The three major barriers to high frequency and high-speed copper-clad laminates determine the market pattern:
- The process technology is complex and the industry has a high threshold;
- The material link and processing link have a long certification cycle, many steps, and obvious thresholds;
- Diverse downstream demands, customized requirements determine the threshold of proprietary formulas.
The threshold determines the pattern of my country’s market: traditional CCL production has overproduction, high frequency, and high-speed CCL production capacity is insufficient, and a large number of imports are still needed.
Rogers and Panasonic have long-term monopoly competition in the high frequency and high-speed CCL market.
The domestic traditional CCL production is surplus, and the high frequency and high-speed CCL production are insufficient.
A large amount of imports is still needed, and there is ample room for domestic substitution.
Since 2016, the import volume of my country’s CCL has been declining, while the import amount has increased, indicating that the supply of domestically made high value-added CCL cannot meet the demand for end products.
However, after the “ZTE Incident”, in order to reduce its dependence on American suppliers, Huawei took the initiative to reduce the purchase of high-frequency materials from Rogers, giving Huazheng New Materials, ZhongYing Technology, and other manufacturers that can produce the benchmark Rogers domestically to replace space.
5G drives the rapid growth of high frequency and high-speed copper clad laminates. The three major characteristics of 5G construction:
- MassiveMIMO technology;
- The construction of micro-stations will increase the demand for high-frequency and high-speed copper clad laminates.
Among them, millimeter-wave (30-300GHz) determines that the base material of copper-clad laminate must be high-frequency copper clad laminate to meet the frequency band requirements.
Millimeter-wave requires more macro base stations, which in turn increases the demand for high frequency and high-speed copper-clad laminate; the introduction of Massive MIMO technology means that more high-frequency copper-clad laminates will be used for antenna elements and feeder network systems.
Among them, the number of side antenna units will reach 32/64/128/256 or more, which will stimulate the accelerated release of high-frequency copper-clad laminates; however, in order to solve the insufficient signal coverage of the 5G core, a large number of new ones that are different from traditional macro base stations will be added. The tiny station stimulates the overall demand for high-frequency and high-speed copper-clad laminates in all directions.
The leading high-frequency and high-speed copper-clad laminate company has achieved the benchmark Rogers, and will grow again and wait for 5G support; the production capacity of copper foil for high-frequency and high-speed substrates is less, which will force structural adjustment of the industry.
Shengyi Technology, Huazheng New Materials, and ZhongYing Technology have all key products to achieve the benchmark, Rogers. Among them, the first phase (1 million) of Shengyi Technology’s annual output of 1.5 million square meters of high-frequency copper-clad laminates was completed in 2018. Its product prices are lower and the delivery cycle is shorter than Rogers.
China’s copper foil industry also presents low-end overcapacity, high-end copper foil production capacity has not yet been formed, and the global monopoly structure of Japanese companies such as Furukawa Electric, Mitsui Metals (16.8% market share in output value), and Nikkei remains unbroken.
The copper foil output of China has accounted for more than 50% of the global output in recent years, but high-end copper foil still relies on imports.
Although the import volume has been declining in recent years, the import share is still around 30%.
In the context of domestic substitution and the explosive growth of upstream high-frequency and high-speed copper-clad laminates, it will stimulate leading enterprises to upgrade their technology and adjust their production capacity structure.