After ten years of intergenerational upgrades, 5G has brought about dual growth in demand and value-added for PCB/copper clad materials. The IMT-2020 (5G) promotion group in China has proposed five key technologies for 5G. The ecological changes in the wireless access network equipment industry chain are significant. 1) 5G RF will introduce Massive MIMO (Massive Antenna Array) technology. Compared to 4G, the number of 5G base stations is significantly increasing. We estimate that two-thirds of the output of mobile base station antennas will be transferred to the PCB industry chain. Therefore, we estimate that the value of high-frequency PCB/copper cladding in 5G base station antennas will be more than 10 times that of 4G. 2) 5G networks will carry more broadband traffic. The investment in routers, switches, IDC, and other equipment will increase, and the demand for high-speed PCB/copper clad materials will significantly increase. In addition to the increase in demand, high-performance equipment will also adopt high value-added high-frequency (antenna) and high-speed (IDC/base station) panels, which will bring added value and consumption to the PCB/copper clad material industry chain. Increase.
5G communication equipment will become the core driving force for the PCB industry in the next three years. The PCB industry has entered a mature stage, and the traditional application market has become saturated. The key to growth depends on downstream emerging segments. Prismark believes that automobiles and communication devices will become the new engines of industry growth in the next five years. Whether it is automotive electronics (related to daily life) or communication equipment (with a single device value and a wide range of involvement), manufacturers will directly certify upstream materials for the equipment. The market for intelligent driving and new energy vehicles has developed rapidly in recent years, but the certification threshold for the automotive panel market is relatively high, especially for high value-added core components such as ADAS and energy management, which are difficult for Chinese people to achieve. Mainland manufacturers are breaking through in a short period of time. Compared to others, downstream equipment manufacturers in China's communication industry have achieved a transformation from followers of the 5G era to leaders. It is expected that 5G will achieve a more high-end upstream high-frequency/high-speed board replacement. We believe that PCB will become the core driving force for industry growth in the next three years.
5G brings localization opportunities for high-end materials from circulation to growth. Copper clad board is the main material of PCB. Copper clad laminated board products have both traditional and high-end products. Traditional products mainly include epoxy fiberglass board (FR-4 and modified FR-4) and simple composite materials (CEM-1, CEM-3). At present, the production capacity has basically transferred from Europe, the United States and Japan to Chinese Mainland; The output value of copper clad materials in Chinese Mainland accounts for 65% of the world. At the same time, high additive special material copper-clad laminates are still monopolized by foreign companies such as Rogers, Taconic, and Panasonic. Special material copper coating material generally refers to a copper clad laminated board made of a certain proportion of special resin fillers. The main filling materials include PTFE (millimeter wave radar and ultra-high frequency communication). Hydrocarbons (6GHz base station radio frequency), PPE/CE (high-speed multi-layer PCB), etc. Special material copper-clad panels have higher added value and unit price than traditional FR-4 products, so they are not affected by periodic fluctuations in raw materials. With the upcoming increase in demand for 5G and automotive electronic products, high-end manufacturers can share the growth dividends of emerging downstream fields. In the 5G era, domestic enterprises with high-end production capacity are expected to gradually break through foreign monopolies, weaken their original circular attributes, and welcome the dual improvement of performance and valuation.
The sharing of PCBs for 5G devices will be determined by "process+materials". Upstream high-end materials are important, but process and design have a significant impact on the final performance of PCB products. "Process+Material" will share the industry added value of 5G. The design process of 5G high-frequency/high-speed circuit boards requires PCB impedance control. The performance of 5G device PCBs is very high, such as the number of layers, area (large area, small thickness to diameter ratio), drilling accuracy (small hole size, board alignment), and wire (line width, line spacing). Therefore, higher technical cooperation is required in the PCB processing process.
