PCB downstream industry innovation continues, the communications and server sub-industry grows relatively fast. As the mother of electronic products, PCB has a wide range of downstream applications, including communications, computers, consumer electronics, industrial control medical, automotive electronics, aerospace, and packaging substrates. In the main application of PCB downstream industry, the export quantity of PC, mobile phone, TV and other products have entered a stable period, communications and servers are the main drivers of future industry growth. 5G communication will gradually enter the construction peak period from 2019 to 2020. According to Prismark, the market size of wireless infrastructure-related electronic systems will increase from $ 64 billion in 2018 to $ 84 billion in 2020, with a CAGR of 4.6%; The market size of server/ Storage will increase from $ 156 billion in 2018 to $ 173 billion in 2022, with a CAGR of 5.9%. According to Prismark statistics, the total global PCB output value in 2018 was about $ 63.5 billion, a year-on-year increase of about 8%. In the 5G era, PCB is expected to maintain steady growth. It?s expected that the global PCB industry output value will reach $ 70.3 billion by 2020.
5G base stations are being accelerated in 2020, and the PCB industry chain continues to benefit.
1.Policy guidance will accelerate the advancement of scientific and technological infrastructure after the epidemic, and the telecom PCB industry is expected to continue to rise.
5G commercialization has driven up the operator?s capital expenditure in advance. On June 6, 2019, the Ministry of industry and Information Technology officially issued a 5G commercial license, announcing the first year of 5G commercial use, one year earlier than originally planned. From the perspective of capital expenditures of the three major operators, the 3G construction cycle began in 2006 and reached its peak in 2009, the 4G construction cycle began in 2013 and reached its peak in 2015, and entered a new cycle of 5G construction in 2019, and operator capital began For the first time, according to historical laws, the capital expenditure of operators will continue to grow in 2020-2021.
China?s 5G base construction progress is ahead of the world. Policies increased the technological infrastructure, and the construction of 5G base stations accelerated. Affected by the epidemic, the domestic official manufacturing PMI fell to 35.7 in February, the lowest since 2005. 2020 is the year when the 13th Five-Year Plan ends. In order to achieve the 13th Five-Year Plan goals and to hedge the impact of the epidemic, the policy will vigorously increase the old and new infrastructure. As 5G is the representative of science and technology infrastructure, relevant policies and requirements will be released intensively. On February 22, the Ministry of Industry and Information Technology convened a "Accelerate 5G Development" meeting, which emphasized that "the information and communication industry is a strategic, basic, and leading industry that fully supports economic and social development." During the same period, China Unicom revealed in a video conference on ??Investment and construction work during the national epidemic? that as of February 20, China Unicom had opened a total of 64,000pcs 5G base stations. It plans to complete the construction of 100,000pcs base stations will complete the annual construction target one quarter ahead of schedule. Yang Jie, chairman of China Mobile, also stated that the target of 300,000 base stations for the year will not be affected by the epidemic.
2.PCB industry chain continues to benefit from 5G infrastructure construction
5G shifts to high frequency bands, and the number of base stations is expected to increase. Due to the crowded low-frequency(3KHz-300MHz) communication frequency bands, in order to provide faster transmission speeds, the frequency bands used by 5G are shifted to high frequencies(3GHz+), and high-frequency signals are decayed quickly. In order to meet the coverage, more base stations must be built. The current 5G frequency is about twice the 4G frequency. Theoretically, the number of 5G base stations should be four times that of 4G base stations. However, considering the high power, multi-antenna design, and the mixed SA and NSA solutions adopted by operators, There is a discount on the quantity. According to the prediction of China Industry Information Network, the number of 5G base stations will be 1.1-1.5 times that of 4G base stations. By the end of 2018, the number of 4G base stations in China reached 3.72 million, and the total number of 5G base stations is expected to exceed 5 million. As one of the important materials for base stations, PCB will benefit from the increase in the total number of base stations.
Benefiting from increased usage of high-frequency and high-speed products, the value of single-station PCB in the 5G era has increased significantly:
1) From the perspective of the number of installations, the total 5G base station is expected to reach about 1.3 times the 4G base station.
2) The number of 5G base station antennas has increased significantly(from a dozen to hundreds), and the increase in the number of antennas has driven the increase in PCBs required for a single base station.
3) The proportion of high-frequency / high-speed PCBs in 5G stations has increased, and the overall ASP has increased by approximately 1.3 times. The total amount and unit price increase together, and the value of PCB in the 5G era is expected to reach 55-600 billion yuan, about twice that in the 4G era.
The server industry gradually picked up in 19Q3, and iterative upgrade of high-speed PCB added driving force
The demand for cost reduction of enterprises has promoted the development of the cloud computing industry, and 5G applications have added momentum to the growth of cloud computing. Before the advent of cloud computing, enterprises need to purchase hardware and rent IDC equipment rooms when constructing IT infrastructure. In addition to the server itself, professionals at the bottom of cabinet, bandwidth, switches, network configuration, software installation, and virtualization also need to be responsible. The emergence of cloud computing provides new solutions. Enterprises can self-build the software the hardware environment required by applications through cloud servers, and can be expanded and billed on demand at any time according to business changes, effectively reducing enterprise hardware costs and improving operational efficiency. With the maturity of the underlying technology and the improvement of the business model, the cloud computing industry has developed rapidly. According to the data of the Prospective Industry Research Institute, the global cloud service market size reached $ 305.8 billion in 2018, an increase of 17% year-on-year. It?s expected that the market size will reach $ 548.8 billion in 2022. At present, the penetration rate of the domestic cloud computing market is relatively low, but driven by both policies and demand, it?s growth rate has far exceeded that of the world. With the official commercialization of 5G, 5G applications such as VR/AR, cloud gaming, ultra-high-definition video, internet of Vehicles, and industrial control have quickly landed, driving a surge in data and computing volume, and adding momentum to the growth of cloud computing industry.
The epidemic quickly opened the online application market, and the cloud computing industry benefited deeply. Affected by the epidemic, online demand for online office / education surged. ?Dingding? surpassed WeChat for the first time in February, ranking first in the free app list on the Apple App store, and ?Enterprise WeChat? and ?Tencent Meeting? ranked third and fourth. According to news reports, the 2000 million + online demand has brought huge pressure to the backstage of Dingding. Dingding urgently expanded 10,000 servers on February 3, and expanded 10,000 again on February 4. In the long run, the outbreak will help cloud enterprises complete market education quickly. It?s expected that some long-term users will be retained after the outbreak. At present, it may be an inflection point for the accelerated development of domestic online office / education and other industries.
Cloud computing is the main growth point of severs, and the industry turning point has been reached since 19Q3. According to Prismark?s forecast, the compound growth rate of the data center/server PCB market in 2018-2023 will reach 5.8%, significantly higher than the industry average of 3.7%, and it?s also a high-growth sector after wireless base station growth. The prosperity of the server industry is mainly affected by the capital expenditure of upstream cloud computing vendors. Benefiting from the increase in cloud computing demand, the server industry has entered a high prosperity cycle since 17Q1. The industry has grown rapidly. In 2018, it was affected by the decline in global economic growth and the Sino-US trade war. The upstream cloud giant of servers reduced capital expenditures, and the growth rate of the server industry began to slow down. From the perspective of demand, the growth rate of capital expenditure of overseas cloud computing giants changed from negative to positive in 19Q2, and the growth rate of 19Q3 further rebounded; From a supply perspective, the growth rate of server-related companies at home and abroad picked up in the bottom of 19Q3. With the commercialization of 5G, the industry is expected to maintain a high growth rate in 2020.
CPU manufacturers accelerate the pace of technology upgrades to cope with market competition. The CPU performance iteration process speeds up, advancing of the server replacement rhythm. Intensified competition in the chip market has led major players in the industry to increase investment in technology research and development, and the iterative progress of product technology upgrades has been greatly accelerated. The rapid improvement of CPU performance directly leads to a significant increase in the cost performance of terminal server products. Against the background of the explosive growth of server-side computing power in the 5G era, the server replacement cycle is expected to be significantly shortened.
The demand for PCIe 4.0 to upgrade well for high-speed PCBs continues to increase. PCIe is a high-speed serial computer expansion bus standard, proposed by Intel in 2001, designed to replace the old PCI, PCI-X and AGP bus standards.
PCIe4.0 has brought the server to the high-end upgrade, and the PCB boards used in the high-end server are mainly 4 types.
1) Backplane, used to carry all kinds of Line cards, the board thickness is more than 4mm, and the number of layers is often more than 20 layers.
2) The LC main board is generally more than 16 layers, the board thickness is more than 2.4mm, the outer layer line width and spacing are usually designed to be 0.1mm/0.1mm and below, and have high requirements for signal loss.
3) LC Ethernet card, more than 10 years, about 1.6mm thickness.
4) Memory cards are usually limited to 10 layers or more, and the line width and distance are 0.1mm/0.1mm or less. Basically, high-frequency high-speed multi-layer boards are required, which are generally more than ten layers. The requirements are even higher than the high-frequency high-speed boards used in 5G base stations. The technical barriers and value are relatively larger. The technology upgrade in the server industry will be significant. Increase the proportion of high-speed high-level PCB, and add driving force to high-speed high-level PCB.