News description

Kingboard has announced that the company will increase the order prices of PCB materials from December 11, 2019 onwards to reflect its production costs.

 

Impact analysis

Based on survey statistics, Kingboard’s global market share of copper foil substrates is about 14%. Currently, it still ranks first in the world, but the gap between Sytech, which is ranked second, has been narrowed to about 1%, and the gap in the market share between the top five manufacturers is within 5% ~ 6%. Therefore, Kingboard’s leadership position in copper foil substrates is not so stable. If it has not felt the increasing pressure of upstream material costs, it would not have easily implemented the price increase mechanism.

 

Generally, copper foil substrate resin and glass fiber cloth each account for about 25% of production costs, and copper foil accounts for up to 50%. Thus, the price trend of copper has a significant impact on the production costs of copper foil substrates. There was a slow demand for industrial raw materials in the first half of 2019, affected by the global economic doubts and the US-China trade conflict, causing the copper prices to fall under the pressure. The copper foil substrate manufacturers had shown a good operating performance at that time under the circumstances of lowering costs and rising demand. However, if we observe the price trend of copper over the past half-year - there was a price difference of about 9.3% between the highest and lowest prices - it is still currently near the highest price position. This is the reason why Sytech, among other Chinese copper foil substrate manufacturers, has recently taken the lead in announcing a price increase.

 

Since the main products that Kingboard has increased prices on are the general FR-4 materials or CEM-1/22F copper foil substrates that belong to the materials used in general circuit board products, it is predicted that Chinese PCB manufacturers will dominate the major affected manufacturers. As to whether or not Taiwan’s copper foil substrate factories will follow the price hike trend? Well, based on the fact that market demand is still robust and all factories are set to expand production next year, it is expected that they should adopt a wait-and-see attitude in the short term, unless copper prices continue to rise.