PCB industry opportunities run through the 5G cycle, starting with base stations and then terminals


2019 is the first year of 5G commercial use, with the construction of 5G base stations taking the lead. After the issuance of 5G official licenses, the market space for base station laying accelerates, driving the expansion of high-end PCBs such as high-frequency, high-speed, and multi-layer upstream. We estimate that the total PCB investment space brought by the construction of domestic 5G macro stations is about 30 billion yuan, and the incremental space of the communication PCB industry is expected to reach its peak between 2021 and 2022. The construction of 5G greatly expands downstream application scenarios, and investment opportunities for terminal PCBs are available. The launch of 5G mobile phones and the landing of AR/VR products will inject growth momentum into terminal PCBs; The implementation of key technologies such as the Internet of Vehicles has injected growth momentum into PCBs used in automobiles.
The base station and intelligent terminal industries have successively provided growth momentum for the PCB industry. 5G permeates from base station construction to terminal equipment, and the communication PCB used in the base station benefits first, with both quantity and price increasing; Terminal devices and AR/VR devices subsequently launched, with both quantity and price increasing; The demand for automobiles and industrial control has erupted simultaneously.
In terms of communication PCBs, according to our calculations, the total investment space for domestic communication PCBs brought by the construction of 5G Hongji Station is about 30 billion yuan; Drawing on the construction experience of 4G and 3G, the peak market space for base stations in a single year will appear approximately 3-4 years after the construction starts, which will be achieved around 2021-2022, with a single year contribution of market increment space of around 9.7 billion yuan.
In terms of terminal PCBs, 5G will drive a wave of device upgrades, bringing a rebound in smartphone shipments; In the era of 5G mobile phones and foldable screens, the usage of FPC and HDI has significantly increased.
Accelerate the construction of 5G and replace domestic production capacity of mid to high end PCBs. In the 5G era, China is in a leading position, and the relevant industry chain has emerged with communication equipment manufacturers and terminal manufacturers. Moreover, domestic PCB companies currently have the conditions for technology and production capacity transfer, and the transfer trend will accelerate. The new regulations and environmental protection policies in the PCB industry have raised the competitive threshold for the industry, resulting in a better future competitive landscape and significant benefits for leading players.
The price increase of upstream raw materials is expected to be transmitted to the PCB industry, but industry leaders are able to transfer cost pressure downward due to their close relationship with downstream.
5G technology brings a new round of electronic innovation cycle, and the industrial chain nurtures a large number of investment opportunities. The characteristics of 5G communication technology have brought rich and expanded downstream applications of PCBs. In the new era, the downstream market growth mainly comes from three major application scenarios: eMBB (Enhanced Mobile Broadband), URLLC (Ultra High Reliable Ultra Low Delay Communication), and mMTC (Dalian Internet of Things).
EMBB drives the upgrade and iteration of smartphones, and combined with the trend of thinness, it drives the quantity and price of terminal FPC, HDI and other segmented boards to rise simultaneously. URLLC is expected to solve market bottlenecks that require extremely high response speed, such as autonomous driving and industrial control automation. With the development of industrial control equipment automation and automotive intelligence, the demand for segmented PCBs has increased, increasing the potential of the PCB market. MMTC has brought about a significant increase in data storage, opening up vast market demand for the Internet of Things and data centers, and also bringing about a segmented PCB board investment market. As the mother of electronic components, PCB first benefits from the large volume dividend in the downstream market.
We believe that the PCB industry is a 5G construction

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PCB industry opportunities run through the 5G cycle, starting with base stations and then terminals

2019 is the first year of 5G commercial use, with the construction of 5G base stations taking the lead. After the issuance of 5G official licenses, the market space for base station laying accelerates, driving the expansion of high-end PCBs such as high-frequency, high-speed, and multi-layer upstream. We estimate that the total PCB investment space brought by the construction of domestic 5G macro stations is about 30 billion yuan, and the incremental space of the communication PCB industry is expected to reach its peak between 2021 and 2022. 5G construction greatly expands downstream application scenarios and terminals


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In the era of low profit in electronic products, price wars have changed the supply chain. The total output value of China's PCB industry reached 58.84 billion yuan, an increase of 8.6% year-on-year, with an average compound growth rate of 20% in revenue and a compound growth rate of 27% in net profit attributable to the parent company. The following is an analysis of investment in the PCB industry.