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What crisis is facing the PCB industry under the epidemic

What crisis is facing the PCB industry under the epidemic
The current "new infrastructure" is leading the construction of 5G stations, and the second phase of the three major operators quickly promoting the procurement of 5G network main equipment has attracted great attention in the industry.
According to the bidding results of China Mobile's 5G Phase II wireless network main equipment, the total amount reached 230,000 stations, and the total purchase amount exceeded 37.1 billion yuan. Judging from the winning bids of equipment suppliers, Huawei takes the lead with 57.25%; ZTE accounts for 28.68%; Ericsson accounts for 11.45%, and China Xinke accounts for 2.62%.
In addition to China Mobile, China Telecom and China Unicom are expected to purchase 250,000 stations. According to the "tens of billions of purchase orders" for the construction of 5G stations by the three major operators, the 5G-related application industry chain will enter the development dividend period. Among them, PCB as a carrier for the connection of electronic components, manufacturers with high-frequency and high-speed PCB production capacity, will become the core beneficiaries of the new 5G infrastructure.
The communications and server markets have grown significantly
According to industry surveys, the current number of 5G macro stations in China is about 1.2-1.5 times the number of 4G macro stations. d on the calculation of the number of millions of stations in the 4G era, the scale of 5G stations will exceed ten million. At the same time, the value of a single-site PCB of 5G stations is more than 9,000 yuan, the value of a single-site 4G station is less than 4,000 yuan, and the value of single-site PCBs has increased by about 2-3 times.

Driven by 5G stations, the market demand for high-end communication PCBs continues to expand, and it also brings considerable benefits to the head manufacturers of the PCB industry.
It sorted out the annual report performance of many PCB manufacturers in 2019. Among them, Pengding Holdings' net profit attributable to shareholders of listed companies was 2.925 billion yuan, an increase of 5.54% year-on-year; the net profit attributable to shareholders of listed companies was 1.206 billion yuan. , An increase of 111.41% year-on-year; Shennan Circuit ’s net profit attributable to shareholders of listed companies was 1.233 billion yuan, an increase of 76.80% year-on-year; Shengyi Technology ’s net profit attributable to shareholders was 1.449 billion yuan, an increase of 44.81% year-on-year.
From the perspective of the communications PCB business, the gross profit margins of the above several manufacturers have increased to varying degrees. Peng Ding Holdings increased 0.64% to 23.83%; Shanghai Electric Power Co., Ltd. increased 6.8% to 31.49%; Shennan Circuit increased 4.94% to 27.98%; Shengyi Technology increased 2.93% to 28.92%.
Industry insiders analyzed that with the accelerated construction of the second phase of 5G wireless equipment, the release of demand for high-frequency and high-speed PCBs, the optimization of the product structure of PCB head manufacturers, and the improvement of automation levels, and better cost control, all became major PCB manufacturers. The key element of ascension.

In addition, in addition to Apple's Peng Ding Holdings, Hudian, Shennan Circuit, Shengyi Technology and other 5G station orders from Huawei and ZTE have made huge contributions to its performance. Among them, Shennan Circuit's 5G station demand orders, revenue from Huawei and ZTE increased by as much as 73% and 182%, and Huawei ZTE won a large share of centralized procurement in the 5G phase II equipment.
It is true that in addition to 5G stations, the current server demand is also an important area driving the growth of communications PCB business.
d on the impact of the global epidemic at this stage, the demand for the home economy and cloud office continues to skyrocket, coupled with the expansion and replacement cycles of servers at home and abroad, ushering in a phased peak period.
It is well known in the industry that after the replacement of the new generation of CPUs (around 2025), the server as the largest part of the capital expenditure of the data center, and the shipment of switches, routers, storage and other ICT equipment will also resume and maintain growth, directly driving high-speed PCB Demand for copper clad laminates.
Industry sources said that current communications and servers are the main drivers of the growth of PCBs and copper clad laminates. The industry chain orders affected by the epidemic are being replenished. At present, among the top PCB manufacturers, new production capacity such as 5G stations and network equipment have entered the climb period.
At the same time, China Merchants Securities believes that the current communications orders have been scheduled until May-June, which can maintain high visibility. Under the influence of the epidemic, PCB head manufacturers will benefit from the increase in concentration.
Automobile plate market encounters constraints
It cannot be ignored that when the demand for orders in the communications and server fields picks up, the automotive PCB market is affected by the large environment and its demand performance is unstable.
Under the influence of continuous fermentation at home and abroad, the global shutdown or planned shutdown of automobile factories or more than 100, resulting in global automotive PCB manufacturers also suffered a chain reaction.
At present, the world's first echelon of automotive electronics PCB manufacturers is still concentrated in Taiwan and Japan, including Taiwan's Jing Peng, Yaohua, Zhen Ding and Japanese CMK and Mingxing.
At the end of last year, Jing Peng, a global automotive PCB manufacturer, said that due to the Sino-US trade war and the change in the market demand structure for the automotive market, the automotive PCB market demand was relatively conservative. In January of this year, Jing Peng said that 80% of its revenue comes from automotive electronics applications, and this year it is expected that European vehicle demand will pick up.

However, contrary to expectations, due to the continuous spread of the global epidemic, many countries are following the national defense epidemic measures to close the city. The global manufacturing industry has encountered a rhythm of work stoppage and production shutdown. The influence of industry chain manufacturers is also inevitable.
In addition, the famous Japanese PCB manufacturer Yuki also announced on January 31 that due to the spread of the new coronary pneumonia epidemic, the company's Wuhan plant resumed its work on February 14 and another Guangzhou plant started operations on February 10.
According to industry insiders, the impact of the epidemic is global. During the closure of China, many manufacturers have also stopped production for the protection of the epidemic. However, with the improvement of the domestic epidemic situation, the overseas epidemic situation has continued to deteriorate, and the impact on global PCB manufacturers is still being repaired. In particular, China is still in the continuous layout development in the field of automotive PCBs. Among the manufacturers represented, Hudian shares disclosed in its annual report that the automotive electronics business had a greater impact.
"Currently, the automotive PCB industry is accelerating its transfer to mainland China. However, automotive-grade products are technically difficult and the supply chain threshold is high. In the context of the automotive industry's low prosperity, the automotive PCB market demand is still relatively unstable. Under the influence of the epidemic, the demand of the automobile market continues to tighten, and the production capacity of low-end PCBs is surplus, and the price competition will be even more fierce. "The above-mentioned industry sources added.