[PCB Information Network] After a period of silence, there was news of a price increase for CCL.

As we all know, PCB is the "mother of electronic circuits". The downstream mainly includes consumer electronics, automotive electronics and communication equipment, as well as computers, industrial control medical, aerospace, etc. PCB upstream raw materials are copper clad laminate (CCL), prepreg (PP), copper foil, copper ball, etc. Copper clad laminate accounts for about 37% of the cost and is the most important PCB raw material. Other raw materials such as prepreg account for 13% of the cost, gold salt accounts for 8% of the cost, and copper foil and copper ball account for 5%.

Electronic copper foil, glass fiber, and resin are the main raw materials for copper clad laminates, of which copper foil costs account for 30%-50%, glass fiber cloth costs account for 25%-40%, and resin costs account for 25%-30%. The price increase of upstream materials has a great impact on the cost of copper clad laminates.

In fact, PCB manufacturers often face rising raw material prices in recent years, but they always seem a little apprehensive and hesitant to raise prices.

Why can copper-clad laminate manufacturers increase prices so hard?

Because the CCL link has a higher degree of concentration and stronger bargaining power.

It is understood that in 2021, the market share of rigid CCL manufacturers will be as high as 55%, while the top five PCB manufacturers will only have 29%.

PCB products are negotiated one by one, and are constrained by processing time and order rhythm, so there is a time lag in transmitting prices to terminal manufacturers. The pricing of copper clad laminates is more flexible, and it is easy to negotiate prices with PCB links and obtain considerable profits.

Taking 2016 as an example, since the second half of the year, the prices of the three major raw materials of copper foil, resin, and glass fiber cloth have all risen sharply, and the gross profit rate of some large copper-clad laminate manufacturers has risen instead of falling. The main reason is that the company has timely increased the sales price.

In general, for the copper clad laminate segment, if the upstream price increases, it can drive up product prices and bring about performance flexibility. At the same time, the increase in downstream demand can also lead to price increases.

Zhou Hua, chief analyst of CINNO Research, said in an interview with a reporter from the Financial Associated Press that starting from late May this year, the price of major raw materials such as copper foil, epoxy resin, and glass fiber has risen, which is the core driving force for the price growth of copper clad laminates.

Although the demand side of copper clad laminates has picked up, it has not shown a trend of rapid growth. When it comes to the overall shipments, some manufacturers said, "From the perspective of copper clad laminates alone, there are no particularly large fluctuations."

Some major CCL manufacturers have not yet adjusted their prices.

However, PCB, a downstream customer of copper clad laminates, has entered the second half of the year to destock, and demand has picked up and recovered quarter by season. In addition, with the weakening of the macro impact margin and the steady recovery of overall demand, with the addition of servers and data centers, automotive electronics, and AIoT (smart earphones, smart watches, AR/VR, etc.) emerging applications and technological upgrades, PCB output value is expected to grow steadily.

Prismark predicts that the global output value will reach 101.6 billion US dollars in 2026, and the CAGR will exceed 5% in 2022-2026. Benefiting from the continuous iterative upgrade of downstream application technical specifications, the requirements for circuit boards have also been continuously improved, and the output value of PCB downstream mid-to-high-end products such as HDI and packaging substrates has increased significantly.