The price of key part CCL rises and PCB production costs increase
The world's second-largest copper clad laminate (CCL) manufacturer, Shengyi Technology Co., Ltd. (SYTECH) based in Mainland China, has demanded a price increase of 5% or so for different materials since September, thus firing the first shots among the wave of price hikes of key parts in the traditional peak season for electronics industry.
CCL is one of the key raw materials for printed circuit boards (PCB), and no other material can be used to replace it. SYTECH led the price increase, revealing strong market demand. EMC, ITEQ and TUC, three CCL enterprises in Taiwan, will usher in a good peak season effect, which will affect the market of PCB.
The global electronics industry has been very cautious in purchasing this year. Key components in hot pursuit last year such as panels, memory, semiconductor silicon wafers have lost their popularity and their prices have been pulled back. It is understood that SYTECH raises the price mainly because the 5G infrastructure in mainland China has driven Netcom's demand for CCL to increase, which is the first key component to raise the price in the recent peak season of the electronics industry. The industry has proved that SYTECH will raise its price in South China in September, first targeted at second-tier mainland-funded PCB manufacturers. It is also planning to raise prices for some customers in East China. It reveals that in response to the strong market demand, SYTECH begins to “supply selectively” and those companies in a small size have to pay more to get the supplies. By this way, it puts the focus on serving long-term customers to reduce the payment collection risk.
Taiwan CCL manufacturers are paying close attention to the changes of market price. EMC revealed that there is a large demand during the traditional peak season these days; and ITEQ said that benefiting from the gradual increase of the scale of medium and high-end products, there are large orders for the whole industry in the peak season this year.
The industry points out that Kingboard Holdings and SYTECH are the world's top two CCL manufacturers, while NANYA ranks third in shipment. Kingboard Holdings was still number one in the world in output value in 2017, but from the performance of 2018, its gap with SYTECH has been narrowed by about 1% in market share.
According to Prismark, at the end of 2017, CCL world market of Kingboard Holdings accounted for 14%, ranking first, followed by 12% of SYTECH, 12% of NANYA, 8% of Panasonic, 6% of EMC, and 6% of ITEQ. As for Goldenmax, TUC, Doosan and Hitachi Chemical accounted for about 4%, respectively.
The medium and advanced materials supplied by SYTECH for Netcom account for a larger proportion. Due to the acceleration of 5G infrastructure construction in mainland China and industrial changes recently, it begins to supply selectively and raises the price of some materials.
The price rise of CCL affects the costs and the supplies of materials for PCB manufacturers, which has attracted great attention of the PCB sector. The world's leading PCB company, Zhen Ding-KY, said that it is actively striving for expansion of the material supply from SYTECH. From the analysis so far, it has little impact.
Tripod said that it has a large amount of purchases. Compared with other small manufacturers, it should be free from the impact of the price rise of the raw materials. In addition, currently a large market demand for HDI, full utilization rate of Tripod’s capacity, large numbers of customers waiting for goods, and the depreciation of RMB help the company improve its gross profit margin.
Other PCB manufacturers mentioned that the price of some products of SYTECH was lower than that of its rivals in the past, so its current price rise mainly reflects the market mechanism. However, due to many variables in the economy at present, the price rise is still subject to the coordination of buyers and sellers.
As a key raw material for PCB production that cannot be replaced by other materials, CCL accounts for more than 30% of PCB production costs.
PCB is known as the "mother of the industry", and CCL, which plays a key role in PCB production, has also become the key to the circuit connection design of 3C electronics. The wide application of PCB to auto electronics, netcom bases, laptops, information equipment, mobile devices, phones and other fields, coupled with the active promotion of 5G infrastructure in major countries around the world, takes the lead in driving the growth of the demand for medium and advanced CCL materials.
Citing from: PCBWORLD-The price of key part CCL rises and PCB production costs increase
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