First, 5G technology change, radio frequency PCB is the most significant, PCB both offensive and defensive.
5G technology change, radio frequency is the most significant, PCB offensive and defensive.
Considering the increase of frequency and the decrease of delay, 5G is not only different from 4G in system architecture design, but also puts forward new requirements for radio frequency materials, such as filter, antenna, oscillator, PCB and so on.
The market ignores the advantages of PCB over other RF links.
We believe that PCB is relatively mature and has built a moat of technology and capacity, and similar to optical fiber cable. Although the amount of PCB is large, communication equipment manufacturers are not directly involved in it.
At the same time, China's increasingly stringent environmental protection policies have gradually concentrated its competitive advantage on the top manufacturers, which is evidenced by the steady increase in gross interest rates of Shanghai Telecom and Shenzhen South in the past five years.
Secondly, 5G Base Station Doubled, Wireless Architecture Change Drives PCB Volume and Price Rise
5G base station doubles, wireless architecture changes drive PCB volume and price rise.
We judge that the number of 5G base stations will reach 1.3-1.5 times of that of 4G. With the increase of the total number of 5G base stations, due to the adoption of multi-antenna (MIMO) technology, the requirement for miniaturization and integration of 5G is higher. In the radio frequency unit (AAU), PCB is gradually used in the part originally connected by feeder.
With the development of high frequency band and millimeter wave band in the future, the value of PCB in communication system equipment is expected to increase from 2% to 5% - 6%.
It is estimated that the global market size of 5G base station PCB board is 116.5 billion, which is 5.5 times that of 4G. The global market size of 5G base station PCB board is 26.9 billion, and the domestic market size is 16.1 billion.
Thirdly. High-frequency and high-speed copper clad laminate material in upstream of PCB is the core, and the import substitution space is large.
PCB upstream high-frequency high-speed copper clad laminate material is the core, import substitution space is large.
The market believes that the growth of PCB mainly depends on quantity. In the early 5G period, the demand for PCB is not high for 2.6G and 3.5G intermediate frequency bands.
However, we believe that the application of high frequency and high speed sheet metal will run through the whole medium, high frequency and millimeter wave stage. The characteristics of 5G with low delay, high reliability and low power consumption put forward higher requirements for copper clad laminates.
Rogers (NYSE: ROG), the world's leading manufacturer, has launched copper clad panels specifically for 5GMIMO antennas and future high-frequency and millimeter-wave applications.
Fourth. High-quality companies emerge as the times require
Global vision preferred Shennan Circuit, Shanghai Telecom, Dongshan Precision, Rogers.
PCB industry has experienced shuffling, in a more stable competition pattern, we choose the leading target with a global perspective.
In the short and medium term, leading companies have bottom-up capacity expansion, which is expected to release capacity in 2019-2020, and the growth in the third quarter of this year is now beginning to show.
In the long run, Huawei, ZTE, Ericsson and other leading PCB suppliers have a relatively stable pattern, waiting for the release of demand for 5G high-end products.
Considering that downstream PCB covers consumer electronics, automobiles and other fields, we prefer to focus on the relatively high proportion of downstream telecommunications industry:
1) Shennan Circuit: Capacity will be increased by 35% in 2019, and the board will be connected in the middle of next year.
2) Shanghai Electric Power Shares: New capacity has been released one after another, and the growth certainty in the first half of 2019 has increased.
3) Dongshan Precision: Acquisition of Multek, strengthening communication layout outside consumer electronics, looking forward to further integration in 2019
