- Aug 14,2018
As the basic material of electronic products, PCB is in the vast demand market. The downstream applications include communication, computer, consumer electronics, automotive electronics, etc. Among them, communication and computer are the largest application sectors of PCB, accounting for more than 25%.
According to historical output trends, we believe that the next development cycle is expected to benefit from computer performance upgrades, communications equipment upgrades, consumer electronics micro-innovation and automotive electronics outbreaks. According to Prismark, the PCB industry compound growth rate will reach 3% in 16 to 20 years. That is, the output value in 2020 is approaching 60 billion US dollars.
Multi-scenario application demand will break out, multi-factor limit supply capacity
PCB downstream applications are extensive and are currently welcoming the industry boom. We believe there is a certain amount of momentum in the HPC, communications, consumer electronics and automotive electronics sectors.
On the computer side, HPC is the main method to solve the running speed limitation of the traditional computing method. The realization of the high-speed running function is inseparable from the performance of the basic material, and thus the PCB used by HPC will be improved in terms of performance and usage;
On the one hand, the arrival of the 5G era puts the construction of the base station on the agenda, on the other hand, it also puts forward requirements for the performance improvement of the intelligent terminal equipment, and accordingly puts higher requirements on the PCB material;
Consumer electronics innovation and automotive electronics intelligence have opened up the PCB incremental market, and demand is erupting soon. However, due to the previous industry cycle, many outdated production capacity, environmental protection supervision and upstream copper foil have the tendency to convert lithium foil, the supply capacity is tightening.
The price increase logic under the imbalance between supply and demand determines the high growth period of the PCB industry
The direct result of supply and demand imbalance is price increase. By analyzing the historical situation, the price increase will be beneficial to the PCB industry chain. The profitability of downstream PCB manufacturers is the most stable, which means that PCB manufacturers can resist the pressure of upstream price fluctuations. While ensuring the expansion of its own business, it is the strongest part of performance certainty. Under the circumstances of the outbreak of demand and application, the opportunity of the PCB industry sector has been highlighted.
Focusing on Chinese manufacturers, we believe that in the upward development of the industry, benefiting from domestic substitution and concentration, China's leading domestic manufacturers are expected to see an outbreak in the up cycle.