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Update on PCB Electronic Fabric and Copper Foil 20251126_Overview
Summary
This discussion focused on the latest developments in the field of new materials, particularly analyzing the dynamics of companies and institutions such as Google and Mitsui Metals, and exploring the impact of new materials on the supply chain structure. Experts discussed the trends of CCL models and upstream materials in Google’s supply chain, as well as interpretations of Mitsui Metals’ statements, while also paying attention to the production capacity, price fluctuations, and market demand forecasts for new materials.
Q&A Review
Q: What specific ordinary materials has Google updated on its servers?
A: The ordinary materials updated on Google’s servers are a hybrid laminated structure of Ma8 and Ma6, with the electronic fabric being a second-generation fabric, and the copper foil grade being HVLP2, a standard grade, primarily supplied by Panasonic and Taiko.
Q: What is the current market share situation for Panasonic and Taiko?
A: The approximate market share for Panasonic and Taiko in GPU and UVB is: Taiko accounts for 60%, and Panasonic accounts for 40%.
Q: Regarding the issues mentioned in Mitsui’s official clarification announcement yesterday, what is the specific situation?
A: The issue Mitsui encountered was primarily the separation between the resin layer and the copper foil, leading to board explosions. This was due to Mitsui using a specific trace element plating process after handling round copper to ensure heat resistance and bonding strength, but during the process or storage, the rough surface plating layer failed. Currently, Mitsui has stopped using the related copper foil, and it is temporarily impossible to revoke the supplier qualification. Mitsui has been given a timeframe of three months to propose a reasonable solution.
Q: How should we interpret Asahi Kasei’s announcement regarding production changes?
A: Asahi Kasei’s current main business focus is on Q fabric, but it has learned that the willingness to expand in the Japanese market is relatively weak, while domestic manufacturers such as Honghe and Taishan are significantly expanding. Asahi Kasei will reduce the production of Q fabric glass cloth and focus more on Q fabric models used in subsequent AI servers, while also shifting some capacity towards low-CTE glass cloth. The 1078 model of this glass cloth will no longer be produced, focusing instead on models 1037, 1035, and 1027, etc.
Q: What is the background for Asahi Kasei’s adjustment of glass cloth production plans?
A: The background for the adjustment is clear: one is aimed at future advanced packaging technology upgrades, such as the COSWOS technology driving the demand for CPU and storage to be bare packaged together in AI servers, which requires a large amount of low-CTE glass cloth; the second is that Q fabric has poor processing performance, and production yield has decreased, failing to meet NVIDIA’s demand for extreme performance, thus shifting towards other higher-performance products.
Q: Regarding market expectations for the development of the AI field, if NVIDIA shifts to Google, will this exacerbate the shortage of second-generation fabric while the shortage of Q fabric weakens relatively?
A: Currently, Google’s plans mainly focus on first-generation and second-generation fabrics, without explicitly mentioning Q fabric. If Google uses Q fabric on a large scale, the demand for second-generation fabric may significantly increase. However, Google has not yet provided a clear preliminary plan.
Q: What is the overall monthly supply and price elasticity situation for several companies such as Taishan, Honghe, and two Japanese manufacturers next year?
A: Taishan’s production capacity next year is expected to be about 300,000 meters/month, and the estimated monthly supply of second-generation fabric from domestic manufacturers like Honghe, Taishan, and international composite materials is about 1.2 to 1.3 million meters. Nitto’s supply is about 200,000 to 300,000 meters/month. Additionally, Taiko’s second-generation fabric has not yet passed evaluation.
Q: Have Jiantao and Guangyuan’s second-generation fabrics been certified, and what is the current market situation?
A: Currently, Jiantao’s second-generation fabric has not been evaluated, and Guangyuan’s second-generation fabric has also not passed certification.
Q: What is your judgment on the market demand and price for second-generation fabric next year?
A: The main application of second-generation fabric next year is to match Ma8 materials, and the conservative estimated demand will be around 3 million square meters per month, with the prices of raw materials like copper foil and glass cloth likely to continue rising next year.
Q: What is the situation with Google’s HVLP4 pairing?
A: Google’s plan includes Ma8 plus second-generation fabric, as well as two options of HVLP2 and HVLP4, where HVLP2 has been confirmed, but HVLP4 is still pending.
Q: What is the startup time and growth rate of material demand for companies like Google and Amazon?
A: Google expects significant demand growth in the second quarter of next year, while the startup time for Amazon and Meta is currently unclear, but Amazon may show some performance early next year.
Q: Regarding the mainstream market view that Mitsui is the oldest player, if Mitsui encounters some issues, will this provide opportunities for other companies? What is your view on this issue?
A: In fact, companies like Mitsui and Asahi Kasei, due to their large market share and use of the latest technology, may encounter relatively more issues at the application end. However, this also means that they will continuously solve problems in the process of accumulating experience and improving technology. Meanwhile, domestic manufacturers like Tongguan and Defu can also produce high-end products, but their current output is small, and yield control is their main risk. Tongguan’s quality inspection frequency is very high, leading to a significantly lower yield compared to Mitsui.
Q: Can Mitsui’s market share in HVLP4 be understood as occupying about half?
A: Yes, that can be understood. Currently, Mitsui occupies at least one-third of the market share in HVLP4.
Q: Is there clear information indicating a 20% price increase expectation in the first quarter of next year? Has Apple recently signed cooperation agreements and locked orders?
A: Currently, there is no concrete data supporting that the price increase will reach 20%. Price increases are inevitable, but the possibility of a 20% increase is low, with expected increases in single digits. Apple is indeed negotiating cooperation agreements and locking orders, but specific details such as the locking situation have not been clearly stated.
Q: What is the approximate annual shipment volume of Nitto, and are there domestic manufacturers capable of providing similar products?
A: Nitto’s annual shipment volume is about 3 million pieces. Although domestic manufacturers like Taishan and Honghe can produce, they mainly focus on small batch samples, and most still rely on a few Japanese suppliers to provide the low-CTE parts needed by Apple.
Q: What is the current price level of CTE fabric in the industry? What is your reasonable judgment on the future price trend of CTE?
A: Currently, the price of CTE fabric is between second-generation fabric and Q fabric, approximately around 150. It is believed that next year’s prices may gradually rise, with each wave of increase possibly being 10%, rather than a one-time increase of 20%, as historically, a one-time increase of 20% is rare.
Q: Is Nitto’s NEZ, which uses glass fiber to balance low DT and low DK, gradually gaining a voice in the industry?
A: Nitto’s product is indeed gradually gaining a certain voice in the industry.
Q: What are the main trends in the current market for glass cloth?
A: A clear trend in the current market is that glass cloth is moving towards narrow board development, with low CTE being particularly prominent. Some suppliers emphasize the low CTE function of the hydrocarbon resin they provide, and discussions with suppliers indicate a trend towards narrow board products in the future.
Q: What are the choices and potential challenges of Q fabric technology under current market demand?
A: Q fabric technology has been applied under NVIDIA’s demand for extreme performance, but as technology develops, if Nitto can develop a new generation of glass cloth that balances low CTE and low DK, it will be a great solution, as it aligns with multiple technological trends, including advanced packaging. However, Q fabric technology may encounter processing difficulties in the production of high-layer PCBs, especially in AI servers supporting more than 20 layers of HDI, similar to the experience with PTFE materials, which, while having excellent electrical performance, face processing issues and may be replaced by other materials over time.
Q: How is the situation regarding the reserves of glass cloth products that balance both performances among major domestic manufacturers like Taishan and Honghe?
A: Currently, there is little information on the reserves of such glass cloth products from Taishan and Honghe. It is known that Taishan has second-generation products with better performance, but specific performance needs further testing and verification.
Q: What is your outlook on the trends and price increases for CTE and second-generation fabric from the fourth quarter to the first half of next year?
A: The trend of price increases is not limited to Mitsui; it includes products that meet the HVLP series, Jinju’s HVLP series, and Luxembourg’s HVLP3 and HVLP4, all of which have seen comprehensive price increases, approximately increasing by two dollars per kilogram. It is expected that in the first quarter of next year, Mitsui may announce plans indicating a new round of demand increase for copper foil, which may lead to a second wave of price increases, meaning that in the fourth quarter, other mainstream manufacturers may follow suit, followed by another price increase wave in the first quarter of next year.
END
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