Ming-Chi Kuo revealed: Qualcomm AI PC motherboard material upgrade, CCL price soared 15%-20%

Recently, well-known analyst Ming-Chi Kuo pointed out in his investment briefing that due to multiple factors such as the surge in demand for AI PCs and conventional servers and rising raw material prices, mid- to low-end printed circuit boards (CCL, Copper Clad Laminate, copper clad laminate layer) Pressure plate) has shown a general price increase trend. In particular, copper foil laminates, the key raw material for mid- to low-end printed circuit boards, have seen a general price increase. It is reported that copper foil laminate is one of the most important materials for mid- to low-end printed circuit boards, accounting for about 40% of the entire printed circuit board cost.

Guo Mingchui specifically mentioned that the current price increase of CCL products below M4 level is particularly obvious, with an average increase of more than 10%. Relatively speaking, high-end CCL products above M4 have remained stable for the time being, with no obvious signs of price increases.

From a supply chain perspective, the sharp increase in demand for AI servers in the past year has prompted CCL manufacturers to upgrade their production lines to meet the demand for high-end (M4 and above) products. This adjustment indirectly led to a reduction in the supply of CCL products below M4, thus pushing up their market prices.

AI+PC manufacturers are leading a trend of upgrading motherboard materials. These manufacturers have upgraded motherboard materials from standard-loss to mid-loss, resulting in a 15-20% increase in CCL unit price. Companies such as Qualcomm not only specify the components and materials of AI+PC, but also mainly use specific models such as Taiyao's TU862S and Lianmao's IT170GRA1. Except for Samsung, which did not fully follow Qualcomm's recommendations because of Qualcomm's ability to select suppliers independently, other brands accounting for 90-95% of Qualcomm's shipments have adopted Qualcomm's recommended materials.

At the same time, the proportion of Intel and AMD using mid-loss CCL on AI PC motherboards is also increasing, although some models still insist on using standard-loss materials.

The recovery in demand for conventional servers has also brought new growth momentum to the medium- and low-risk CCL market. Many companies such as Broadcom and Xingge have publicly stated that conventional server demand will begin to pick up in the second half of 2024, which will undoubtedly stimulate further growth in demand for medium- and low-risk CCL. Therefore, there should be no rush to stimulate demand for medium- and low-risk CCLs, but rather a gradual increase.

The profitability of mid- to low-grade CCL is affected by rising raw material prices. Another important reason for the CCL price increase this time is the increase in upstream raw material costs. This change is good news for CCL manufacturers, as earnings of mid- and low-grade CCL have been severely squeezed by rising raw material costs in the past few months. Now, through price increases, manufacturers have successfully passed on the cost of raw materials to customers, which is expected to significantly improve their profitability.

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