According to Zhitong Finance APP, Shanghai Securities released a research report stating that recently, CCL has experienced a price increase wave, with KB LAMINATES issuing a price increase notice, and second-tier manufacturers such as Hongruixing and Weilibang following suit. With the rapid development of artificial intelligence technology and applications, the demand for AI servers is strong, becoming the main driving force for PCB demand growth. The upstream high-end materials are facing supply shortages, including LowDk electronic cloth/quartz cloth, HVLP copper foil, and other capacities are also facing tightness. It is recommended to continue to pay attention to upstream material opportunities in AIPCB, with related manufacturers including Grace (603256.SH), TGCF (301217.SZ), Defu Technology (301511.SZ), Dongcai Technology (601208.SH), Shengquan Group (605589.SH), Tiancheng Technology (688603.SH), Lianrui New Materials (688300.SH), Jiangnan New Materials (603124.SH), etc.
<h2>The main points of Shanghai Securities are as follows:</h2>
CCL is experiencing a price increase wave, KB LAMINATES has issued a price increase notice, and manufacturers such as Hongruixing and Weilibang are following suit
Recently, KB LAMINATES issued a price increase notice, announcing that starting from August 15, the price of products such as CEM-1/22F/V0/HB/FR-4 will increase by 10 yuan per sheet. On the same day, second-tier manufacturers also issued price increase notices, with Weilibang raising the price of products such as CEM-1/22F/HB by 5 yuan per sheet due to rising copper prices; Hongruixing's normal/middle/high TG copper-clad laminates will increase by 10 yuan.
CCL is the core raw material of PCB, accounting for the highest cost of PCB raw materials
The inner layer structure of PCB usually uses copper foil, prepreg, and copper-clad laminates. Copper-clad laminate is the core material of the inner layer, usually using copper foil on both sides of the insulating layer, thus forming the inner layer structure of the PCB. According to Zhiyan Consulting, the raw material cost accounts for 60% of the PCB cost composition; among the raw materials, copper-clad laminate has the largest proportion, accounting for 30% of the total PCB cost.
Copper-clad laminate, abbreviated as CCL, has upstream raw materials accounting for about 90% of the cost of copper-clad laminate
Copper-clad laminate refers to a board-like material made by soaking electronic fiberglass cloth or other reinforcing materials in resin, with one or both sides covered with copper foil and heat-pressed. The substrate layer of copper-clad laminate is made of non-conductive materials such as fiberglass cloth, while the copper layer has conductive properties. According to Zhongshang Intelligence Network, the upstream mainly consists of copper foil, resin, and fiberglass cloth, accounting for 42.1%, 26.1%, and 19.1%, respectively.
AI demand surges, PCB prosperity continues to rise, upstream electronic cloth, copper foil, and resin supply is tight
With the rapid development of artificial intelligence technology and applications, the demand for AI servers is strong, becoming the main driving force for PCB demand growth. On one hand, the upgrade of AI servers promotes the gradual upgrade of GPU motherboards from high-layer boards to high-end HDI products; on the other hand, it also puts forward further requirements for technological upgrades, driving the continuous increase in demand for upstream high-performance materials.
PCB volume and price rise together, key materials in AIPCB upstream are in short supply
With the PCB industry experiencing a simultaneous increase in both volume and price, upstream high-end materials are facing supply shortages. Capacities for Low Dk electronic fabrics/quartz fabrics, HVLP copper foil, and others are all facing tight supply.
Electronic Fabrics: High-performance electronic fabrics mainly refer to low dielectric electronic fabrics (Low DK, Low Df) and low expansion (Low CTE) electronic fabrics. The market for high-performance electronic yarns, which are the raw materials for high-performance electronic fabrics, is in short supply. According to the Sihan Industry Research Institute, global high-performance electronic fabric suppliers are mainly Japanese companies, Taiwanese companies, and some mainland Chinese enterprises. Nittobo is a leading enterprise. Among them, LDK generation one fabric (NE-Glass) is mainly used in AI servers/switches and other communication infrastructure motherboards, as well as semiconductor packaging substrates for DDR memory; LDK generation two fabric (NER-Glass) is mainly used in AI servers/switches.
Copper Foil: Electronic circuit copper foil is widely used with the development of PCB technology, and there is significant room for domestic substitution of high-end products. High-performance electronic circuit copper foil can be divided into five categories based on application areas, including copper foil for high-frequency and high-speed circuits, ultra-thin copper foil for IC substrates, copper foil for high-density interconnect (HDI) circuits, copper foil for high-power and high-current circuits, and copper foil for flexible circuit boards. Among high-end copper foils, the most widely used and produced is low-profile copper foil, mainly RTF copper foil, VLP, and HVLP copper foil.
Electronic Resins: New electronic resins such as carbon hydrogen resin (CH), polyphenylene ether (PPE/PPO), polyimide resin (PI), and bismaleimide resin (BMI) possess excellent dielectric properties. As the performance requirements for copper-clad laminate nodes in high-performance servers continue to rise, previously used epoxy-based copper-clad laminate materials are gradually unable to meet the demands of high-frequency and high-speed applications. Therefore, new electronic resins have emerged.
Functional Fillers: For high-performance high-speed substrates, ultra-pure spherical silica has become the mainstream choice to ensure lower dielectric loss. High-performance high-speed copper-clad laminates have increasingly stringent requirements for Dk and Df, necessitating the selection of materials with lower dielectric loss to minimize signal transmission loss during use.
PCB-Specific Electronic Chemicals: Electroless copper and electroplating are important steps in the PCB production process. With the development of PCBs, special requirements have also been put forward for electroless copper and electroplating specialty chemicals. Electroless copper and electroplating are fundamental to achieving the conductivity of PCBs, indirectly affecting the reliability of electronic devices.
Copper Balls/Copper Oxide Powder: Mainly used in the PCB electroplating process, copper balls account for about 6% of PCB costs and are an important raw material for PCB manufacturing. Copper balls (generally phosphor copper balls) are mainly used as anode oxidation in the PCB electroplating process, participating in chemical reactions; copper oxide powder in the electroplating industry is also known as electronic-grade copper oxide powder. Currently, the products using copper oxide powder in the PCB industry are mainly those with high requirements for line width, line spacing, and coating uniformity.
In terms of targets, it is recommended to pay attention to upstream materials of AIPCB.
Electronic Fabrics: Grace (one of the few domestic suppliers capable of stably supplying low-dielectric electronic fabrics and possessing mass production capabilities); China National Materials Technology (achieved mass production of second-generation low-dielectric fiberglass)
Copper Foil: TGCF (a leading enterprise in the domestic electronic copper foil industry, the company's HVLP1-3 copper foil has been supplied in bulk to customers); Defu Technology (the company has completed mass production of multiple HVLP series products, with HVLP5 currently in the R&amp;D stage); Longyang Electronics (the company's HVLP5 grade copper foil is in the customer product verification and testing stage); Jiayuan Technology (the company has achieved multiple breakthroughs in the high-end electronic circuit copper foil field, making positive progress in the HVLP copper foil area); Fangbang Co., Ltd. (the company's copper foil products mainly include carrier peelable ultra-thin copper foil).
Electronic Resin: Dongcai Technology (the company's hydrocarbon resin and other products have been supplied to Nvidia by leading domestic and international copper-clad laminate manufacturers); Shengquan Group (the company has the overall solution capability for the full range of products from M4 to M9); Hongchang Electronics (the company's flame-retardant epoxy resin is used in copper-clad laminates); Tongyu New Materials (a supplier of electronic resins in the mid-to-high-end copper-clad laminate industry).
Functional Fillers: Lianrui New Materials (a leading domestic supplier of functional inorganic non-metallic powders, launching various specifications of products around the new generation of high-frequency and high-speed copper-clad laminates (M7, M8) and other fields).
PCB-Specific Electronic Chemicals: Tiancheng Technology (the domestic market share of the high-end PCB production invested level copper sinking line is second only to Amtech).
Copper Balls/Copper Oxide Powder: Jiangnan New Materials (in 2023, the company's copper ball series products had a market share of 41% in the domestic market, with downstream customers covering most first-tier PCB manufacturers).
Risk Warning
Downstream terminal demand may fall short of expectations, and market competition may intensify

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Shanghai Securities released a research report indicating that with the explosion of AI demand, the PCB industry continues to see rising prosperity, and CCL is experiencing a wave of price increases. KB LAMINATES and other second-tier manufacturers are following suit with price hikes, mainly due to tight supply of upstream electronic fabrics, copper foil, and resins. It is recommended to pay attention to upstream material opportunities in AIPCB, with related manufacturers including Grace and TGCF. CCL is the core raw material of PCB, accounting for 30% of PCB costs

Shanghai Securities: CCL welcomes a price increase wave, continuously focusing on AI PCB upstream material opportunities