Elite Material Co., Ltd. (EMC) temporarily lost orders from Apple due to its adoption of SLP and changes in materials last year but has currently been re-verified and expects to regain orders this year. As the largest manufacturer of halogen-free substrates, the data center trends drive the demand for server copper foil substrates. With the increased adoption of high-frequency and high-speed products in response to 5G, EMC has continued to expand its production. The former board of directors resolved to set up a new plant in Hubei, which is expected to start contributing in 2019.

In terms of EMC’s applications, handheld devices (including cell phones/tablets/wearable devices/NB), infrastructure (including netcom and server equipment), automotive devices, and others account for 30%, 38%, 22%, and 10% respectively; in terms of products, adhesive sheets and copper foil substrates account for 45% and 55% respectively.

 Furthermore, infrastructure with a relatively high gross margin is the key to the company’s increase in the market share. In terms of servers, the trend of data centers drives the growth of servers. Chinese hardware manufacturers, such as Huawei and Inspur, have continued to increase their demand for server copper foil substrates. As the largest manufacturer of halogen-free substrates, EMC enjoyed overall market growth; as for netcom, the trend of 5G drives the demand for high-frequency and high-speed materials, while clients are more willing to adopt halogen-free materials, making it the main source of growth.

In terms of recent operations, the proportion of Apple products to EMC’s revenue last year was reduced; meanwhile, revenue since last September has declined due to iPhone’s adoption of SLP and changes in materials. Recently, operations have become stable, and Apple may potentially re-adopt EMC’s material, which has been verified at present, and EMC is expected to supply Apple later this year. In terms of automotive devices, key accounts still adopt halogen materials with a relatively low gross margin; thus, they are not considered high-end products, but they have been a stable production line in the long run. With the increasing awareness of environmental protection and a trend of transitioning from halogen materials to halogen-free materials, the automotive device area is expected to grow.

In terms of production capacity, EMC currently has production sites in Guanyin and Hsinchu in Taiwan and Kunshan and Zhongshan in China. Hsinchu Plant was expanded last year and is expected to contribute this year. Furthermore, the former board of directors resolved to set up a new plant in Hubei, mainly in response to the expansion of downstream clients in Hubei, which has become a PCB cluster. Taiwanese manufacturers, such as Dynamic, Unimicron, and Tripod, have a plant in Hubei and also plan to expand. Other Chinese manufacturers are also concentrated in Hubei. Therefore, EMC plans to set up a plant in Hubei soon in order to serve clients and win over orders from potential clients. (Source: Money DJ)