"Based on our recent understanding, the copper-clad laminate industry is entering a new cycle of prosperity. Some companies are not even shutting down for the Chinese New Year holiday," said a senior executive from a well-known domestic phenolic resin company to a Securities Times reporter on January 25th. "In the process of the rise of the domestic CCL industry, the domestic substitution of core materials is expected to accelerate."
Companies Ramp Up Production of High-Performance CCLs
Copper-Clad Laminate (CCL) is a major application field for phenolic resin. The downstream CCL clients of the aforementioned phenolic resin company include Taiwan Union Technology Corporation, ITEQ, Shengyi Technology (600183), Huazheng New Material (603186), Jin'an Guojie (002636), and Nan Ya New Material (688519), among others.
"With the rapid growth in demand from AI servers, automotive electronics (885545), and optical communication, CCL companies are experiencing a recovery. We recently returned from a visit to a CCL company; they are quite optimistic about the 2026 outlook. Due to urgent customer orders, they are not planning to shut down for the Spring Festival," the executive added.
It is understood that CCL is the upstream material for manufacturing PCBs (Printed Circuit Boards (884092)), with final application scenarios including communication equipment (881129), automotive electronics (885545), consumer electronics (881124), and semiconductors (881121), etc. In the next 3-5 years, the growth in the PCB industry will be primarily driven by the dual engines of "AI computing infrastructure + automotive electronics (885545) intelligence." Simultaneously, advanced packaging (886009), edge AI hardware, high-frequency communication, and other fields will provide structural growth opportunities. The trend of the industry upgrading towards higher-end, high-value-added products is clear.
Recently, due to a surge in AI server demand causing tight supply of high-end raw materials, global leader Resonac has announced a comprehensive price increase of over 30% for materials including Copper Foil Substrates (CCL), effective from March 2026. With the surge in demand from AI servers and new energy vehicles (850101), the global PCB market reached $88 billion in 2024. According to forecasts by consultancy Prismark, the global PCB market output value will grow by approximately 6.8% in 2025, and the PCB industry will continue to grow in the coming years, reaching around $94.661 billion by 2029, with a compound annual growth rate (CAGR) of about 5.2%.
In terms of global capacity distribution, China has become the absolute leader, accounting for about 50% of global PCB capacity. The Pearl River Delta (Guangdong accounts for 40% of national capacity), Yangtze River Delta, and Bohai Rim form the three core manufacturing belts. Driven by cost factors, Southeast Asia (513730) has undertaken the transfer of some mid-to-low-end PCB capacity.
Those closest to the water know the temperature first. The reporter noted that after a prolonged downturn of 2-3 years, upstream CCL companies are experiencing a strong recovery and have been reporting positive results in their annual performance forecasts. For example, Jin'an Guojie (002636) reported net losses after deducting non-recurring items of 110 million yuan and 82.36 million yuan in 2023 and 2024, respectively. However, by the second half of 2025, the company's performance accelerated, with full-year net profit expected to increase by 655.53%—871.4%. Huazheng New Material (603186) forecasts a net profit of 260-310 million yuan for 2025, compared to a net loss after deducting non-recurring items of 119 million yuan in the previous year. Nan Ya New Material (688519) reported a net profit of 158 million yuan for the first three quarters of 2025, exceeding the full-year profit of 50.32 million yuan from the previous year. Industry leader (883917) Shengyi Technology (600183) reported a net profit of 2.443 billion yuan for the first three quarters of 2025, already surpassing the full-year 2024 net profit of 1.739 billion yuan.
It is noteworthy that while collectively reporting positive annual results, CCL companies have also successively announced new rounds of production expansion. On January 4th, Shengyi Technology (600183) disclosed that it has signed a 4.5 billion yuan investment intent agreement for a high-performance CCL project with the Dongguan Songshan Lake High-Tech Industrial Development Zone Management Committee. In December 2025, Nan Ya New Material (688519) disclosed a private placement plan, intending to raise approximately 900 million yuan to expand production of high-end CCLs. In November 2025, Jin'an Guojie (002636) disclosed a private placement plan, intending to raise 1.3 billion yuan for projects including high-grade CCLs.
Core Materials Accelerating Domestic Substitution
In the new round of expansion within the CCL industry, upstream core material suppliers are expected to accelerate domestic substitution. "In recent years, many domestic high-end resins and their core materials have made significant progress in product performance enhancement and are now able to substitute for foreign counterparts on an equal footing," the aforementioned resin company executive stated. "Perhaps sensing the crisis of domestic substitution, Daihachi Chemical Industry (850102) recently approached our company, hoping we would become their agent for phosphorus-based flame retardants, but we declined."
The executive cited an example: "Currently, while producing resins, we are also the agent for two special phosphorus-based flame retardants from Wansheng Co., Ltd. (603010). Leveraging our company's existing channel advantages and the cost-effectiveness of Wansheng's own products, we have introduced their products to several CCL companies. Previously, the use of these special flame retardants by these companies was largely monopolized by foreign firms."
Regarding these statements, the reporter reviewed the company's public information and found that it has already deployed two core products in the high-end PCB upstream material field at its Weifang base: flame retardants for CCLs and photosensitive resins for PCB photoresists (885864). A representative from Wansheng Co., Ltd. (603010) told the reporter that the company has formed diversified supply capabilities for multiple types of flame retardants and photosensitive resins for CCLs, continuously solidifying its competitive advantage.
Benefiting from the continuous expansion of the downstream printed circuit board (PCB) manufacturing industry and increasing requirements for fire performance in electronic products, the global market demand for flame retardants used in epoxy CCLs is expected to show a rapid growth trend. Halogen-free phosphorus-based flame retardants, which can avoid harmful gases produced by halogen combustion and the potential carcinogenic risks associated with antimony-based flame retardants, and possess good thermal stability and flame retardant efficiency, are seeing a significantly increased application proportion in high-end CCLs.
It is understood that resin types involved include electronic-grade epoxy resins, electronic-grade phenolic resins, etc. Among them, electronic-grade resins act like "property adjusters" for CCLs—different resins can enhance different characteristics of CCLs, and the upgrading of CCL characteristics in turn makes PCB performance better. For example, the polar group structure and curing method of the resin affect the copper foil peel strength and interlayer bonding force of the CCL, making PCB processing more reliable. The more bromine-based or phosphorus-based flame-retardant elements in the resin, the higher the flame retardant rating of the CCL. Special structures can also achieve low dielectric properties and intrinsic flame retardancy, meeting the needs for high-frequency signal transmission and high-speed information processing, widely used in next-generation servers, automotive electronics (885545), communication networks, and other fields.
Taking high-frequency CCLs as an example, such products are "special receivers" for ultra-high-frequency signals, operating at frequencies over 5GHz, suitable for ultra-high-frequency scenarios. They require ultra-low dielectric constant (Dk) and as low as possible dielectric loss (Df). They are core materials for 5G base stations, autonomous driving (885736) millimeter-wave radars (886035), and high-precision satellite navigation (885574). To lower Dk, it mainly relies on modifying the insulating resin, glass fiber, and overall structure.
Industry insiders believe that as the global electronics industry upgrades towards "halogen-free, high-performance, high-reliability," the performance requirements for PCB upstream materials (especially flame retardants and CCLs) continue to increase, providing new market opportunities for material companies with technological advantages. These companies will gain first-mover advantages in the domestic substitution within the mid-to-high-end markets. In particular, Wansheng Co., Ltd. (603010), having laid out in advance the two core product lines of flame retardants for CCLs and photosensitive resins for PCB photoresists, will fully enjoy the benefits of industry growth and domestic substitution.
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Source: Securities Times e Company
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