Reading time ( words)
As a leading Chinese CCL manufacturer, Shengyi Technology has invested 250 million RMB in 2016, for the new Jiangsu Shengyi Special PCB Co. Ltd. facility, which will make high-frequency, high-speed CCL product. We invited Lin Xia, senior marketing director of Guangdong Shengyi Technology Co. Ltd., and assistant general manager of Suzhou Shengyi Sci-Tech Co. Ltd. He will be focusing on why high-frequency high-speed CCL is a good opportunity for China manufacturers to become a worldwide leader in this arena.
Tulip Gu: As CCL suppliers, what is the biggest challenge you have encountered in high-speed material production and R&D?
Lin Xia: The advent of 5G in 2020 and future ICT technology trends will make data storage, transmission and computing experience explosive growth. The demand for high-speed, high-frequency material will also grow. For high-frequency material, the main application will be wireless transmission and reception that contains a huge amount of data, and network signal coverage.
Base-station wireless signal transmitting and receiving frequency has been increased from the old, sub-3 GHz to 6 GHz range. To meet the demand of point-to-point transmission, the frequency of supporting coverage network has reached 28 GHz and 39 GHz or even higher into the millimeter wave frequency band. Automotive radar application has reached 76−81 GHz millimeter wave band. The main challenge in high-frequency application R&D is to achieve stability, ultra-low loss. Through strict process control and a quality assurance system, we can ensure product consistency. In the meantime, in multilayer board design, we have to take into account the substrate thermal conductivity and processability.
Today, more and more substrate manufacturers are entering the high-speed material sector; the competition is getting more intense. There are so many products in the market, but good quality high-speed product is not that simple. Because the application is very different for high-speed, high-frequency material, the adhesive technology, performance design, manufacturing process, quality control, testing methods and supply chain management are quite different from traditional FR-4 products.
The traditional way of thinking in R&D and product management is a model that should be avoided. From a product development point of view, to develop product that meets market demand is not an easy task; it reqiures technical capability, continuous innovation, capital investment from the company, and a strong market validation and development team. From a marketing point of view, the one who has the most advanced technology will dominate market opportunities.
The biggest challenges we have encountered in high-speed, high-frequency material R&D and manufacturing are the formulation technology in product technology, such as product cost design; performance design; corresponding product manufacturing process technology; quality management. Additionally, high-frequency, high-speed material will ask for much better performance from supply chain management in the future. How to optimize and integrate supply chain resources to achieve mutual growth will also be an important issue for high-frequency, high-speed material.
Gu: How do you see the trends of China's high-frequency, high-speed PCB market in recent years? Such as product applications, technology updates, process improvement?
Lin: China's high-frequency, high-speed PCB market development is closely related to the global market. It is, and will always be, an important part of global electronics manufacturing and consumption. Shengyi Technology has been planning for the high-frequency, high-speed market for 15 years. Back then, we were still in the technology accumulating phase. We continued to keep up with global PCB technology trends and technology. Of course, high-frequency, high-speed PCB market is only one part of what we are tracking.
The ever-changing market in recent years has proved that only independent R&D with constant improvements in process, technology, quality, business management and continuous innovation will pay out. We admit that there was some distance between Chinese and Japan and U.S. manufacturers, but it has been shrinking in the past 10 years. Today, this distance is little; in some technology field and products, we have surpassed Japanese and U.S. manufacturers, posing a serious threat to their once dominant market.
Market demand is constantly changing, product application continues to refine, along with new processing, and supporting technology innovations will make us change. This is just the reason we are still insisting on independent R&D and innovation. We keep track of any market changes. We value every single customer feedback of new demands. We also thank Japanese and U.S. manufacturers who are competing with us and set obstacles for us. The world is always changing and developing; the only thing that is constant is change, and China's high-frequency, high-speed PCB market is also changing.
Gu: In this area, what is the main advantage of Chinese companies? Will this advantage provide global competitiveness?
Lin: The PCB and CCL market is an area where international competition takes place. To some extent, since the reform and opening policy, China's domestic market has grown to the largest electronics manufacturing and consumer market in the world, with a huge market demand. Therefore, the biggest advantage of Chinese industry is overall industry chain that was developed over decades of technology accumulation and market cultivation.
The Chinese electronics industry is well experienced in international competition. We have also experienced a number of industry development cycles. The Chinese electronics industry experienced almost 10 years of rapid development after 2000, which is related to the world economy and global semiconductor development trends.
Of course, we are also aware that China's development in recent years is different from 10 years ago (before 2008). In 2000, the global manufacturing industry, including the electronics industry, was moving to mainland China. Back then, China's main advantages were a huge market potential, low labor costs and government reform and opening economic policy. Today, the advantages of China's demographic dividend are disappearing; environmental protection and other policies and regulations have become tighter, although China is still an important growth point of world economy, to the extremely cost sensitive manufacturing industry. Labor costs and regulations will seriously affect the whole Industry, including CCL, PCB and supporting sectors.
In recent years, the entire electronics industry, especially the PCB manufacturing industry, is moving to Southeast Asia and India. The Trump administration also wanted to "bring manufacturing back to the U.S.," hoping that real economy could support the U.S. economic development. This will have some impact on China's electronics industry and manufacturing, but mainland China has been the global electronics manufacturing base for 30 years; I am afraid it is not that easy to change.
Mainland China still owns more than 65% of global PCB market share in 2016, and maintains a growth rate above 7.5%. In terms of high-frequency, high-speed, China's biggest advantage is that Chinese companies have been breaking through in some cutting-edge technology and industry, challenging Europe, U.S., Japan and other developed countries which are dominant in technology and market for decades. We will stick to independent R&D, domestic production, use domestic supply and provide our customers with professional, high-quality technical support and supporting services. China is actively developing a semiconductor industry, according to China's strategic policy. Dominant in semiconductor industry dominates the entire electronics industry.
In this context, Chinese companies are actively doing industrial transformation and upgrading and have achieved some results. They are going upward from the low value-added competition. In the future, Chinese companies will continue to maintain their leading position in top-level global manufacturing competition. Among them, of course, is high-frequency, high-speed.
Gu: Do you think there will be a better way for PCB manufacturers and material suppliers to work together?
Lin: PCB manufacturers are our direct customers. They make direct requirements for substrate processing and usage. In the fierce competition of material suppliers, PCB manufacturers will also take material lead time, cost, service and other comprehensive factors into consideration.
High-frequency CCL is important to national economy; Chinese CCL had been restricted by overseas enterprises, who built technology barriers and dominated the market. Foreign advanced technology companies are also leading in the high-end market. In 2015, high-frequency CCL was included in the Ministry of Industry's "Project of Strengthen Industrial Development at the Grassroots Level" special action. Based on industry development trend and overall strategic requirements of the country, Shengyi Technology, as a Chinese electronic circuit substrate industry leader, has the responsibility to be actively involved in high frequency CCL. To do so, Shengyi has invested in "Jiangsu Shengyi Special Material Co. Ltd." It will provide competitive high-frequency CCL and product solutions for PCB manufacturer and end customers. The competition in high-speed product is more intense. Like high-frequency material, high-speed material needs end customers to be involved in R&D from the beginning; once a design is finished, the key indicators must be consistent. If not, it is not possible to find an alternative, to pass customer qualification and product applications.
PCB manufacturing is an important part of electronics industry. As a carrier of semiconductors and integrated circuits, PCB manufacturers and material suppliers have similar interests—both parties need to work with each other, trust and support each other, build strategic and long-term cooperation and development relationships. Both parties should enhance basic technology and process R&D and focus on new material application research in cutting-edge technology and material. Especially, high-frequency, high-speed material needs PCB manufacturers to have technical accumulation on basic materials research and processing technology. Material suppliers will also provide technical support for PCB manufacturers through product improvement. Stick to customer demand-oriented development, strengthen terminal market development and cooperation, to achieve healthy ecological system development. Shengyi is a responsible Chinese enterprise, and we provide cost-efficient product and excellent service to our customers.
Tulip Gu is executive editor with I-Connect007 China.