Recently, Continental Shengyi technology, the world's second largest copper foil substrate (CCL) factory, announced that the price of key parts in the traditional peak season of the electronics industry has increased by 5% for different materials since September. CCL is a key raw material for printed circuit board PCB and cannot be replaced by other materials. Shengyi led the price rise, revealing that the market demand is strong. The peak season effect of Taiwan CCL Sanxiong Taiwan optoelectronics, Lianmao and Taiyao is expected, and affects the PCB market. Coincidentally, not long ago, as an upstream PCB manufacturer of LED display screen, willion electronics also issued a notice to adjust the price of copper coating. The upstream raw material manufacturers of LED display screen have raised their prices one after another. How should LED screen enterprises deal with it?
The strong demand of 5g market drives the rising value of raw materials
Industry insiders said that this year, the global electronics industry was quite cautious in pulling goods. The key components such as panels, memory and semiconductor silicon wafers sought after in the market last year have lost their popularity in the past, and prices have been callback one after another. It is understood that the rise in the price of 5G is mainly due to the Chinese mainland's infrastructure construction, which has led to a large demand for CCL by Netcom. As the key raw materials of PCB, copper foil substrate and copper clad laminate can not be replaced by other materials, accounting for more than 30% of the production cost of PCB. PCB is known as the "mother of industry", and its market position is self-evident.
Since June 6, 2019, the Ministry of industry and information technology has issued 5g commercial licenses to China Telecom, China Mobile, China Unicom and China Radio and television. The issuance of 5g commercial licenses marks China's entry into the first year of 5g commerce. The advent of 5g era has brought a huge market blue ocean to consumer electronics. At the same time, the huge demand for copper foil substrate and copper clad laminate has also been detonated. It can be said that the rise of 5g concept drives the rise of the value of copper foil substrate and copper clad laminate, and then drives the rise of PCB price. This price increase has affected the cost and raw material supply of PCB Factory and attracted great attention in the industry.
Environmental protection storm has also become an important reason for the rise in the price of raw materials
In recent years, people pay more and more attention to the awareness of environmental protection. While based on the steady economic development, people also have more requirements for environmental protection construction. Building an "environment-friendly" society has increasingly become an urgent need. The state has also adapted to the needs of the times and strengthened the rectification of environmental protection. In 2017, China comprehensively strengthened environmental emission restrictions on the manufacturing industry. In this investigation, nearly 100 enterprises were forced to suspend trading for rectification. The environmental protection tax implemented in 2018 also led to an increase in environmental protection expenses of PCB manufacturers.
After rectification, some PCB manufacturers who failed to meet the environmental protection requirements were forced to withdraw from the market. Those lucky to survive also had higher requirements for environmental monitoring of raw materials on environmental protection issues. The increase of environmental protection cost is bound to lead to the increase of upstream industrial chain cost. Among PCB manufacturers, some small and medium-sized PCB enterprises are forced to withdraw from the PCB market due to unqualified environmental protection. The original balance of supply and demand in the PCB market is broken. The shortage of supply in the PCB market will inevitably lead to a direct rise in prices. In the environmental protection tax implemented in 2018, the state has legalized environmental protection issues in the form of law, and environmental monitoring of PCB manufacturers will become a normalization, which is also the reason for the continuous growth of material prices of PCB manufacturers.
Forcing screen enterprises to raise prices is conducive to benign competition
For LED display enterprises, this round of price increase is not only caused by the industry force, but also a strategy for enterprises to take the initiative. On the one hand, the price rise of raw materials exceeds the range that manufacturers can bear, and enterprises need to ensure the quality of products by means of price rise; On the other hand, the industry needs to return to the level of rational competition, and taking the initiative to raise prices is undoubtedly a good start. Therefore, the implementation of price increase by LED display enterprises is excusable, and even will promote the price rise of the whole LED market, and promote the LED display industry to get rid of the vicious competition of "low price" and move towards benign price competition. In addition, the "price rise" will also accelerate the reshuffle of the LED display industry. Those enterprises lacking innovation will either be eliminated, or upgrade their products and take the innovative development route.
To sum up, several families are happy and several families are sad. This is nothing more than this, especially in shopping malls where the waves are more treacherous than the battlefield. Today, with a sound supply system, it is inevitable that one stone will stir up thousands of waves. Whatever the reason, the price rise of PCB driven by the rise of raw materials is determined by the market. What enterprises can do now is to play the cards in their hands and not passively let the mermaid meat. No one denies that this is a crisis. However, who does not admit that this is not an opportunity?
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