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Published: 2019
Author: D.Y.
Related stocks: Pottinger (4958) , Taiwan County (6269) , Ka Luen Yick (6153) , DuPont , Damai (3645) , Kaneka (KKA) , UBE , the MGC , SKPI (KOSDAQ: 178 920), Sumitomo (TYO: 4005), Murata , Kuraray , Jinju (8358) , Nanya (1303) , Taihong (8039) , Rogers , New Yangke (3144)
Flexible Printed Circuit Part 2
Brief Discussion on Soft Board Industry
After introducing what FPC is last time, let's talk about the industry situation of FPC this time!
Industry Overview
The entire upstream and downstream supply chain of the FPC industry is roughly divided into the following sub-industries. In each sub-industry, only a few large factories are listed. Of course, there are still many small factories involved, so they are not listed one by one. From this figure, it can be found that in the flexible board industry, the most important upstream raw material polyimide or liquid crystal polymer film is almost controlled by the major manufacturers in the United States and Japan. Only Damai produces polyimide in Taiwan. The ratio is not high. This also gives Japan a great advantage in the production of flexible boards, which can effectively ensure that the supply is free. Even Sumitomo, a large Japanese flexible board manufacturer, has stepped into the production of the flexible board industry from raw materials to finished products. In the past few years, polyimide and When the liquid crystal polymer film is out of stock, it will not suffer too much; in order to break through this limitation, several flexible board manufacturers have also begun to develop upstream raw materials to ensure that future production capacity can be assured. Detailed comparisons of the development of various manufacturers will be analyzed in the next episode.
Soft Board Industry Chain
1. Industry Distribution
From the distribution of various manufacturers in the industry chain, it can be found that the global soft boards are mainly concentrated in Taiwan, Japan, South Korea, China, and the United States. In Taiwan, FPC is concentrated in Taoyuan and Kaohsiung, and Taoyuan is concentrated in Taoyuan because it is an important town for electronic components. The annual output value of electronic components in Taoyuan is as high as 500 billion Taiwan dollars. Therefore, the entire electronic industry cluster in Taoyuan has been formed, supplying all kinds of products around the world. Parts required for electronic equipment.
2. Seasonal factor
As a member of the electronics industry, FPC is also affected by the seasonal demand for electronic products. In particular, the demand of the mobile phone industry, which accounts for the highest proportion of FPC demand, has a deeper impact on the revenue of various companies in the FPC industry. Almost no one can escape. Five poor, six must hang, and seven hang." In the fourth quarter, it is usually the Christmas time and the launch of Apple’s new phones, resulting in a big peak season. In the third quarter, manufacturers of upstream mobile phone components began to stock up in response to the needs of the fourth quarter, generating great demand; the second quarter Because there is no special demand, the performance is usually the weakest; in the first quarter, because the Christmas schedule has just passed, the demand is usually weaker during the inventory adjustment period. Here are the performances of several representative FPC factories in Taiwan, and it is obvious that the performance of the second half of the year will increase significantly.
Changes in monthly revenue of Zhending and Taijun
Cost structure
The operating cost structure of soft boards is the highest among raw materials, labor costs, and manufacturing expenses. Taking Taiwan County as an example in 2018, manufacturing expenses accounted for 44% of the cost. The reason for the highest manufacturing costs in the soft board manufacturing process is the soft board. The production requires more precision instruments. In recent years, the flexible board factory has been expanding. At the same time, in response to the increasing awareness of environmental protection, there are also more pollutants in the factory. These factors increase the manufacturing cost. Fixed costs are also high, and capacity utilization will also greatly affect gross profit. When China continues to increase production capacity and Taiwan factories are also expanding their production capacity, the capacity utilization of various manufacturers will attract attention.
Cost structure ratio of Taiwan county in 2018
Competition and competition for customers
In the FPC industry, due to a large amount of capital investment and technological advancement, it is not easy for new manufacturers to enter, and it is increasingly difficult for small manufacturers to compete with large manufacturers. According to statistics, the total market share of the world’s top 30 FPC manufacturers From 28.5% in 2004, it had increased to 60.5% in 2017, leading to the continued fermentation of the industry leader Evergrande.
It will be more difficult to stand out among increasingly large competitors and limited customers. In the previous chapter, it was mentioned that soft boards are used in smart phones, laptops, automobiles, and medical fields. However, mobile phones still account for the largest use of soft boards, and among all mobile phone manufacturers, Apple also prefers to use soft boards as a solution. Therefore, Apple has benefited a lot from soft board manufacturers, but water-powered boats have been able to overturn the boat. Taiwan Several major manufacturers currently rely on Apple as a single company. Almost all Apple provides more than 60% of revenue. Therefore, in recent years, iPhone sales have not been as sensational as in the past, which may have a negative impact. Fortunately, although sales are not as good as in the past, but the soft board specifications Continuous upgrades also make prices continue to rise.