FPC Manufacturers Have Suffered Setbacks in The 5G Market. Can They Turn Around in The Embrace Of New Energy Vehicles?

As the types of downstream terminals become more and more abundant, the product application fields of circuit board manufacturers have also begun to develop in a more diversified direction.

2020 is also called the first year of 5G by the industry. The construction of 5G base stations and the release of 5G mobile phones have accelerated, and the demand for various circuit boards has increased on a large scale, including FPC (flexible circuit boards). Therefore, many listed companies in the industry chain have invested in related technologies, products and production capacity. Layout, hoping to take this to push the performance to a new height. However, it backfired.

Not long ago, Dongshan Precision mentioned in the announcement of the "Proposal on Changing the Use of Some Raised Funds" that the company's original raised funds investment project "Wireless Module Production and Construction Project of Yancheng Dongshan Communication Technology Co., Ltd." Due to factors such as delays, the progress of the project investment did not meet expectations.

Demand for automotive FPC is huge

In response to the needs of the 5G market, industry insiders told Jiwei.com: "In the past two years, under the influence of factors such as the epidemic and fluctuations in the price of bulk raw materials, the market environment for flexible boards is indeed not ideal. The performance of several major domestic manufacturers has not been satisfactory. No, we seem to be mainly due to the decline in 5G-related product orders, and the simultaneous decline in product profits."

Jiwei.com also noticed that after the investment in the 5G market was frustrated, these companies also began to seek new performance growth points through product planning in some other fields, the most popular of which is the new energy vehicle field.

At present, under the trend of autonomous driving, digitization and electrification, the demand for automotive electronic products including ADAS sensors, smart cockpits, electric power systems, and battery management systems is rapidly expanding, and the demand for related PCB products is growing at the same time. In the process of automotive intelligence, automotive FPCs gradually form a trend to replace wiring harnesses. Some institutions predict that the amount of automotive FPC will exceed 100 pieces with the increase in the cost of automotive electronics in the whole vehicle.

Some manufacturers pointed out: "First of all, under the development trend of the whole vehicle, the cost proportion of automotive electronics in the whole vehicle is also increasing, and automotive electronics is divided into two parts: body automotive electronics and automotive automotive electronics, and automotive FPC is gradually being used. After the replacement of the wiring harness, the amount of the body part should increase significantly.”

Beton Electronics also said: "The reason why it can replace traditional wiring harnesses is that FPC can achieve modular and automated production. Compared with traditional wiring harnesses, FPC has more obvious advantages in terms of production efficiency, safety, and lightweight battery. At this stage, such substitutions are more likely to occur in the energy storage industry.”

According to its introduction, in the new energy power battery industry, about 100,000 pieces of FPC are used in a 1GWh battery. At present, some manufacturers have begun to introduce the CCS (Cells Contact System, integrated busbar, wiring harness board integration) solution of the downstream integrated product of FPC, and Compared with FPC, the bicycle value of CCS can be greatly increased by 2-3 times.

It should be pointed out that although the new energy vehicle market is in good shape, there are not many companies that can actually stand on the market. The layout in this field has higher requirements for the technical reserves, mass production capacity and capital strength of enterprises, so it can be seen that almost all the companies participating in the competition are listed companies.”

Achieving replacement is not a short-term goal

We will have different degrees of layout in the field of automotive FPC.

As mentioned earlier, Beton said, we will carry out new energy flexible circuit boards and their assembly projects. Formed an annual production capacity of 2.1 million square meters of FPC for vehicles.

Beton Electronics is also very active in promoting the FPC business for vehicles. It is reported that Beton Electronics has entered the supply chain of the world's top five mobile phone terminal brands and well-known new energy vehicle industry companies such as BYD and CATL in the field of FPC. Beton is a professional vehicle power battery factory, and has supplied a large number of FPCs to domestic leading new energy power battery manufacturers.

It is worth noting that while mainland enterprises are actively deploying, large Japanese/Taiwan automotive sheet manufacturers, including CMK, Jianding, and Hi-Tech, have also increased their production expansion efforts after they have tasted the dividends of the new energy vehicle market. It is well known in the industry that due to the late development of the FPC industry in the mainland, although there have been obvious progress, the FPC factories of Japan, South Korea and Taiwan still maintain a leading position in the field of high-end products.

A senior person in the circuit board industry said, "Now that the demand for flexible boards in the 3C market is highly saturated, it is imperative for domestic leading companies to seek new growth points; however, in the flexible board industry, mainland manufacturers are in high Compared with Japanese, Korean and Taiwanese companies, there is indeed a significant gap in the manufacturing capacity of high-end products.

"There is still a big gap between domestic FPC manufacturers in terms of production capacity, products, revenue scale, etc. compared with the international first-tier manufacturers. In the entire industry, there is a relatively large fault between the first-tier and the second-tier. As far as I know, in the automotive electronics market, there are currently fewer manufacturers in mainland China that have the ability to supply FPC for vehicles, and the global production capacity distribution is still dominated by Taiwanese manufacturers."

In conclusion, the competitive advantage of mainland Chinese enterprises, the other party believes that the current rapid development of domestic demand for optoelectronics, new energy vehicles and other demand sides will inevitably drive the growth of the industrial chain; this will not only bring about the expansion of orders and revenue. , but when the industry chain undertakes more and more orders and product categories, the R&D design, manufacturing, cost control and other aspects will be significantly improved. Although this will not be a goal that can be accomplished in the short term, the huge domestic demand market will undoubtedly create more favorable conditions for the supply chain.