Definition and classification of FPC
FPC is the abbreviation of Flexible Printed Circuit, also known as a flexible printed circuit board, which is a printed circuit board made of the flexible insulating substrate. As an important category of PCB, it has the advantages of high wiring density, thin thickness, light weight, and good bendability. Compared with other types of circuit boards, it is more in line with the development trend of intelligent and portable electronic products in the downstream industry. It is widely used in modern electronic products. FPC can be divided into four types: single-sided flexible board, double-sided flexible board, multi-layer flexible board and rigid-flexible board.
FPC industry analysis
From a cyclical point of view, the FPC industry mainly fluctuates with the fluctuations in the macroeconomic boom cycle; from a seasonal point of view, the production and sales of FPC companies in the second half of the year are generally relatively high; from a regional point of view, East China and South China are the largest area where high-end products and high value-added products of the FPC manufacturing industry are relatively concentrated.
FPC industry development history
Compared with Japan, South Korea and other countries, China’s FPC industry started relatively late. In the late 1980s, FPC technology research and development began to appear in China, and the industry developed slowly. Since the 21st century, with the transfer of global industries to China, Chinese local FPC companies have begun to develop rapidly.
Operation status of FPC industry
Supply and demand status
With the development of electronic products, FPC has been continuously updated and applied, and the upgrading of the electronic industry has driven high growth in demand. According to statistics, China’s FPC production in 2021 was 96.433 million square meters, and the demand was 86.604 million square meters.
Consumption by segment
At present, the consumption field of China’s FPC industry is still mainly concentrated in the field of consumer electronics, especially smartphones and tablets. In addition, the development of science and technology has brought the automobile industry from the era of electronics to the era of automation, and the continuous improvement of the level of automobile intelligence has made the proportion of FPC used in the field of automotive electronics continue to increase.
Price analysis
In recent years, the price of FPC products has shown a V-shaped trend. From 2012 to 2016, the average price of products has shown a downward trend. From 2017 to 2021, the price of FPC products has rebounded. In 2021, the average price of FPC products in China was 1494.5 RMB/square meter.
Analysis of FPC industry chain
Industrial chain structure analysis
FCCL is an important substrate in the production of FPC. The selection and use of the substrate determines the cost, life and performance of FPC products to a certain extent. The main raw materials of FCCL are PI film and rolled copper foil. In addition, the main raw materials of FPC also include components such as capacitors and resistors and electroplating additives.
FPC products mainly enter the terminal consumer goods market such as smartphones, tablet computers and wearable devices through display modules, touch screen modules, fingerprint recognition modules and camera modules. Some FPC products are also directly supplied to the terminal consumer goods market for Side button, power button and other parts.
Upstream analysis
1. FCCL
China’s FCCL has been researched and developed since the 1980s. In 1987, the former state-owned No. 704 Factory took the lead in developing two types of 3L-FCCL, copper-clad polyester film and copper-clad PI film. After recent years of development, China has now become one of the world’s largest producers of FCCL.
In 2021, the production capacity of China’s FCCL industry was 143 million square meters, the industry output was about 70.3 million square meters, and the capacity utilization rate was low, about 49.2%.
2. PI film
Since PI film belongs to the industry with high technical barriers, there are currently few participants in the industry. The main players are DuPont, Ube Industries, Maida, SKC and other American, Japanese and Korean companies. These companies impose a technical blockade on China, and it is difficult to break through in the short term. Therefore, China’s PI film manufacturing level is still relatively backward at this stage, and high-end PI films rely on imports, which restricts the development of FPC and FCCL industries to a certain extent.
3. Rolled copper foil
In recent years, the output of rolled copper foil in China has been increasing. After breaking through the 7,000-ton mark in 2017, it has been hovering for three years, and the total output in 2020 exceeded 8,000 tons. At present, the main enterprises in the rolled copper foil industry include Shandong Tianhe, Jinyuan Chaohui, CNMC Albot, etc. It is predicted that the output of rolled copper foil in China will have greater growth in the next few years.
Downstream analysis
1. Smartphone
The rapid development of the mobile phone market has created favorable conditions for the development of the FPC industry, among which smartphones are the main driving force for the growth of FPC market applications. In 2021, China’s smartphone shipments was 329.3 million units, a year-on-year increase of 1.1%. Among them, due to the high cost performance of domestic smart phones and the personalized application in line with customers’ usage habits, etc., the market share is relatively high.
In 2021, vivo, OPPO, Xiaomi, Apple, and Honor shipped 71.0, 67.1, 51.1, 50.3, and 38.6 million units respectively, with market shares of 21.5%, 20.4%, 15.5%, 15.3%, and 11.7%, respectively.
2. Tablet PC
In recent years, the vigorous development of online education in China has led to a continuous increase in the demand for tablet computers. At present, the main tablet PC manufacturers in China are Apple, Huawei, Lenovo and Microsoft. In 2017, China’s tablet shipments were 22 million units, which increased to 28 million units in 2021. As various mobile phone manufacturers enter the tablet market one after another, the original players are also increasing their investment, which will promote the continuous growth of China’s tablet market, thereby driving the development of the FPC industry.
3. Consumer drones
With the continued favorable factors such as policies, capital, and enterprises, China has made major breakthroughs and developments in consumer drone technology, and even a number of world-class companies have emerged. The market size of the industry is also growing. According to statistics, the market size of China’s consumer drones in 2017 was 3.58 billion yuan, and it increased to 7.24 billion yuan in 2021. In recent years, the rapid development of the consumer drone industry has brought new development opportunities for the FPC industry.
4. Automotive electronics
The overall development of the automotive electronics industry relies on the automotive industry. With the growth of China’s economy in recent years, the overall development of the automotive industry is in good shape. According to statistics from the China Association of Automobile Manufacturers, China’s auto production and sales showed year-on-year growth in 2021, ending three consecutive years of decline since 2018. In 2021, the output of automobiles was 26.082 million, of which the output of new energy vehicles was 3.545 million, accounting for 13.59%; the sales of automobiles was 26.275 million, of which the sales of new energy vehicles was 3.521 million, accounting for 13.40%.
In recent years, with the development of electronic information technology, the electronic level of automobiles has been increasing day by day, and the proportion of automotive electronics in the cost of complete vehicles has continued to increase. Coupled with the rapid development of the automotive industry, China’s automotive electronics industry has shown a rapid growth trend, thereby promoting the development of the FPC industry.
Analysis of the competitive landscape of the FPC industry
After years of development, the FPC industry has become a fully competitive industry in the world. At this stage, Japanese-funded, American-funded and Korean-funded enterprises still occupy the dominant position. Due to the late start of Chinese FPC companies, there is still a certain gap in comprehensive competitiveness compared with international leading companies. However, in recent years, Suzhou Dongshan Precision Manufacturing, Xiamen Hongxin Electronic Technology Group and other FPC companies have developed rapidly and has shortened the gap with foreign-funded FPC companies in terms of technical strength and other aspects.Analysis on the development prospect of FPC industry
In recent years, China’s electronic information industry has developed rapidly, and the scale of the industry has continued to expand. Smartphones, tablet computers and other electronic products are booming, and markets such as automotive electronics, wearable smart devices, and consumer drones are also rising rapidly, providing sufficient impetus for the development of the FPC industry. It is predicted that China’s FPC market will continue to grow in the future, China’s FPC production will be 160.866 million square meters in 2028 , and that the demand will be 140.281 million square meters.
However, at this stage, the requirements for thinner and smaller electronic products are constantly increasing, which makes the requirements for FPC’s line width and spacing, aperture and area wiring quantity and other indicators increasingly higher. Technology competition will dominate the future development of the industry, and FPC companies with weak technical strength will face the risk of exiting the market.
In the face of an increasingly competitive market, FPC companies should continue to innovate, transform production processes, increase production capacity, etc., in order to improve corporate competitiveness. In addition, it is suggested that FPC enterprises attach importance to the integration of industrial chains and increase the added value of products. Markets such as vehicle displays, gearboxes, sensors and entertainment information systems will also be the blue sea of new growth momentum for FPC companies in the future.
