FPC performance is excellent, demand drives the growth of the sector beyond the industry level
FPC is a highly reliable and extremely flexible printed circuit board made of polyimide or polyester film and other winding substrates. FPC has high wiring density, small size, light and thin, uniform installation, and foldable The incomparable advantages of other types of PCBs, such as bending and three-dimensional wiring, are in line with the trend of intelligence, portability, and thinning in the downstream electronics industry.
The compound growth rate of FPC output value from 2009 to 2019 was 6%, which was higher than the 4.1% growth rate of the PCB industry.
In 2019, FPC's global output value was 12.2 billion U.S. dollars, accounting for 20% of PCB output value.
Demand: downstream applications are booming, and many fields open up the FPC market space
Smartphones are currently the largest application field of FPC
Smart phones are currently the largest application area of FPC.
FPC has penetrated from the earliest space shuttles and other military fields to civilian fields, gradually covering consumer electronics, automobiles, industrial control, medical, instrumentation and other fields.
From a downstream perspective, smartphones, tablet computers, other consumer electronics, automotive electronics, and network communications accounted for 40%, 18.8%, 15.7%, 5.5%, and 1.5% respectively in 2018.
Looking specifically at the application of FPC in smart phones, a smart phone requires about 10-15 pieces of FPC. Almost all components need to be connected to the motherboard by FPC. Each phone has different specific FPC usage due to different designs. There will be some differences.
2.2 Apple is currently the largest soft board demand side
Apple's innovation iteration leads the growth of the FPC industry.
As a well-deserved technology leader in mobile phones, Apple's huge order demand and its demonstration effects on other brands have driven the development of the PCB industry.
Specifically, Apple took the lead in the motherboard "ordinary HDI-any layer HDI-SLP class carrier version upgrade" process; and, Apple is also the most determined importer of FPC, from the original iPhone, 3G, 3GS applied The FPC antenna design structure has been innovated in successive generations since then-fingerprint recognition, dual camera, OLED, wireless charging, similar carrier board, LCP antenna are all realized through FPC, and the market space of FPC is continuously improved.
According to Prismark's 17 global sales ranking of the top 10 manufacturers, the top ten customers of Zhongzhending, Japan Qisheng, Sumitomo Chemical, Fujikura, Xinxing Electronics, Huatong, AT&S include Apple, and for Zhending, Qisheng For FPC-focused companies such as Shengli, Sumitomo Chemical, and Fujikura, Apple is their main source of performance.
Analyzing the year-on-year rate of change in company/sector revenue, it can be found that FPC manufacturers serving Apple have greater performance flexibility than other IC substrate and rigid board manufacturers.
The unit price of Apple FPC is higher than that of domestic mobile phones, and the corresponding manufacturers have better profitability.
The average price of FPC for Apple mobile phones is about 3000-5000 yuan/square meter (including component SMT) (refer to Pengding Holdings), and the average price of FPC for domestic ordinary mobile phones and other consumer terminals is about 1500-2000 yuan/square meter (including yuan Device placement) (refer to Hongxin Electronics, Jingwang Electronics, etc.).
2.3 In the future, we are optimistic about the prosperity of many downstream sectors and open up the FPC market space
2.3.1. 5G+ mobile phone innovation continues to drive FPC demand
The penetration rate of 5G mobile phones will increase and the proportion of millimeter wave models will increase, and the number of millimeter wave terminals will increase significantly.
2019 is the first year of 5G commercialization, and in 2020, 5G mobile phones will sell well.
IDC predicts that 5G mobile phone shipments will reach 500 million units in 2021, and the penetration rate of 5G mobile phones will continue to increase.
Benefiting from the advancement of 5G millimeter wave construction, the proportion of 5G models that support millimeter wave frequency bands will also increase.
According to relevant data from the Global Mobile Suppliers Association (GSA), there are currently more than 100 commercial and pre-commercial 5G millimeter wave terminals, including mobile phones, PCs, mobile hotspots, CPEs and modules.
5G+ mobile phone innovation is expected to drive FPC usage in mobile phones:
LCP antennas, full screens, etc., low-loss FPCs are expected to replace coaxial cables, and low-loss connections between multiple modules and motherboards are expected to increase FPC usage. For example, AiP modules and motherboards using low-loss FPC connections can bring great design freedom.
LCP antennas (high-frequency soft boards) continue to penetrate, opening up the FPC market space:
The LCP antenna is an FPC circuit board that uses LCP as the base material. LCP material has the characteristics of low dielectric constant and low dielectric loss, and is more suitable for high-frequency signal transmission. LCP antennas are more expensive due to the lack of upstream materials, films, and FCCL suppliers, and the shortage of supplies. It was adopted on iPhone X in 2017. The total value of the two LCP antennas is US$8-10, which is significantly higher than the value of the iPhone 7 independent PI antenna (US$0.4).
The full-screen COF packaging method is expected to drive FPC demand:
At present, the packaging technology of smart phone screens is mainly based on COG, COF and COP. Among them, COF is a die soft film assembly that fixes chips such as touch ICs on the FPC, and uses a soft additional circuit board as a package chip carrier to join the chip and the flexible substrate circuit.
Its advantage is that it can achieve a narrow frame and a 20:9 full screen. With full screens as the mainstream trend, the COF solution is expected to drive the increase in FPC demand.
There is a big difference in FPC usage between Android and Apple, and usage in the 5G era is expected to increase.
At present, the iPhone XS uses about 24 FPCs internally, and the current usage of a single Android phone is about 13, which is equivalent to the FPC usage level of the iPhone 5S, with a large gap.
Judging the future, with the penetration of 5G mobile phones and further internal upgrades of Android phones, FPC usage is expected to increase.
2.3.2. VR/AR has demands for weight reduction, and FPC usage is expected to increase
The release of benchmark terminal products is expected to lead to a greater volume of VR/AR equipment, and the VR/AR boom will improve.
Quest 2 released by Facebook in 2020 will further open up the market space of VR devices with affordable prices, better performance and richer applications. It will go on sale on October 13, 2020, and its Q4 sales will exceed one million, occupying a major market share. , Drove the improvement of the overall industry sector's prosperity. In 2020, the global VR head-mounted display equipment shipments increased significantly, reaching 6.7 million units, a year-on-year increase of 71.79%.
With technological progress, the launch of new products such as Apple MR, the decline in AR/VR costs, and the emergence of more innovative gameplay, AR/VR headsets are expected to enter a stage of rapid mass production.
Foresight Industry Research Institute predicts that by 2026, the global shipment of VR headsets will reach 40 million units, and the compound growth rate of VR headset sales will exceed 35% from 2020 to 2026. VR/AR head-mounted display equipment has long-standing demands for weight reduction and heat dissipation improvement, and the amount of FPC in VR/AR equipment has increased.
VR/AR head-display devices are usually composed of hardware devices such as screens, cameras, speakers, microphones, SoC chips, batteries, storage modules, sensors, fans, control buttons, USB interface cables, headphone interface cables and other hardware devices.
With reference to the related functional configuration of smartphones and FPC usage, it is estimated that there will be more than 10 single FPCs in AR/VR equipment. Some high-end models will use more FPCs due to factors such as more sensors, complex circuits, and stricter requirements on product weight and performance. , May be more than 20.
At present, low-end AR/VR devices usually need to be equipped with fans for active heat dissipation, but the introduction of fans and copper heat dissipation pipes will significantly increase the weight of the equipment and seriously affect the user experience.
In the future, as products are iteratively upgraded, with more functions, more sensor cameras are introduced, and the requirements for lighter weight and heat dissipation performance of products increase, which will further increase the amount of FPC.
2.3.3. IoT drives hardware demand and opens FPC downstream applications
Technologies such as 5G, artificial intelligence, and big data empower IoT applications. The demand for downstream applications such as smart home and industrial IoT is growing rapidly, and the IoT industry opens up room for growth.
Catalyzed by the rapid growth of the Internet of Things industry, the number of global Internet of Things connections is increasing rapidly, giving rise to a large amount of hardware demand. IoT Analytics estimates that of the 21.7 billion active connected devices worldwide, 11.7 billion (54%) will be connected through IoT devices by the end of 2020.
By 2025, it is estimated that there will be more than 30 billion IoT connections, and an average person will have nearly 4 IoT devices. IDC predicts that by 2025, the global IoT market will reach 1.1 trillion U.S. dollars, with a CAGR of 11.4% from 2020 to 2025, of which the Chinese market will account for 25.9%, making the IoT market the largest in the world.
The surge in IoT devices drives the growth of PCB demand. In the future, as the number of electronic components carried by IoT devices increases, the proportion of FPCs will further increase.
The three major functions of IoT devices-perception, networking, and applications correspond to the three major hardware requirements-sensors, communication chips, and MCU/SoC.
The sensor is used to collect surrounding environment information, and the MCU/SoC is used to process the data from the sensor and make correct responses according to different application scenarios.
Communication chips are used to realize end-to-end and end-to-cloud interconnection.
IoT devices are equipped with electronic components such as sensors, communication chips, SoC/MCU, etc., which has spawned a large amount of PCB demand. In the future, the integration of electronic components of Internet of Things equipment will increase, requiring more flexible PCB layout and smaller size, and the proportion of FPC applications is expected to further increase.
2.3.4. Increase in the amount of FPC used in the "Four Modernizations" of automobiles
New energy vehicles continue to penetrate, and the industry is booming.
In Q1 of 2021, a total of 1.128 million electric vehicles were sold worldwide, still maintaining a relatively high growth trend, with a penetration rate of 5.8%, which is 1.8% higher than the 4% penetration rate in 2020, setting a record high.
In the context of “carbon neutrality”, new energy vehicles such as Tesla have a strong performance in the field of new energy vehicles and traditional car companies are accelerating their electrification transformation. New energy vehicles are ushering in a period of rapid increase in volume.
According to the "Energy-saving and New Energy Vehicle Technology Roadmap 2.0" led by the Chinese Society of Automotive Engineers, it is estimated that by 2035, sales of energy-saving vehicles and new energy vehicles will each account for 50%, and the automotive industry will achieve electrification.
Under the trend of automobile intelligence, electrification, and network connection, the degree of automobile electronics has deepened, and the consumption of FPC has increased significantly. The three major systems of power battery, drive motor, and electronic control have become the core functional components of new energy vehicles, and the proportion of automotive electronics costs compared to the value of the entire vehicle has further increased.
With the commercialization of 5G technology, the Internet of Vehicles industry is developing rapidly, industry applications are accelerating penetration, supporting equipment and industrial chains are gradually improving, and there is a significant trend of automotive networking. Intelligentization + electrification and networking will drive the deepening of automotive electronics.
According to Zhanxin PCB data, automotive electronics accounted for 29.6% of vehicle cost in 2010, and is expected to reach 34.3% in 2020. By 2030, it will account for nearly 50% of vehicle cost.
At present, automotive electronics for new energy vehicles has accounted for more than 50% of the total vehicle cost, and the proportion of FPC in the total vehicle consumption will also be significantly increased. It is expected that the consumption of single-vehicle FPC will exceed 100 pieces.
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