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86 PCB007 MAGAZINE I APRIL 2021 Article by Hu Yang ZHONGTAI SECURITIES RESEARCH CENTER Editor's note: e price of copper clad lami- nate (CCL) affects the whole electronics indus- try. Here, we invited analysts om Zhongtai Se- curities to analyze and forecast the current situ- ation. e content of this article is also based on field research data of Zhongtai Securities and its researchers. is article was written in January 2021, originally appearing in the March 2021 PCB007 China Magazine, it has been translated om the original Mandarin. Material prices remain firm, and the sup- ply-demand structure has improved. ese are the core driving forces of the current round of price increases. Raw materials account for more than 80% of the cost, and the profit is greatly affected by the material cost. According to the CCL Association, cop- per foil accounts for the largest proportion of raw materials (traditional CCL uses ep- oxy resin, glass fiber cloth and copper as raw materials). Copper foil in thin plate accounts for about 30% of the overall cost; in thick plate copper accounts for 50%. In CCL produc- tion, using Shengyi Technology and Chaohua Technology as examples, the cost of raw materials accounts for about 88% of the total cost, with labor accounting for about 4%. Other costs such as equipment depreciation account for about 8%. The industry chain has strong bargaining power. e CCL industry has a high entry thresh- old. Because of the various raw materials, pre- cision, structure, and different production pro- cesses, suppliers need to have a higher level of technology to meet the high level of product requirements. In addition, copper clad lam- inate production requires higher capital ex- penditure, which also brings significant capi- tal barriers. But this combination strengthens the industry as a whole. According to a Pris- mark ranking of global rigid copper clad lami- nate companies, the ranking and market share changed little in recent years, with CR10 ac- Time, Space, Structure, and Model Analysis of CCL Price Increase

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