Since 2018, the country has vigorously implemented environmental protection laws and regulations. The most noticeable include two things: first, whether the normal production of the overseas PCB industry has been affected, and second, the mainland's small and medium-sized PCB factories are overwhelmed and closed, and the entire Chinese PCB industry is orderly moving forward. And speed. Judging from the current situation of strict inspections of environmental protection regulations in the domestic PCB market, it is indeed helpful for medium and large PCB manufacturers that comply with environmental protection regulations to take orders and help improve the oversupply of market capacity. However, the premise is that environmental protection inspections are implemented in the mainland. The single effect will not appear quickly in the short term.
At the same time, the market's demand for PCBs is also greatly increasing, especially after the commercialization of 5G next year, coupled with the current demand expansion in the automotive market, the overall demand for the market is also expected to increase. The reasons behind the increase in PCB prices, in addition to the increase in market demand, include environmental protection and the price increase of upstream raw materials. A reshuffle of the PCB industry focusing on environmental protection is now unfolding. This is undoubtedly good news for leading companies. At the same time, due to the high PCB requirements in the automotive and 5G communication markets, it will strengthen the benefits of leading companies. Driven by both, The PCB industry reshuffle is accelerated!
First, let’s take a look at environmental issues. The strict implementation of environmental laws and regulations has further caused Shenzhen Daxin, a PCB manufacturer of Kingboard Group, to be unable to continue production due to non-compliance with the emission regulations. The factory will be closed before September 30 and will become the first company in mainland China. The tightening of environmental inspections shows that PCB factories that have closed their factories. Although the PCB industry has different interpretations of Kingboard's actions, it even pointed out that Kingboard Group took this opportunity to close and disband the old factories that did not meet the operating efficiency. However, the mainland's strict regulations The implementation of environmental inspections is a fact, and the increase in the cost of sewage and waste disposal for Taiwanese companies is expected to increase.
The PCB industry pointed out the origin of the current mainland sewage discharge problem and the search for a solution, and pointed out that since Taiwan’s PCB plants have entered the Chinese mainland market for many years, the originally approved sewage discharge volume has reached the critical point of the permitted volume. As a result of the expansion of production over the years, the waste water produced by the intermediate process has increased greatly. Therefore, the factories are currently making every effort to improve the recovery of the "reclaimed water" produced by the intermediate process, so as to effectively control the external sewage discharge and comply with the original approved discharge license discharge standard. And emissions. Of course, the increase in water treatment facilities will also increase the cost and burden.
As early as mid-July, the Mobile News Online reported that due to environmental issues and the rise of copper and other raw materials (copper clad laminates, copper foils) in domestic PCB manufacturers, the costs have increased, so there has been a collective price increase. Since the beginning, PCB manufacturers including Omwei Electronics and Kingboard Group have issued price increase notices; as for Taiwanese manufacturers, according to industry sources, there are still a lot of idle production capacity, and it is not easy to follow the price increase at this stage.
First of all, with regard to the increase in the price of raw materials, the copper price has received the most attention. The rise in copper prices has significantly increased the costs of copper foil substrate manufacturers and PCB manufacturers. According to industry statistics, the cost of PCB raw materials accounted for 33%, of which the raw material cost of thick copper copper foil substrates accounted for 18%-20%. In addition, copper foil accounted for 30% of the overall cost of thick copper copper foil substrates.
In addition, in recent years, the domestic market’s awareness of environmental protection has strengthened. From the emission limit in Kunshan, Jiangsu at the end of 2017, to the emission limit in Zhuhai and Shanghai, and to strict inspections in Shenzhen, based on the sewage discharge problem of the PCB industry, PCB factories at this stage, regardless of Taiwanese investment China, mainland capital, and even foreign capital are unpopular industries in the mainland. For this reason, the PCB industry has to face the pressure of rising costs and the continuous reduction of production capacity, and eventually the pressure to leave.
Therefore, after the PCB industry is under pressure to increase the cost of raw materials, and external environmental issues have caused the problem of limited production capacity, PCB companies in the palace have begun to notify customers of price increases since July. As for the Taiwanese factories, due to unsatisfactory demand, there are still a lot of restrictions on production capacity. In addition, the price increase of copper foil substrate factories in the second quarter of this year is not obvious. For this reason, the industry believes that it is too difficult to follow the price increase at this stage. high.
Regarding the price increase news, according to the mobile phone news online, the reason for the basic price increase is mainly due to the above two, on the one hand, the increase in raw materials, and on the other hand, the environmental protection department's strict emission limit.
In addition, at the beginning of August, the Shenzhen Municipal Human Settlements Commission issued the "Notice on Not Accepting Applications for Strictly Controlled Waste Disposal Administrative Licensing". The notice stated that according to the Guangdong Provincial People’s Government Order No. 242, the Guangdong Provincial People’s Government And the Decision to Amend Some Provincial Government Regulations. From July 20, 2017, the “Guangdong Province Strict Control of Waste Treatment Administrative License Implementation Measures†was formally abolished, and the strict control of waste list and strict control of waste treatment administrative licensing matters were formally cancelled. Since the effective date of Guangdong Provincial People's Government Order No. 242, our committee will no longer accept applications for strict control of waste disposal permits.
2. Strong demand for PCB: collective benefit from the industry chainIt is understood that the PCB industry will enter the peak season of market demand in the second half of the year, but the first to see strong in the third quarter is the upstream copper foil, fiberglass cloth and copper foil substrate (CCL) demand, especially the current fiberglass cloth factory still has raw material fiberglass Due to the dilemma of tight yarn supply, the product rally is on the verge; copper foil factories have accelerated their demand for copper foil due to electric vehicle lithium batteries and PCB factories, forming a boom in market demand.
Li Sixian, general manager of Jinju Development of Copper Foil Factory, pointed out that the processing fee of Jinju in the second quarter of this year will remain the same as that of the first quarter, and the third quarter will enter the PCB peak season. With the emergence of market demand, the processing fee will remain stable and beneficial. Promote the third quarter profit.
As for the supply of fiberglass cloth, the fourth quarter of last year has been showing a situation of tight supply of raw fiberglass yarn. This phenomenon has not been improved so far. In the off-season of the second quarter, the price of electronic grade fiberglass cloth is not strong. Rising trend, but including Fuqiao and Dehong are optimistic about the effect of the peak season in the third quarter, which will push up the demand and drive up prices.
Fu Qiao accounted for 45% of automotive sheet applications last year, and the proportion of shipments was the first. With the deepening of automotive electronics, the proportion of automotive applications will continue to increase. Fu Qiao invested 1.65 billion Taiwan dollars in Dongguan to install 360 looms with a production capacity. It will be all released in the first quarter of 2019, and it will also be targeted at the automotive and server application markets.
As for the PCB full-process plant, the third season is the beginning of the peak season, and the fourth season is the most prosperous season of the year. Relatively speaking, Apple’s iPhone 8 and iPhone X changed their SLP designs last year, including Xin Xing, Huatong, and Zhending are all suppliers. They will be produced by Apple in the second year of this year. The yield rate should be greatly improved. The third quarter will help to bet on profit, but due to the consumption of too many intermediate processes for the similar substrates , Forming a capacity exclusion for HDI (high-density interconnected boards); the legal person is optimistic that Tripod’s expansion last year increased by 600,000 square meters per month, which will be enough to take orders for HDI boards.
As for the PCB equipment part, the third quarter was originally the peak season for delivery. After the monthly revenue of AOI equipment factory Mude hit a high for 13 consecutive months, the general manager Chen Fusheng is still optimistic about the prosperity of the third quarter; as for Xunde and Qun In the third quarter of Yi, there was a wave of exchanges to the new factory of Jialianyi Guanyin, a semiconductor manufacturer and a flexible board manufacturer, which will significantly improve its performance.
PCB upstream raw material factories, including Lianmao, Taihong, Fuqiao, etc., have newly expanded their factories in mainland China. The investment scales all start at NT$1 billion. The main purpose is to meet high-frequency, high-speed, and safety certification with new production capacity. High-end electronic materials are the demand, and the new production capacity will be put into production in 2019. Various factories look to include demand for automobiles, 5G communications, and cloud storage servers. The biggest push behind it comes from the domestic demand trend of “Made in China 2025â€.
In addition, due to the flaring US-China trade war, China has realized that mobile phone chips, high-end electronic materials, etc., cannot be controlled by foreigners. Therefore, China has promoted the localized production plan of high-end electronic materials in China. Most of the industry believes that, Such investment is in line with the "Made in China 2025" trend, replacing imports with localized production will help fully grasp business opportunities in the huge domestic market.
Among these manufacturers, CCL plant Lianmao Electronics has the largest investment, investing up to 1.8 billion yuan in Jiangxi to expand production, expanding production capacity to respond to the growth of high-frequency material demand driven by 5G, electric vehicles and the Internet of Things. The new production capacity will be in the middle of next year. Out. The growth trend of the automotive PCB market is taking shape, and most PCB manufacturers are actively moving in this direction. However, this year includes two major obstacles, including the appreciation of the New Taiwan dollar and the lack of passive components, which have greatly troubled factories.
Taihong's Mainland China customers accounted for as much as 40% of FCCL's revenue. It invested 1 billion yuan to set up a new plant in Rudong County, Nantong City, Jiangsu Province. It is expected to be completed in the first quarter of 2019 and is expected to be put into operation in the second quarter of next year to contribute to revenue. The new plant is mainly in response to the rising demand for soft board applications such as automotive electronics, prompting Taihong to actively invest in Nantong to build new production capacity.
The automotive board market is growing steadily and is optimistic. Despite the short-term increase in raw materials and the appreciation of the New Taiwan dollar, PCB manufacturers in the industry have still not given up. The industry believes that the demand for automotive electronic boards is increasing, mainly due to the deepening of the degree of vehicle electronics, coupled with the increase in the penetration rate of automotive electronic auxiliary detection systems such as automotive radar and advanced driving assistance systems, Jingpeng has won 13% of the global automotive panels In addition, the PCB industry is also striving to obtain customer certification. Matsushita Electronics announced that it has obtained Tier1 automotive electronic system factory certification. Coupled with the rising demand for the electric vehicle market in the Mainland, Matsushita's PCB business will have double-digit growth this year.
Zhichao bought the Hitachi Chemical PCB plant in Kaohsiung, Taiwan in 2015 for 257 million yuan and independently became Zhiyu Technology, allowing Zhichao to further enter the automotive board market. Zhiyu has also recently increased its capital through cash. Based on the original market foundation, Huaibei has made a big stride in the automotive board market, which is expected to make up for the current stagnant growth of the NB board business.
3. The acceleration of 5G: or trigger a reshuffle of the PCB raw material industry chainIn addition, not only in the automotive market, but also in the consumer electronics market such as smart phones, as technology upgrades, new demands are also placed on PCBs. After the commercial launch of 5G in 2018, this revolution in communication technology will trigger A wave of PCB raw material supply chain has been reshuffled.
Jialianyi reportedly received orders for Apple iPhone FPC antennas this year, prompting its stock price to increase by as much as 70% in the short term. Jialianyi also wants to seize the opportunity to turn over through the production of this product, and immediately cut into the huge market demand for 5G communication FPC ; The market is therefore concerned. Jialianyi uses special liquid crystal material (LCP) substrates to produce flexible board antennas. Which supplier does the substrate provide?
According to the verification results, the LCP substrate of Jialianyi did not come from the FCCL factory currently listed on the market, but Jiasheng Technology, which was also established in Taoyuan Guanyin as the new plant of Jialianyi. Jiasheng has always been the flag of Jialianyi and a Japanese soft board manufacturer. The supplier of the company is not a stock listed company; even if Jiasheng is an existing supplier of Jialianyi, Jialianyi uses the soft board antenna LCP substrate to meet the needs of high-frequency, high-speed, impedance and other requirements, and Jialianyi is also Re-specify the specifications to meet the requirements of soft board antenna production.
It is reported that the soft board antenna is not a new technology. Apple iPhnoe products have also been used in the past. It is only when the wireless communication products evolve from 3G to 4G, and even the upcoming 5G communication, the product specifications are more stringent. The soft board antenna can be used. In response to the demand for higher frequency and high-speed transmission.
Jialianyi's use of LCP substrate to produce flexible board antennas is just an example. Other upstream raw material factories for PCB flexible and hard boards, such as fiberglass cloth factory Fuqiao, copper foil factory Jinju, Rongke, FCCL factory Taiyao, Lianmao, and even Taihong and others are also trying to cut into the demand for raw materials in the 5G communications field.
Taihong has not entered the LCP material market, but mainly produces heterogeneous PI (Modify PI) substrates with competitive prices. It is expected to aggressively attack the non-Apple mobile phone market from next year. Taiwan Yao is adopting a cooperative approach with Japan's Hitachi Chemical to develop another production line in Taiwan to develop copper foil substrate products for automotive radar and high-frequency and high-speed communications. It is expected to enter mass production by the end of this year.
The global high-speed and high-speed 5G communication era has entered a countdown stage. Head-end equipment manufacturers and terminal handheld device manufacturers are all fighting for business opportunities. Even the change in market demand in the 5G communication era is likely to detonate a major wash in the raw material supply chain. The significance of the positive actions undertaken by upstream PCB manufacturers is also to prevent themselves from facing the pressure of being eliminated due to the rapid generation of products that cannot keep up with the industry trend.
From the perspective of this environmental protection policy, it will undoubtedly have a serious impact on many small and medium-sized manufacturing enterprises, and even suspend production and shut down. However, from the perspective of China's manufacturing industry, this is an inevitable process that will be faced in this round of reshuffle. , Many companies will be forced out, which can be said to be good news for large companies. Under the strong pressure of environmental protection policies, more companies are destined to go out in the future. As far as the industry is concerned, the trend of centralization of production capacity will also be further enhanced, which will benefit leading companies. Especially after the arrival of the automotive market and 5G, this pattern, or the advantages of leading companies, will play a greater role.
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