Introduction
The flexible PCB industry (Printed Circuit Board) is a dynamic and rapidly evolving sector within the broader electronics market. Flexible PCBs are essential components in various modern electronic devices due to their unique ability to bend and flex, enabling innovative design possibilities and advanced functionality. However, as with any technology-driven industry, the flexible PCB sector faces a series of challenges and opportunities that shape its development and growth.
Industry Positioning
PCBs can be categorized in various ways. Based on the flexibility of the base material, they can be divided into rigid boards (R-PCB), flexible boards (FPC), and rigid-flex boards. According to the number of conductive layers, they can be classified into single-sided, double-sided, and multi-layer boards. Additionally, there are special product categories such as high-speed high-frequency boards, high-density interconnect (HDI) boards and packaging substrates.
Production Process
The production process of FPC can be broadly divided into two main parts. The first part involves the production of the circuit layers, and the second part involves combining, laminating, and further processing the circuit layers with other materials to form the final FPC. When signal transmission lines are distributed on the outermost layer of the FPC, an electromagnetic shielding film is laminated after the overlay to prevent signal distortion caused by electromagnetic interference, ensuring the proper functioning of the FPC circuit.
Classification
FPC products can be categorized into single-layer, double-layer, multi-layer FPCs, and rigid-flex PCBs based on the number of conductor layers and their structure. As the number of layers increases, the number of circuits that can be accommodated within the same volume and the signal transmission capacity both significantly increase. This effectively reduces the volume occupied by the FPC, providing convenience for end products to accommodate more functions.
Industry Support
The electronic components manufacturing industry, as the foundation of the electronic information industry, has consistently received encouragement and support from national industrial policies. A series of policies have been introduced to support the development of the PCB and FPC industries. In recent years, continuous policy efforts have been made to foster and incentivize the growth of these industries, which is beneficial for attracting capital, expanding demand, and upgrading the industry.
FPC Industry Chain Analysis
Industry Chain Analysis
FPCs are made by laminating flexible copper-clad laminates (FCCL) and soft insulation layers with adhesives. FCCL is the key base material for producing FPCs, and its stable supply and price fluctuations are critical factors for FPC production.
Cost Factors
In the upstream cost structure of FPCs, as the downstream consumption of electronic products increases in variety and complexity, the demand for FPC components grows, leading to a higher proportion of electronic components in the overall cost, currently exceeding 50%. FCCL, as the most important base material for FPC production, accounts for 15.6% of the cost. Electromagnetic shielding films, which prevent interference and protect information transmission, account for 5.5%. Other auxiliary materials such as overlays, adhesive tapes, steel sheets, electroplating additives, and dry films collectively account for 28%. FCCL primarily consists of rolled copper foil, polyimide (PI) film, or polyester (PET) film as the base material, with PI film being the core raw material. Global FCCL production capacity is mainly concentrated in Japan, mainland China, South Korea, and Taiwan, accounting for 96.8% collectively, with Japan and mainland China ranking first and second at 27.2% and 25.5%, respectively. Despite the annual increase in capacity utilization, it remains below 50%, indicating severe overcapacity. However, stable supply leads to minimal price fluctuations, ensuring steady FPC production.
Demand Side: Smartphones, Wearable Devices, Automotive
In 2019, the main downstream applications for FPCs were smartphones (44.9%), PCs (18.5%), other consumer electronics (14.2%), automotive (6.6%), tablets (4.8%), and servers/data centers (4%).
Smartphones have been the primary driver of FPC demand. Since 2018, the industry has experienced a slowdown due to market saturation, but shipments saw a slight rebound in 2021 due to the 5G upgrade cycle. Wearable device shipments have been steadily increasing, providing sustained growth for FPC products. The wearable device market still has significant growth potential, and as it continues to expand, the FPC market size is expected to grow accordingly.
In the automotive sector, the market size for automotive FPCs is currently under 10 billion yuan. Compared to traditional wiring harnesses, FPCs offer higher production efficiency, and size precision, and are suitable for large-scale production. Technologically, FPC harness solutions offer high integration, automated assembly, accurate installation, ultra-thin thickness, high flexibility, and lightweight advantages. For example, in lithium iron phosphate battery packs, multiple cells are connected using FPCs. An improved 590 module contains 16 cells and uses two FPCs, while a long module based on double-row cells can have up to 32 cells, doubling the number of FPCs used.
Current State of the FPC Industry
Global Market Size
Before 2019, the global FPC market size showed a slight decline due to saturation in the smartphone market. However, the market size rebounded due to innovative applications in consumer electronics and the 5G smartphone upgrade cycle. Statistics predict that the global FPC market size will reach $13.8 billion in 2021, growing by over 10% compared to 2020. With the 5G smartphone penetration rate exceeding 50%, there is still considerable growth potential. Combined with the automotive market's broad replacement opportunities, the market size is expected to continue increasing, reaching $15.4 billion by 2025.
Product Structure
In the global FPC application structure, smartphones are currently the main battlefield. Double-sided boards dominate in smartphones, accounting for about 48% of FPC products. Rigid-flex FPCs, which meet the needs of display panels, batteries, and camera modules, hold a market share of 19%. Single-sided and multi-layer boards account for 18% and 15%, respectively.
Competitive Landscape of the FPC Industry
Competitive Landscape
The industry's focus is shifting towards China. The global top three FPC companies—Zhen Ding, Flexium, and Dongshan Precision—collectively hold 54% of the market share, indicating high concentration. Benefiting from China's position as the world's largest producer, exporter, and consumer of consumer electronics, international FPC manufacturers are investing in China. The FPC production value in mainland China is expected to continue rising.
Revenue of Chinese FPC Companies
In 2021, the global demand for smartphones rebounded, increasing overall FPC demand. Most major FPC manufacturers saw varying degrees of revenue growth. Despite a slight revenue decline due to structural changes, Helitai turned a profit overall. Pending Holdings, the largest FPC manufacturer in China, reported a total PCB revenue of 33.314 billion yuan in 2021, with production and sales volumes of 27.41 billion tons and 26.52 billion tons, respectively, growing by 14.1% and 11.52% compared to 2020.
