Update on Upstream Materials for PCBs: Mitsui Copper Foil Continues Expansion / HVLP4 Shows Strongest Certainty
Leading companies in fundamentals: Copper Crown Copper Foil, Zhongcai Technology, Feilihua, DAZU CNC, Dingtai High-tech, Chip Microelectronics
(1) Mitsui Metals: Third increase in HVLP copper foil expansion plan for 2025 – Continuously exceeding expectations of high prosperity
① Mitsui Metals has announced increases in HVLP capacity in January and August of 2025. According to the August expansion announcement, its HVLP output will increase from 580 tons/month (China TW + Malaysia) at the beginning of 2025 to 840 tons/month by September 2026.
② This time, Mitsui has decided to establish a monthly production system exceeding 1000 tons of HVLP in advance, which is about twice that of early 2025.
(2) Q fabric expectations are gradually becoming clear:
① Currently confirmed usage scenarios include Rubin 144 CPX + Midplane, 1.6T switches.
② Two leading domestic companies are providing shipment guidance to Taiguang for next year, both in the range of several million meters per year. All parties have verified this.
③ Assuming one company ships 6 million meters, it is estimated to correspond to 13E revenue and 6E profit.
④ Looking at whether the orthogonal backplane can accelerate (expected to ramp up in 2027).
(3) High production difficulty and low yield, supply-demand gap will be tight in the first half of next year:
① From the supply perspective, the shipment growth rates of HVLP4, second-generation fabric, and CTE fabric are slightly lower than expected, mainly because improving yield takes time.
② From the demand perspective, applications for HVLP4 copper foil (Rubin, AWS T2.5/T3, Google V3) and second-generation fabric (Rubin, Google V3) are clear.
③ It is estimated that in the first half of next year, the supply-demand relationship will be the tightest for copper foil and fabric.