PCB Raw Materials Continue To Increase Prices, Breaking The Original Pattern Of The Industry
There are many kinds of raw materials required for PCB production, mainly copper clad laminates (CCL), prepreg (PP), copper foil, copper balls, gold salts, inks, dry films and other materials. Generally speaking, PCB cost constitutes 37% of CCL, 13% of prepreg, 8% of gold salt, 5% of copper foil, and the proportion of labor cost is about 11% higher. Slightly adjusted.
The copper clad laminate is formed by bonding the upper and lower surfaces of the prepreg (PP) and the copper foil to a substrate of different specifications under high temperature and high pressure conditions, and the prepreg is mainly a sheet formed by glass fiber cloth, resin and additives. Bonding material. According to the thickness of the copper clad laminate, the cost of the fiberglass fabric accounts for 25% to 40% of the cost, the resin cost accounts for 25% to 30%, and the copper foil accounts for 30% to 50%. Due to the high concentration of the CCL industry, the bargaining power is strong, and the price is relatively smooth to the PCB industry. Therefore, the cost of the PCB company is sensitive to the price of the main raw materials such as electrolytic copper foil, fiberglass cloth and synthetic resin. The price increase effect will put a lot of pressure on the profitability of PCB companies.
1. Copper foil prices fluctuate at high levels, and supply and demand will ease in the second half of the year.
This round of copper foil enterprises is affected by the rising demand for lithium battery copper foil by new energy vehicles. The copper foil is actively converted into lithium foil, and the standard copper foil used for the production of PCB boards is reduced, resulting in the rapid price increase of copper foil since the beginning of 2016. There are differences in production equipment and process between standard copper foil and lithium copper foil. Lithium-ion copper foil processing process is less, the process is simple, and the gross profit is higher than the standard copper foil for PCB. With the promotion of China's new energy vehicle incentive policy, the production of new energy vehicles has expanded, and the demand for copper foil used as a negative electrode carrier for lithium-ion batteries has also increased dramatically. Domestic and foreign manufacturers have a higher enthusiasm for conversion. According to the CCL industry association, in 2015, Taiwan, Japan and South Korea produced 62,000 tons of lithium copper foil, accounting for 30.62% of the total output of electrolytic copper foil. In 2016, the domestic new lithium-ion copper foil (including conversion) was 16,700 tons, making the proportion of standard copper foil to the total annual domestic electrolytic copper foil production capacity reduced from 82.3% in 2015 to 79.8% in 2016. .
The price of copper foil is mainly composed of copper price and processing fee. From the trend of international copper prices, copper prices have been moving upwards since the beginning of 2016. In the second half of 2017, they hit an all-time high. Domestic Shandong Jinbao announced on July 5, 2017 that the price per ton of copper was raised by 1,000 yuan; on July 11, 2017, Willibang Electronics also announced that copper foil will be raised by RMB 2,000/ton. In the same period, as about 157,000 tons of copper foil exited the supply chain of FR-4, this part accounted for about 31% of the total copper foil, resulting in a serious shrinkage of copper foil supply for PCB production. Copper foil processing fee grow rapidly. Since the beginning of 2018, the copper price has been slightly adjusted at a high level, but the copper foil processing fee has not been adjusted.
The newly added capacity of copper foil will be released as soon as possible from the second half of 2018, partially alleviating the supply and demand pressures of upstream and downstream. The difficulty in expanding the copper foil is due to the titanium cathode roll production equipment imported from Japan. Japanese manufacturers usually do not expand the cathode roll because of the increased demand for copper foil. The tight supply of equipment led to an increase in the copper foil expansion cycle from 1-1.5 years to 1.5-2 years. According to the statistics of the domestic CCL industry association, in the past 17 years, 69,000 tons of new electrolytic copper foil production capacity was released, of which 81.2% was lithium battery copper foil production capacity; in 18 years, 7 copper foil enterprises in China increased by 6. 850,000 tons of production capacity, of which 89.1% is lithium battery copper foil capacity, so by the end of 18 lithium battery copper foil market is likely to exceed supply.
The price increase of copper foil is the main driving force for the price increase of CCL. It is indirectly transmitted to PCB companies through CCL. Through sensitivity analysis, each 10% increase in copper foil will lead to a 1.6% to 2.35% increase in PCB cost. . Copper foil is a capital-intensive industry with large-scale production, relatively high market concentration, and strong bargaining power for downstream. The price increase of copper foil will put a lot of pressure on downstream costs.
2. Industry cycle superimposed environmental pressure, two-wheel drive fiberglass cloth price increase
The capital-intensive glass yarn industry has a high market concentration and strong bargaining power. The glass fiber yarn is calcined into a liquid state by a raw material such as silica sand in a kiln, and is drawn into a very fine glass fiber through a very fine alloy nozzle, and then several hundred glass fibers are twisted into a glass fiber yarn. The investment in kiln construction is huge. It is a capital-intensive industry. The 30,000-ton kiln needs 400 million yuan. It takes 18 months to build a new kiln. The boom cycle is difficult to master, and once it has been ignited, it must be produced 24 hours a day, and it will take five years. Left and right, must be suspended for half a year of maintenance, the cost of entry and exit is huge. The fiberglass cloth industry has a high concentration. The global production capacity is 70% concentrated in China's Jushi, OCV, NEG, Chongqing International and Taishan Fiberglass. In China, China's Jushi, Taishan Fiberglass, Chongqing International, Shandong Fiberglass, Sichuan Microglass and Changhai have concentrated 80% of the country's production capacity.
The price of electronic fiberglass cloth has nearly tripled since the third quarter of 2016. Taking the 7628 cloth for thick plates as an example, the average price in July 2016 was only 3.2 yuan/m and rose to 8 in April 2017. .7 yuan / meter, approaching the historical high point of 10.6 yuan / meter in 10 years. The following table shows the price increase announcements announced by several major suppliers in 2017.
The reasons for the increase in glass fiber can be summarized as the following four points:
The capacity shrinkage of the supply end led by glass fiber manufacturers: The glass fiber industry has high concentration and obvious periodicity. In the case that the glass fiber electronic yarn/electronic cloth market continued to be sluggish in the early stage, many enterprises with pool kiln gave priority to the development of glass fiber roving products, and the new glass fiber electronic yarn kiln project was reduced. Among the domestic enterprises, only Taishan glass fiber was newly built 50,000. The ton glass fiber spun yarn kiln was ignited in November 2015. In 2016, Taishan Fiberglass and Chongqing International Shanghai Base's glass fiber spinning kiln were shut down one after another, reducing the total of 38,000 tons of electronic glass fiber spun yarn. In addition, the Chongqing International Headquarters has a glass fiber spinning kiln cold repair and production stoppage, the industry's electronic fiberglass yarn in the production capacity has slightly declined. In the case of limited production capacity of electronic glass fiber yarn, supply and demand tend to be tight in the short term.
The pressure on environmental protection has increased, and the shrinking output of imitation cloth has caused a change in the supply and demand relationship of electronic fiberglass gauze.
Under the guidance of the new industrial policy, the production capacity of electronic cloth tends to be concentrated in enterprises with glass fiber kiln, resulting in an increase in the pressure on the professional production of electronic cloth.
18 Year-to-date prices of some fiberglass fabrics have begun to loosen. We learned from the market that the 7638 cloth and 2116 cloth of the thick plate have a large drop, with an average drop of 5% to 18%; the price of the glass fiber cloth for the thin plate is still at a high level. In the early stage, the kiln in the cold repair has started to ignite in 18Q2, and the production capacity has been gradually released. The factors that have a greater impact on the supply side this year will be environmentally limited production, and the enterprises with low-end and non-compliance will further clear out.
3. Resin prices remain high
Synthetic resin is one of the important raw materials for copper clad laminates because of its good mechanical properties, electrical properties and bonding properties. Different types of PCBs have different resin requirements: Generally speaking, single/double-panel, multi-layer board and HDI are mainly made of phenolic resin and epoxy resin, and high-speed/high-frequency board is mainly made of polytetrafluoroethylene. The halogen-clad copper plate uses an environmentally friendly non-bromine-based resin. At present, suppliers in mainland China and Taiwan mainly provide phenolic resin and epoxy resin.
The price of epoxy resin has risen. In addition to the downstream demand, there are two other reasons: raw materials and environmental protection. In terms of raw materials, the upstream industry of epoxy resin (mainly oxychloropropane, bisphenol A) is closely related to the global crude oil price trend. This year, crude oil prices continue to rise, and resin prices continue to hit new highs. Environmental protection is mainly due to the non-conformity of environmental protection requirements of many manufacturers in Huangshan, Shandong and other places, resulting in reduced production and production suspension, or increased production costs to meet environmental requirements, thereby promoting the continued rise in epoxy resin prices.
4. Upstream raw material prices directly affect CCL prices
CCL is the most basic material for PCBs, also known as substrates. When it is used in the production of multi-layer boards, it is also called a core. It is mainly divided into two categories: rigid copper clad laminate (CCL) and flexible copper clad laminate (FCCL). According to the downstream requirements for different properties, it is subdivided into copper clad laminates of different material types. Judging from the market demand for CCL now, there will be four major trends in CCL in the future:
(1) Meet the environmental requirements of lead-free and halogen-free;
(2) Lightweight, high strength and thinner;
(3) Meet the high-frequency and high-speed requirements of the future;
(4) It can adapt to more complicated working conditions, such as high heat resistance and corrosion resistance.
At present, Japan, the United States and Europe have focused on small and sophisticated areas such as composites and special substrates.
In 2016, the global rigid CCL market increased from US$9.37 billion in 2015 to US$10.12 billion in 2016, with an annual growth rate of 8.0%. Moreover, the CCL market is highly concentrated. Since 2013, the world's top 10 PCB companies have been occupying more than 70% of the market share, reaching 74% in 2016. However, the capacity increase has been too slow, and the compound growth rate from 2013 to 2016 is only 2.2%. The supply and demand relationship between the CCL and PCB industries has been tense since the end of 16.
The biggest price increase of CCL is from the end of 2016 to the third quarter of 2017, and the average price has soared from 101 yuan/piece to 200 yuan/piece. Since the end of 2017, the price of CCL has been loosened. After a period of fluctuation, it has basically fallen back to 170 yuan/piece. In January 18, Jiantao first announced the price increase notice, but from the perspective of downstream purchases, the price increase was not long, and it was not implemented in the downstream bulk purchase orders. From the end of 3, 2018, CCL manufacturers began to cut prices, with an average price cut of around 5%. However, since the end of May, downstream PCB orders have recovered significantly from the off-season. In June, the overall order schedule was tight, and the CCL manufacturers began to pass the price increase signal. We expect the overall price increase of CCL to be limited this year. In the third quarter of 2018, some new CCL production capacity will be opened one after another, and the supply and demand relationship with downstream PCB companies will be further alleviated.