An overview of FPC industry
Benefiting from the explosion of demand in industries such as smartphones and automotive electronics, FPC has become one of the fastest growing categories in the PCB industry in recent years.
FPC industry overview
Printed circuit board (PCB) is the key electronic interconnection of electronic products. It connects various electronic components through circuits and plays the role of conduction and transmission. According to the degree of flexibility, PCBs can be divided into rigid PCB, flex PCB(FPC) and rigid-flex PCB.
FPC (Flexible Printed Circuit) is a flexible printed circuit board, referred to as a flexible board. It is made of flexible copper clad laminate (FCCL) and soft insulating layer after being attached with adhesive (glue). Compared with traditional rigid PCBs, it has significant advantages such as high production efficiency, high wiring density, light weight, thin thickness, foldable bending, and three-dimensional wiring, which is more in line with the downstream electronics industry. Suitable for electronic products with miniaturization, light weight and mobile requirements.
According to Prismark data, the global FPC market will grow from US$14.1 billion to US$17.2 billion in 2021-2026, with a CAGR of 4.1%.
Analysis of FPC industry
The upstream of the direct raw material of the FPC industry chain is the flexible copper clad laminate( FCCL), and the downstream is the terminal consumer electronic products.
Globally, Japanese-funded enterprises currently occupy an absolute dominant position in the upstream of the industrial chain, and the short-term pattern will not change. The downstream products of the industrial chain are showing an increasingly diversified development trend.
The data shows that the main raw materials in the upstream of the FPC industry chain include: flexible copper clad laminate (FCCL), cover film, components, shielding film, adhesive paper, steel sheet, electroplating additives, dry film and other eight categories.
Flexible copper clad laminate (FCCL)
All processing of FPC is done on FCCL. FCCL is the key substrate for the production of FPC, and the cost accounts for 40%-50%.
FCCL is mainly composed of calendered copper foil, polyimide (PI) film or polyester (PET) film and adhesive, among which the substrate PI film is its core raw material.
Global FCCL production capacity is mainly concentrated in Japan, China, South Korea and Taiwan. With the continuous release of China’s FCCL production capacity, FPC enterprises in mainland China have gradually realized substitution in the field of upstream raw materials for FPC.
Polyimide (PI), an aromatic heterocyclic ring containing imide group, is one of the polymer materials with the best heat resistance among engineering plastics .
China ‘s polyimide films are mainly used for ordinary electrical grade films and cover films and reinforcing films of electronic products. The high-end PI paste and PI film in the market are basically monopolized by other countries.
Chinese companies mainly include Taimide Technology and Dasheng Technology in Taiwan, as well as Ruihuatai, Times New Materials, Danbon Technology and Dinglong Co., Ltd. (PI Slurry) in mainland China. The US-Japan-Korea companies DuPont, Japan’s Zhongyuan Chemical, Japan’s Toray, Ube Industries and South Korea’s SKC accounted for 64% of the PI market share, forming a situation of oligopoly.
Midstream: FPC manufacturing
FPC is a fully competitive industry in the world, and the competition pattern is concentrated. The combined market share of the top 4 manufacturers is nearly 70%. Nippon Mektron and Avary Holding are the world’s top 2 FPC suppliers, and their share is more than that of other manufacturers.
At present, the world’s leading companies can achieve line width and line spacing of 30-40μm and aperture of 40-50μm in terms of FPC product process capability, and further develop to the line width and line spacing of 15μm and below, and the aperture below 40μm.
Chinese local leading enterprises have also broken through the technology of 40-50μm line width and line spacing and 70-80 μm aperture technology, and further breakthrough in the process capability of line width and line spacing below 40 μm and aperture below 60 μm.
Representative FPC manufacturers of local companies mainly include Avary Holding, Dongshan Precision, Hongxin Electronics, Transimage Technology, Leader-Tech, KINWONG, Aisheng Precision.
In recent years, the Japanese leader Nippon Mektron has begun to turn to the high-margin automobile market. Sumitomo Electric and Fujikura have begun to shrink the supply of A customers. Avary Holding and Dongshan Precision have invested heavily in automated production lines, and their shares have continued to grow. Taiwanese enterprises are relatively stable.
In the distribution of PCB global output value in 2021, Taiwan, China ranks first with a proportion of 32.8%, mainland China’s proportion rises to 31.3%, ranking second, and Japan’s output value proportion drops to 17.2%, a drop of more than 50%.
In recent years, Mainland China actively undertakes industrial transfer, the PCB output value and its global share are rapidly increasing, and there is still a broad space for domestic FPC to replace in the future.
Downstream: terminal applications
The downstream of the FPC industry chain is for various applications, including display/touch modules, fingerprint recognition modules, camera modules, etc. End applications include consumer electronics, communication equipment, automotive electronics, industrial control medical, aerospace and other fields.
From the perspective of downstream, smart phone function innovation, large-capacity batteries compress internal space, and the consumption of FPC stand-alone increases. The high growth of wearable devices increases the consumption of FPC; the rapid growth of AR/VR has opened up new scenarios for flex-PCB applications; automotive electrification and Intelligence has brought about a substantial increase in the value of FPC bicycles. Among them, the trend of replacing copper wiring harness with FPC of power battery is clear, which increases the value of FPC bicycle by about 600 RMB.
With the accelerated upgrading of downstream terminal products and the increasing brand concentration, leading PCB manufacturers rely on their existing technology and scale advantages to build high industry barriers, consolidate their dominant positions in competition, and further improve the industry market concentration.
With the further improvement of China’s FPC industry chain, the steady improvement of technical level and the continuous improvement of production capacity, FPC enterprises are able to meet the needs of new energy vehicles and emerging consumer electronic products for FPC, and the competitiveness of Chinese FPC enterprises will continue to increase. Market share will also increase accordingly.