprises that own glass furnace give priority to the development of glass fiber roving products. The project of newly built glass fiber furnace is reduced. Among the domestic funded enterprises, taishan fiberglass only constructed 50,000 tons of glass fiber furnace, which was put into operation in November 2015.In 2016, taishan fiberglass and chongqing international Shanghai fiberglass furnace were shut down, reducing by 3.80,000 tons of electronic glass yarn.In addition, chongqing international base has a glass fiber furnace cold repair production, the industry electronic glass fiber yarn in a small decline in production capacity.In the case of limited production capacity of electronic glass fiber yarn, the supply and demand tends to be tight in the short term.

The pressure of environmental protection is increasing, and the shrinking output of imitation cloth causes the change of the supply and demand relationship of electronic glass fiber gauze.

Under the guidance of the new industrial policy, the production capacity of electronic cloth tends to be concentrated in the glass furnace, resulting in increased pressure on professional manufacturers of electronic cloth.

Since the beginning of the year 18, the price of some fiberglass cloth has begun to loosen.We have learned from the market that the decrease of 7638 cloths and 2116 cloths on thick plates is relatively large, with an average decrease of 5% ~ 18%.The price of fiberglass fabrics for thin sheets remains high.In the early stage, the pit kilns under cold repair started to fire successively in 18Q2, and the capacity was gradually released. This year, the major factor affecting the supply side will be the environmental protection production limit, and the medium and low-end enterprises will be further cleared.

1.3.Resin prices remain high

Synthetic resin is one of the most important raw materials for copper clad sheet because of its good mechanical, electrical and bonding properties.Different types of PCB have different requirements for resins: generally speaking, single/double panel, multi-layer board and HDI are mainly made of phenolic resin and epoxy resin, high-speed/high-frequency board is mainly made of polytetrafluoroethylene, and the recently popular halogen-free copper clad board is made of environmental non-bromine resin.Currently, our suppliers in China and Taiwan mainly supply phenolic resin and epoxy resin.

Besides the downstream demand, there are two other reasons for the rising cost of epoxy: raw materials and environmental protection.In terms of raw materials, the upstream industry of epoxy resin (mainly oxychloropropane and bisphenol A) is closely related to the global crude oil price trend. The crude oil price keeps rising this year and the resin price continues to reach A new high.In terms of environmental protection, many manufacturers in huangshan, shandong and other places do not meet the environmental protection requirements, resulting in production cut and production suspension, or raising production costs to meet the environmental protection requirements, thus promoting the continued rise in the price of epoxy resin.

1.4.Upstream raw material prices directly affect the price of copper clad sheet

Copper-clad sheet is the most basic material of PCB, also known as base material.It is also called Core when it is used in multi-layer production.It is mainly divided into two categories: rigid copper clad plate (CCL) and flexible copper clad plate (FCCL), which are further divided into different material types according to the downstream demand for different performance.Judging from the current market demand for copper clad plates, four major trends will emerge in the future:

(1) meet the environmental requirements of lead-free and halogen free;

(2) lightweight and high strength, thinner;

(3) meet the requirements of high frequency and high speed in the future;

(4) able to adapt to more complex working environment, such as high heat resistance, corrosion resistance, etc.

At present, Japan, the United States and Europe have focused on composite, special substrates and other small but refined areas.

Global rigid copper clad sheet market 2016, from 93 in 2015.$700 million, up to 101 in 2016.$200 million, an annual increase of 8.0%.In addition, copper-clad market is highly concentrated. Since 2013, the top ten PCB companies in the world have occupied more than 70% of the market share, and reached 74% in 2016.But capacity growth has been too slow, with a compound growth rate of just 2 per cent between 2013 and 2016.2%.Supply and demand in the copper-clad and PCB industries has been tightening since the end of 2016.

The biggest increase in the price of copper clad sheet was from the end of 2016 to the third quarter of 2017, when the average price soared from 101 yuan per sheet to 200 yuan per sheet.Since the end of 2017, the price of copper clad plate has become loose, and it basically drops to 170 yuan per sheet after fluctuating for a period of time.In January 18, jiantao was the first to announce the price increase notice. However, from the perspective of downstream procurement, the price increase was not sustained for a long time, and it was not put into the order of mass purchase in the downstream.From the end of 2018, copper-clad manufacturers began to cut prices, with an average reduction of about 5%.However, since late may, the downstream PCB orders have recovered significantly from the slack season. In June, the overall order schedule was tight, and the copper-clad factory began to send the price increase signal.We expect the overall price hike of copper clad plates to be limited this year, and some new production capacity of copper clad plates will be issued in the third quarter of 2018, and the supply and demand relationship with downstream PCB enterprises will be further eased.