Shenzhen Lianjincheng Precision Manufacturing Co., GmbH.
- The upstream end of the PCB industry chain is mainly copper foil, glass fiber and other raw material manufacturers. It is expected that the midstream CCL is expected to bottom out this year. PCB manufacturers wait for the demand to pick up after the inventory is digested. The expansion of production mainly focuses on high-density and high-performance PCBs. 1) Upstream: The LME copper spot price fell from US$9345.5/ton on January 27 this year to US$8210/ton on June 30, a drop of 12.15%. The market price of epoxy resin fell from the high price of 20,500 yuan/ton in July 2022 Zu 12,650 yuan/ton, a drop of 38.29%. The market price of electronic grade glass fiber cloth dropped from the highest value of 6.10 yuan/m at the end of 2021 Zu 4.04 yuan/m (as of 23Q1), a drop of 33.77%. 2) When midstream CCL bottoming is in progress, the prosperity of PCB upstream and midstream A-share targets is low, and attention should be paid to downstream demand and price increase elasticity. 3) PCB manufacturers: The production and sales of major domestic PCB manufacturers are relatively stable, while the overall production and sales of PCBs in Taiwan remain sluggish. The overall PCB inventory is under pressure, and the gradual digestion of inventory is conducive to the recovery of the PCB industry. In terms of production expansion, domestic manufacturers mainly lay out high-density and high-performance PCBs
- The profitability of PCB manufacturers is expected to increase quarter-on-quarter. We are optimistic that PCB multi-downstream drivers will enter a new round of growth cycle, and pay attention to the progress of localization of upstream materials and the performance of equipment manufacturers that are leading indicators of production expansion. 1) Consumer electronics vs FPC: With the mass production of Apple Vision Pro series products in the future, this product is expected to lead the upgrade of AR/VR user experience and drive a new round of consumer electronics innovation cycle. We continue to be optimistic about Apple’s Vision Pro’s promotion of the construction of related product lines and revenue growth for upstream supply chain manufacturers, and we are optimistic about the opportunities in the consumer electronics components & assembly and consumer electronics automation equipment sectors. 2) AI-related: According to Prismark data, the output value of server PCBs will reach nearly US$13.3 billion in 2026, with a 5-year CAGR of 11%, faster than other PCB categories. Considering that the PC segment of consumer electronics is showing a weak trend, many PCB manufacturers are actively deploying PCBs for servers. The increase in sales of AI servers will provide new opportunities for upstream core component manufacturers. ;3) Automobile panels: The new development trend of electrification, intelligence, networking and sharing of smart cars will drive the growth of the overall industrial chain. Benefiting from the drive of the “four modernizations” of automobiles, the value of bicycle PCBs has increased to about 1,200-3,000 yuan. The four modernizations of automobiles are expected to bring new slot opportunities to domestic PCB manufacturers.