Shanghai Securities: High-performance electronic fabrics are in short supply, pay attention to the arrival of a new cycle in the storage market

According to the Zhitong Finance APP, Shanghai Securities has released a research report stating that currently, with the rapid growth in fields such as AI servers and high-frequency communication, the market for high-performance electronic yarn is in short supply, and it is difficult for production capacity to match market demand in the short term. Driven by strong downstream demand, the overall production capacity of high-end glass fiber cloth is in a tight supply-demand situation, leading to price increases for related products. With high-performance electronic yarn in short supply, China Jushi (600176.SH) is steadily advancing the development of low dielectric and low expansion products, and relevant downstream certifications are also accelerating. As the prices of storage chips have stopped falling and begun to rise, attention can be paid to the arrival of a new cycle in the storage market. The main points of Shanghai Securities are as follows: Supply and Demand: Strong AI demand, short-term production capacity of high-performance electronic cloth difficult to match market demand. The core raw material for high-performance electronic cloth is high-performance glass fiber yarn, which has a high technical barrier in its production process. Currently, only a few manufacturers in Japan, the United States, and Taiwan have mass production capabilities. Price Increase: Electronic yarn products are increasing in price, and tight production capacity drives expectations for price increases. Driven by strong downstream demand, the overall production capacity of high-end glass fiber cloth is in a tight supply-demand situation, leading to price increases for related products. Among them, global electronic yarn giant Nittobo announced in June that starting from August 1, the prices of related glass fiber products in its composite materials division would increase by 20%. At the same time, according to the average selling price of electronic cloth disclosed by Grace, the average selling price of electronic-grade glass fiber cloth in the mid-2025 report is 4.81 yuan/square meter, an increase of 1.15 yuan/meter year-on-year, and the price has risen for four consecutive quarters both year-on-year and quarter-on-quarter. Glass fiber giant China Jushi is steadily advancing the development of low dielectric and low expansion products. Glass fiber giant China Jushi stated that the company's series of special electronic cloth products are being actively and orderly promoted, and relevant downstream certifications are also accelerating. With the continued explosion of downstream AI demand, the market for high-performance electronic cloth will continue to expand. The storage market is gradually warming up, and a new cycle may be approaching. According to data from the Korea Customs Service, in Q2 2025, South Korea's storage chip export value increased by 20.7% year-on-year, with the average price rising by 0.7% year-on-year. Since Q4 2024, the weight of South Korea's storage chip exports has been continuously increasing. In terms of average price, since the second half of 2023, the prices of South Korean storage chips have bottomed out, and by June 2025, the export average price has returned to 2022 levels. With the prices of storage chips stopping their decline and beginning to rise, attention can be paid to the arrival of a new cycle in the storage market. Investment Recommendations Maintain an "overweight" rating for the electronic industry, and suggest focusing on upstream materials in AIPCB, including Grace, Tongguan Copper Foil, Defu Technology, Dongcai Technology, Shengquan Group, Tiancheng Technology, Lianrui New Materials, Jiangnan New Materials, etc. Risk Warning Technological development may fall short of expectations, intensified Sino-U.S. trade friction, terminal demand may fall short of expectations, increased market competition, and domestic substitution may fall short of expectations