Time, Space, Structure, and Model Analysis of CCL Price Increase

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Editor's note: The price of copper clad laminate (CCL) affects the whole electronics industry. Here, we invited analysts from Zhongtai Securities to analyze and forecast the current situation. The content of this article is also based on field research data of Zhongtai Securities and its researchers. This article originally appeared in PCB007 China Magazine and has been translated from the original Mandarin. 

Material prices remain firm and the supply-demand structure has improved. These are the core driving forces of the current round of price increases. 

Raw materials account for more than 80% of the cost, and the profit is greatly affected by the material cost.
According to the CCL Association, copper foil accounts for the largest proportion of raw materials (traditional CCL uses epoxy resin, glass fiber cloth and copper as raw materials). Copper foil in thin plate accounts for about 30% of the overall cost; in thick plate copper accounts for 50%. In CCL production, using Shengyi Technology and Chaohua Technology as examples, the cost of raw materials accounts for about 88% of the total cost, with labor accounting for about 4%. Other costs such as equipment depreciation account for about 8%.

The industry chain has strong bargaining power.
The CCL industry has a high entry threshold. Because of the various raw materials, precision, structure, and different production processes, suppliers need to have a higher level of technology to meet the high level of product requirements. In addition, copper clad laminate production requires higher capital expenditure, which also brings significant capital barriers. But this combination strengthens the industry as a whole. According to a Prismark ranking of global rigid copper clad laminate companies, the ranking and market share changed little in recent years, with CR10 accounting for about 70% of total market share in 2019. This gives them strong bargaining power in the industrial chain.

PCB manufacturers are not overly sensitive to price, and customers generally pay more attention to product quality, technical content, and supply stability than pricing. As a result, the PCB customers are more stable in the eyes of the suppliers, owing to the constant strength of the leading companies.

To read this entire article, which appeared in the April 2021 issue of PCB007 Magazine, click here.


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