PCB: the mother of electronic components, China undertakes capacity transfer. At present, the output value of the global PCB industry accounts for more than one quarter of the total output value of the electronic component industry, and it is the industry with the largest proportion in each electronic component subdivision industry. The main material of PCB upstream is copper clad laminate, which accounts for 30% of the cost. The downstream industry is widely distributed, and the largest downstream application is communication equipment. Communication equipment, consumer electronics and automotive electronics account for 62% of the market share of PCB downstream applications. Developed countries have gradually withdrawn from the production of medium and low-end products. After 2000, China has gradually undertaken the transfer of global PCB industry and has developed into the world’s largest PCB producing area.
The boom of upstream raw materials is improving, and the production capacity of copper clad laminate industry is expanding. Copper clad laminate is the basic material of electronic industry and the main material for processing and manufacturing printed circuit board (PCB). We believe that since October 2020, the year-on-year growth rate of the overall revenue of the copper foil company has reached an inflection point. In August and September 2021, the growth rate of copper foil company narrowed month on month, and the year-on-year growth rate fluctuated.
The prospect of IC carrier board, automobile board and miniled board is good. As a primary packaging substrate with “technical homology” with PCB, IC carrier board usually has the technical characteristics of thin, high density and high precision. Prismark predicts that the annual compound growth rate of global packaging substrate output value will reach 9.7% from 2020 to 2025, of which the annual compound growth rate of packaging substrate output value in China will reach 12.9%. Driven by the four major trends of Internet, entertainment, energy conservation and safety, the level of automotive electronization is increasing day by day. The cost of automotive electronics accounts for 28% in medium and high-end cars and 47% in new energy vehicles. It is estimated that the global automotive FPC market will reach 7 billion yuan in 2022, with a compound annual growth rate of 7.1%. With the continuous penetration of the downstream market, the microl ED market will usher in growth in the future. According to arizton data, the global Mini LED market will grow from US $150 million in 2021 to US $2.32 billion in 2024, with a CAGR of 149.15%. According to the CINNOResearch official account, the shipment area of the Mini LED backlight substrate in 2025 increased to about 50 million square meters, with an average annual composite growth rate of CAGR reaching 72.8%.
Investment suggestion: it is suggested to pay attention to Wus Printed Circuit (Kunshan) Co.Ltd(002463) , Shennan Circuits Co.Ltd(002916) , Shengyi Electronics Co.Ltd(688183) , Nanya New Material Technology Co.Ltd(688519) , Zhejiang Wazam New Materials Co.Ltd(603186) and Shenzhen Fastprint Circuit Tech Co.Ltd(002436) .
Risk tip: capacity expansion is less than expected, downstream demand is less than expected, and raw material price fluctuation risk.
