In the intergenerational upgrade of 10 years, 5G brings PCB/CCL demand and added value. China's IMT-2020 (5G) promotion group proposed 5G "five key technologies", and the wireless access network device industry chain ecology has undergone major changes, 1) 5G radio will introduce Massive MIMO (large-scale antenna array) technology, and 5G The number of base stations has increased significantly compared to 4G. We estimate that 2/3 of the output value of mobile communication base station antennas will be transferred to the PCB industry chain. Therefore, we estimate that the value of high-frequency PCB/CCL for only 5G base station antennas will be 4G. More than double. 2) 5G networks will carry more bandwidth traffic, and investment in routers, switches, IDCs, etc. will increase, and the demand for high-speed PCB/CCL will also increase significantly. In addition to increased demand, high-performance equipment will use higher-value (high-frequency (antenna)) high-speed (IDC/base station) board materials with higher added value, which will bring double value added and consumption in the PCB/CCL industry chain.
5G communication equipment will be the core driving force of the PCB industry in the next three years. The PCB industry has entered a mature stage, and the traditional application market is saturated. The key to growth depends on the emerging segments of the downstream. Prismark believes that automotive and communications equipment will take over consumer electronics and become the new engine for industry growth in the next five years. Regardless of whether the car electronics (human life) or communication equipment (single device value is large, involving a wide range), the manufacturer will directly authenticate the upstream materials of the equipment. The automotive smart driving and new energy vehicle market has grown rapidly in recent years, but the certification threshold for the automotive panel market is higher, especially for high value-added core components such as ADAS and energy management. It is difficult for Chinese manufacturers to break through in a short period of time. Relatively speaking, downstream equipment vendors in China's communications sector have achieved a transition from followers to leaders in the 5G era. Shennan Circuit and Hudian shares have already occupied a major share of the 4G equipment supplier PCB procurement market; 5G is expected to achieve upstream Localization of high-end high-frequency/high-speed board materials. We believe that communication PCB will be the core driving force for industry growth in the next three years.
5G brings opportunities for localization of high-end materials, from cycle to growth. CCL is the main material for PCB manufacturing. CCL products are divided into traditional products and high-end products. Traditional products are mainly epoxy fiberglass cloth products (FR-4 and modified FR-4) and simple composite materials (CEM-1, CEM-3), which have the largest output, but low added value, current production capacity. Basically, it has been transferred from Europe, America and Japan to mainland China; the output value of CCL in China has accounted for 65% of the world, and the further increase in the market share of domestic manufacturers is a general trend. At the same time, high value-added special materials CCL is still monopolized by foreign companies such as Rogers, Taikangli and Panasonic. Special material copper clad laminates generally refer to copper clad laminates made of special resin fillers in a certain proportion. The main filling materials include polytetrafluoroethylene PTFE (millimeter wave radar and extremely high frequency communication), and hydrocarbon (base station radio frequency below 6 GHz). , PPE / CE (high-speed multi-layer board) and so on. The special material CCL has a high added value and is several times more expensive than the traditional FR-4 product, so it is basically not affected by the cyclical fluctuation of the raw materials. Because of the surge in demand in the future of 5G and automotive electronics, high-end manufacturers can share the dividends of downstream emerging areas. In the 5G era, domestic companies with high-end product production capacity are expected to gradually break through the monopoly of foreign capital, dilute the original cycle attributes, and ushered in double improvement in performance and valuation.
Cake sharing for 5G equipment PCB will be determined by “craft + materials”. Upstream high-end materials are important, but process and design have a big impact on the final performance of PCB finished products. “Process + Materials” will share the industry added value brought by 5G. The 5G high-frequency/high-speed board needs to be impedance controlled during the design process and needs to be implemented through a superb process. 5G equipment PCB performance requirements are extremely high, generally higher layer, area (large area, small thickness to diameter ratio), drilling accuracy (small aperture, plate alignment), wire (line width, line spacing), etc. The requirements require a higher process fit during PCB processing. At present, the PCB processing technology of Shennan Circuit and Hudian has been leading the world, with the processing layer up to 100 layers and the minimum aperture as low as 0.1mm.