Some netizens broke the news that a number of PCB material suppliers intensively issued price adjustment notices this week, saying that because of the rise in aluminum prices, copper foil and raw material prices, they were forced to increase the price of their products.
According to the date on the price adjustment letter, the first material supplier to issue the price adjustment notice was located in Jiaozuo, Henan.
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On May 11, Jiaozuo City Hechuangda Electronics issued a price adjustment notice for sheet metal, saying that the price of raw materials such as copper and aluminum has risen steadily with the resumption of production, which has caused the company's costs to rise sharply. Due to the excessive cost pressure, it was decided to increase the prices of all board materials by 3 yuan / square meter from now on.
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The next day, five other material suppliers issued letter of price increase. On the whole, the reason for the price increase is because the price of aluminum, copper foil and raw materials have risen sharply, which has caused the company's cost to rise. Due to cost pressures, it is decided to adjust the product price. It is reported that there are far more companies that have raised prices recently.
The position of raw materials in the PCB industry chain
The editor of International Electronic Business Information understands that the upstream of the PCB industry chain is PCB raw materials, including copper clad laminates, copper foil, copper balls, prepregs and other substrates.
Among the raw materials, copper clad laminates are also used as the core substrate for PCB manufacturing, so they have certain bargaining power in the PCB industry chain.
Taking PCB manufacturer Shennan Circuits as an example, the cost of raw materials accounts for more than 40% of its annual revenue, which shows that raw materials have a certain degree of influence on the gross profit margin of PCB companies.
Price increase factor
What factors caused the price increase? Some industry believes that the reasons for the intensive price increase of many raw material suppliers, in addition to the domestic resumption of work mentioned in the notice, there are more stringent environmental protection, overseas epidemic situation, 5G construction on the increase in raw material demand and changes in technical requirements, etc. To. A number of brokerage reports also mentioned that 5G demand and overseas epidemics will benefit the PCB industry.
5G
Driven by the demand for 5G communications, in 2019, a number of PCB manufacturers including Kingboard, Shandong Jinbao, Weilibang, Zhejiang Yuanji New Materials and other PCB manufacturers issued price adjustment notices.
In December 2019, Kingboard, the world's largest supplier of copper clad laminates, said that in view of the long-term maintenance of raw materials for copper clad laminates and the high production costs of the factory, in order to maintain the company's reasonable profit margins, the company will take orders from December 11, The sales prices of all materials are adjusted as follows: FR-4 (40 * 48) is up 10 yuan / sheet; CEM-1 / 22F (40 * 48) is up 5 yuan / sheet; PP (150 meters) is up 100 yuan / roll. The industry has also heard news of the company's price increase.
In addition to communications, industries including consumer electronics, automobiles, and the Internet of Things are all large-scale 5G terminal markets, which have driven the increase in demand for PCB raw materials. With the gradual landing of 5G commercial, the demand for various terminal products will become the growth point of the PCB raw material industry.
Outbreak
A number of brokers pointed out that due to the epidemic, the increase in traffic will also play a certain role in promoting the demand for upstream PCBs. China, as a major PCB producer, accounts for more than 60% of the global share. It is expected that this outbreak will continue to expand the Chinese PCB market Share, the corresponding PCB manufacturers will usher in a wave of good news.
Environmental factors
Because of the many links involved in electroplating, etching, printing, etc., PCB and related electroplating companies have become the key areas of environmental supervision.
A report pointed out that due to the tightening of national environmental protection policies, the supply of copper foil has shrunk. Therefore, since 2016, the price of copper clad laminates has followed the price increase of copper foil products. At the end of the same year, the world's major copper clad laminate manufacturers have successively raised prices. Monolayer announced six price increases in 2016 alone.
After that, the news of the bankruptcy of the PCB factory was inseparable from three reasons, one was the severe loss of funds, the second was the increasingly severe living environment due to environmental protection issues, and the third was the rise in the price of PCB materials.
In fact, there are more than 1,500 domestic PCB companies, most of which are small and medium-sized enterprises. As the largest PCB production base in China, the Pearl River Delta region also encountered environmental protection in 2019, and more than 1,000 companies were ordered to rectify.
Small and medium-sized PCB companies that comply with environmental standards have withdrawn due to rising raw material prices, macroeconomic recession, increased market competition, and rising labor costs, which have led to narrowing profit margins.
