According to the Zhitong Finance APP, Tianfeng Securities has released a research report stating that it is optimistic about the development of the AI industry chain promoting upstream copper foil, which has significant potential in terms of market structure and profitability. With rapid demand growth, domestic substitution is expected to accelerate, and domestic copper foil manufacturers are likely to share the industry cake. It is recommended to pay attention to TGCF (301217.SZ) and Defu Technology (301511.SZ).
TGCF: HVLP1-3 generations have been supplied in bulk, and core technology for carrier copper foil has been mastered. The company has a reasonable capacity layout in the high-end copper foil field for PCBs, with leading product technology. The company's high-frequency and high-speed PCB copper foil has significant advantages among domestic enterprises, with RTF copper foil sales ranking first among domestic companies. HVLP1-3 copper foil has been supplied in bulk to customers for H1 2025, with production continuing to grow year-on-year. HVLP4 copper foil is undergoing full performance testing with downstream end customers, and core technology for carrier copper foil has been mastered, with productization and industrialization work underway.
Defu Technology: Plans to acquire a company in Luxembourg to enter the high-end PCB copper foil field. The company's main business is the research, production, and sales of electrolytic copper foil, and it has established close cooperative relationships with clients such as CATL, LG Chem, BYD, Guoxuan High-Tech, and Shengyi Technology. In 2025, it plans to acquire a copper foil company in Luxembourg to vigorously expand into the high-end PCB copper foil field and overseas markets. The Luxembourg copper foil company has excellent R&amp;D capabilities and customer resources, and has already obtained supply qualifications from the world's top four high-speed copper-clad laminate companies, including one exclusive supply partnership and two core suppliers, with the remaining one having supply qualifications, corresponding to top global AI chip manufacturers and cloud service providers.
Q1. Why focus on high-end PCB copper foil?
Copper foil is a key raw material for PCBs, with high-end products including RTF, HVLP, and peelable copper foil. High-end PCB copper foil refers to high-performance copper foil materials used in high-frequency and high-speed circuits and other high-end printed circuit boards (PCBs). Its characteristics include low signal loss, high flatness, ultra-thin/ultra-thick specifications, excellent thermal and electrical conductivity, and high compatibility with substrates. It is a key raw material for manufacturing copper-clad laminates (CCL) and PCBs, directly affecting the signal transmission efficiency, reliability, and power carrying capacity of circuits.
AI development promotes the demand for high-end PCB copper foil and product iteration, and domestic manufacturers are expected to share the industry growth cake. The global high-end copper foil market is approximately 70% monopolized by Japanese companies (Mitsui, Furukawa) and Korean companies (Solus), while domestic companies are gradually entering the supply chain. The demand for HVLP copper foil from AI servers has surged (with usage per unit being eight times that of traditional servers), and NVIDIA's new generation Rubin platform has clearly adopted HVLP 5 generation copper foil paired with PTFE substrates, driving value enhancement. Domestic copper foil manufacturers are achieving breakthroughs in the high-end PCB copper foil field, and domestic manufacturers such as TGCF and Defu Technology are expected to benefit from this round of AI development.
The leading company in high-end PCB copper foil, Mitsui, shows promising growth in HVLP and carrier copper foil, with strong profitability. Mitsui's projected ROIC for the copper segment in 2024, 2027, and 2030 is expected to be 27%, 39%, and 49%, respectively. We believe this indicates a significant improvement in profitability, validating the trend of upgrading and iterating high-end copper foil
Q2. What is HVLP copper foil? What are the challenges? How is the localization process?
HVLP Copper Foil: Refers to copper foil that has undergone special processing, with surface roughness Rz strictly controlled to below 2μm. Its advantages include low signal loss, high-density integration, excellent conductivity, strong thermal stability, and good interlayer bonding strength. It is suitable for scenarios such as 5G communication, AI servers, and high-speed data centers (e.g., HVLP 5th generation copper foil supporting NVIDIA's next-generation AI chips).
<img src="https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/e5471e6612f7bc44e19ef419ba4c9f65.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/e5471e6612f7bc44e19ef419ba4c9f65.jpg"/>
Source: Longdian Huaxin Holdings WeChat Official Account, Tianfeng Securities Research Institute
Tongguan Copper Foil states that the main challenges of HVLP lie in the high precision requirements of equipment, long ordering cycles, complex production processes, high precision requirements, high customer certification thresholds, and long cycles.
The process of producing HVLP copper foil is more stringent and precise compared to conventional standard foil, with extremely high standards for surface roughness starting from the raw foil. The specific process flow includes a series of complex steps such as acid washing, roughening, curing, alloying, passivation, and silane coupling. Among them, the core technical challenges mainly include: developing and manufacturing low roughness raw foil materials, accurately controlling the growth of copper nodules during the roughening and curing stages, optimizing high-temperature oxidation resistance during the alloying and passivation processes, and precisely implementing silane coupling agent coating technology.
The HVLP copper foil market is currently dominated by Japanese and Korean manufacturers, with significant room for domestic substitution.
Globally, Japanese and Korean manufacturers occupy over 85% of the HVLP market share, including Mitsui Mining &amp; Smelting (Japan), Fukuda Metal (Japan), Furukawa Electric (Japan), and Doosan Group (Korea). Domestic HVLP copper foil started relatively late and has a high degree of external dependence. With the deep penetration and increasing maturity of 5G technology globally, as well as the rapid iteration and upgrading of AI technology posing higher requirements for high-speed data centers and servers, Chinese companies face unprecedented opportunities in the research and production of high-frequency high-speed copper foil.
In recent years, some companies have achieved breakthroughs in high-end model technology, accelerating the localization process. Chinese companies such as Longyang Electronics, Tongguan Copper Foil, Defu Technology, Nord Shares, and Yihua New Materials have completed the development of HVLP products and have begun sample delivery and verification for downstream customers. In the future, they are expected to gradually replace international brands from Japan and Korea under the drive of technological innovation.
<img src="https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/2d11af29a3e14e3a15bcc0982842390f.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/2d11af29a3e14e3a15bcc0982842390f.jpg"/>
Source: Huajing Intelligence Network, Tianfeng Securities Research Institute
Q3. What is carrier copper foil? What are the challenges? How is the localization process?
Carrier Copper Foil (Peelable Copper Foil): Refers to copper foil with a thickness of less than 9 μm, supported by a carrier and can be peeled off during use. It features high tensile strength, good thermal stability, stable and controllable peel strength, and low surface profile, mainly applied in IC packaging substrates, high-density interconnect technology boards, coreless substrates, IC packaging process materials, and HDI fields
The rapid development of semiconductor chip technology and increasingly advanced processes have objectively driven the fine line trend in the chip packaging field, specifically in IC substrates and substrate-like materials.
<img src="https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/67ad01e006154212aa448d6721ae8df1.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/67ad01e006154212aa448d6721ae8df1.jpg"/>
Source: Longdian Huaxin Holdings WeChat Official Account, Tianfeng Securities Research Institute
Process is the key to the production flow. The mainstream process scheme for carrier copper foil in the industry is the electrolytic copper carrier method, which involves introducing a peeling layer on the bright surface of the electrolytic copper foil. Ultra-thin copper foil is prepared on the surface of the peeling layer using magnetron sputtering or electrodeposition processes. After the substrate is laminated with the ultra-thin copper foil, mechanical peeling removes the electrolytic copper foil and the peeling layer used as the carrier.
Thickness ≤ 3 μm, to ensure stable removal during the &#34;flash etching&#34; process and avoid side etching phenomena;
Surface profile Rz ≤ 1.5 μm, also to facilitate sufficient &#34;flash etching,&#34; while also benefiting high-frequency and high-speed performance;
Peeling force is stable and controllable, making it easier to peel from the peeling layer when using thin copper. Both excessively high and low peeling forces can lead to actual processing failures.
<img src="https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/df2a1bd775f4a1d8a7d9552b4df198a9.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/df2a1bd775f4a1d8a7d9552b4df198a9.jpg"/>
Source: Longdian Huaxin Holdings WeChat Official Account, Tianfeng Securities Research Institute
Storage chips open market space for carrier copper foil, significantly accelerating the localization process. In recent years, with the improvement in the prosperity of the high-performance computing and storage chip industry, the demand for IC substrates has been increasingly strong, opening up market space for carrier copper foil. According to Research Nester, the global IC substrate market size will reach USD 23 billion in 2024 and is expected to reach USD 100.3 billion by 2037. The accelerated development of downstream industries is continuously expanding the market space for peelable copper.
Carrier copper foil belongs to high-performance copper foil, with extremely high industry technical barriers, and its production technology has long been monopolized by Japan. Mitsui Kinzoku, a Japanese company, is the largest producer of peelable copper in the world, holding nearly 90% of the market share. In the domestic market, as the demand for high-end IC substrates grows, the prosperity of China's carrier copper foil industry has further improved, and the localization process has accelerated. Some companies' products have reached globally advanced levels in terms of surface roughness and copper thickness

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Tianfeng Securities released a research report, stating that the development of the AI industry chain will promote upstream copper foil demand and support domestic substitution. It is recommended to pay attention to TGCF and Defu Technology. TGCF has a technological advantage in the high-end copper foil field for PCBs, with a reasonable capacity layout and continuous production growth. Defu Technology plans to acquire a Luxembourg copper foil company to expand into the high-end PCB copper foil market and has established partnerships with several well-known enterprises

Tianfeng Securities: The development of AI servers aids in the domestic substitution of high-end copper foil, focusing on TGCF and others