First, the price of copper clad plate rose, the secondary market rose by the limit

Copper clad plate ushered in the first price increase this year, leading company Kingboard Group issued a price increase letter on March 19: affected by the sharp rise in copper prices, forced by cost pressure, the company increased the price of all materials 10 yuan/sheet, is expected to increase the price of 5%-10%.

In the secondary market, affected by this news, the main composite materials such as copper clad plates and bonded sheets and their products in South Asia new materials hit the daily limit of 20CM on Wednesday. Hongchang Electronics, whose main business is the production and sales of electronic-grade epoxy resin and copper-clad plates, closed on Friday for 3 days and 2 plates.

Second, AI server is an important downstream application of high-speed copper clad plate

AI server is an important downstream application of high-speed copper clad plate, is expected to maintain rapid growth in the next few years, the industry pointed out that the CCL consumption of AI server is about 8 times that of the general server. The Nvidia AI server is expected to further increase the CCL usage after the 2H24 upgrade to the B100 solution.

Copper clad plate (CCL) is the main raw material for the preparation of PCB, according to the health Yi Electronics prospectus, the cost of copper clad plate accounted for 25% of the total cost of PCB. Copper clad sheet can be divided into rigid and flexible two categories according to mechanical strength. According to Prismark, in 2022, the proportion of special and special copper clad plates (including high-frequency, high-speed, IC packaging substrates, etc.) in the world has increased to 30%, and it is expected to continue to grow with the development of high-end demand such as downstream AI, automotive electronics, and 5G.

According to Prismark, among the top 23 rigid copper-clad plate manufacturers in the world in 2022 sales, there are 7 domestic enterprises in China, and domestic enterprises and Taiwan enterprises account for 23.4% and 31.3% of the total sales of rigid copper-clad plates, respectively. In 2022, among the top 13 special rigid copper clad plate manufacturers in the world, there is only one domestic enterprise, Shengyi Technology, and domestic/European and American/Japanese enterprises account for 5%, 9% and 26% of the total sales of special copper clad plate, respectively. It is worth noting that China mainly produces low value-added ordinary copper-clad plates, and high-end copper-clad plates still need to rely heavily on imports.

In 2023, the overall growth rate of the PCB industry is -15%, affected by the low PCB prosperity, the price of the copper clad plate industry is at a low level, and some manufacturers have serious losses. In 2024, PCB industry as a whole downstream demand has recovered, the current major CCL manufacturers in the first quarter of the operation rate has increased, and the recent copper price upward, CCL plant price increase power is obvious, Zhongtai securities electronics team believes that CCL is expected to enter the dilemma reversal, into the price repair stage.

AI east wind gradually, PCB/CCL depth benefit. At present, AI demand is rising rapidly, AI servers and switches are expected to show high double-digit growth in the next few years, of which PCB/CCL value is high, technical barriers are deep, and relevant stocks are expected to usher in a new round of growth opportunities. In addition, the traditional PCB/CCL industry is at the bottom of the cycle, with the macroeconomic recovery, consumer electronics is expected to recover in 2024, and the industry chain manufacturers are expected to return quickly.