PCB, or Printed Circuit Board, can be considered the infrastructure of all semiconductors, often referred to as the mother of electronic products. It is utilized in new energy, AI servers, and 5G base stations, and will also be essential for the future proliferation of satellite communications. However, many still claim that circuit boards lack technical content. Today, we will discuss which part of this industry chain holds the most value and which representative companies exist in each segment.
Basic Information
PCB connects electronic components such as chips, resistors, and capacitors, allowing electronic devices to function properly, similar to how a city’s road network connects work areas, residential areas, and commercial areas. The essence of PCB is a flat printed wire circuit.
As chip performance improves and the number of electronic components increases, flat wiring layouts are no longer sufficient. This has led to the development of multilayer boards and high-density wiring boards, making PCB comparable to elevated highways in a city.
The PCB industry chain is mainly divided into three major segments: upstream raw materials, midstream PCB manufacturing, and downstream applications.
Upstream Raw Materials
The upstream segment is the technological foundation and cost core of the entire industry chain, holding the highest value, with gross profit margins generally reaching 40%-60%, and is currently a key battleground for domestic substitution.
In terms of value, it can be divided into several categories: copper-clad laminates, copper foil, and fiberglass cloth.
Copper-clad laminate, or CCL, is the core substrate for making PCBs, holding the highest value, accounting for 30%-40% of PCB material costs. It is primarily made from raw materials such as copper foil and resin, determining the PCB’s signal transmission speed, mechanical strength, and thermal conductivity.
Currently, the global high-end copper-clad laminate market is dominated by the US and Japan, while the mid-to-low-end copper-clad laminates are led by China, accounting for over 60% of global production. Rogers Corporation from the US is a representative of high-end copper-clad laminates, leading in high-frequency materials with a market share exceeding 50%. Cutting-edge industries such as AI servers require specific grades of copper-clad laminates. Japanese players include Panasonic and Hitachi Chemical, with Panasonic Electric’s Megtron series. Domestic company Shengyi Technology represents China’s high-end copper-clad laminate level, with products like the M6, M7, and M8 series.
Mid-tier players include Kingboard Laminates and Nanya New Material, while domestic low-end players include Jinan International and Huazheng New Material.
Copper-clad laminates also consist of three main materials: copper foil, resin, and fiberglass cloth.
Copper foil, as a conductive medium, accounts for about 40% of the copper-clad laminate’s value. To meet high-frequency and high-speed signal transmission needs, ultra-low profile (HVLP) copper foil is the future technological direction, with increasingly lower surface roughness requirements. The high-end copper foil market is mainly dominated by Japan and South Korea, while China focuses on mid-to-low-end copper foil. Major listed companies include Jiayuan Technology, Nord Holdings, and Tongguan Copper Foil.
Next, let’s discuss specialty resins. Common transparent epoxy resins are insufficient to meet high-frequency and high-speed demands, requiring PPO resins and hydrocarbon resins to provide better dielectric performance. This is a technical bottleneck and a key focus for domestic substitution, with representative players including Shengquan Group and Dongcai Technology.
Finally, fiberglass cloth, as a reinforcement material, provides mechanical strength and dimensional stability.
Reinforcement materials account for 25%-30% of the copper-clad laminate’s cost, affecting the PCB’s mechanical strength, heat resistance, and dimensional stability. Currently, China accounts for over 60% of global fiberglass cloth production, and high-frequency and high-speed applications require low dielectric constant (Low-Ok) electronic cloth, or even better-performing quartz fiber cloth. Major listed companies in this segment include China Jushi and Honghe Technology.
Manufacturing Equipment
Without advanced manufacturing equipment, it is impossible to produce PCBs that meet high computing power demands. Specialized equipment generally includes drilling, lamination, and testing equipment, which directly determine the precision level of the manufacturing process.
The domesticization rate of high-end equipment still has significant room for improvement. Major domestic players in this segment include Han’s Laser, Han’s CNC, and Chipbond Technology, and this industry is also referred to as the “shovel sellers” of PCBs.
Due to the length of this article, we will discuss the mid-to-lower stream content tomorrow.
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