Electrolytic Copper Foil → CCL → PCB Market: Will 5G Commercialization Trigger a New Industry Upcycle?

Electrolytic Copper Foil → CCL → PCB Market: Will 5G Commercialization Trigger a New Industry Upcycle?

On June 6, 2019, China officially issued 5G commercial licenses, marking the country’s formal entry into the 5G commercial era. Large-scale 5G infrastructure construction was expected to kick off starting in 2020, generating broad demand-pull effects across the entire copper industry chain — from upstream electrolytic copper foil and midstream copper clad laminates (CCL) to downstream printed circuit boards (PCBs).

As a core beneficiary of 5G deployment, the PCB industry chain, dominated by electrolytic copper foil → CCL → PCB, has gained strong growth momentum from the communications sector. This article analyzes the market outlook for the full industrial chain, driven by 5G construction and multi-sector terminal demand.

1. Industrial Chain Structure: Value Distribution & Core Functions

1.1 Upstream: Electrolytic Copper Foil

Electrolytic copper foil is the most critical raw material for CCL manufacturing, accounting for roughly 30% of total CCL cost for thick boards and 50% for thin boards. As the conductive carrier in PCBs, copper foil serves two core functions: electrical signal conduction and thermal dissipation.

1.2 Midstream: Copper Clad Laminate (CCL)

Positioned in the middle of the value chain, CCL is the core base substrate for PCB production, making up 20% to 40% of total PCB manufacturing cost. It delivers three fundamental functions: electrical conduction, dielectric insulation and mechanical structural support.

1.3 Downstream: Printed Circuit Board (PCB)

PCBs are applied across a wide range of end markets, with the communications sector accounting for the largest share of demand. Driven by large-scale 5G base station rollout, demand for high-frequency CCL and high-frequency PCB substrates will see substantial growth, as 5G systems operate at higher communication frequencies and wider frequency ranges. High-frequency copper clad laminates remain the dominant substrate solution for 5G PCB applications.

2. 5G Construction: Core Growth Engine for the Entire Chain

Industry projections indicate that by 2024, China’s annual 5G base station investment will exceed 100 billion RMB, with annual new deployments reaching 1 million macro base stations. As 5G network coverage deepens, user penetration rises and 5G services drive higher bandwidth and connection density requirements, demand for 5G small base stations will grow steadily — further fueling growth across the full copper-related industrial chain.

In terms of terminal market scale:

The global 5G PCB market is estimated to reach 116.5 billion RMB, 5.5 times the market size of the 4G era.

At the peak of domestic 5G construction, China’s annual 5G PCB market size will hit 16.1 billion RMB.

3. Multi-Sector Terminal Demand Supports Long-Term Growth

Beyond the communications industry, consumer electronics, automotive electronics, industrial control and medical equipment will also drive sustained demand growth for electrolytic copper foil, CCL and PCBs:

Consumer electronics: PCBs are widely used in home appliances, drones, VR devices and other smart consumer products.

Automotive electronics: PCBs serve as the core carrier for GPS navigation, car audio systems, instrument dashboards, automotive sensors and other in-vehicle electronic devices.

In addition, the slowdown in new energy vehicle subsidies has dampened demand for lithium battery copper foil. To protect profit margins and stabilize output, some copper foil manufacturers have shifted production capacity from lithium battery copper foil to standard electrolytic copper foil, bringing short-term incremental demand support to the electrolytic copper foil market.

4. Industry Revenue & Profit Performance

According to data from Pacific Securities:

In 2018, total revenue of listed companies in China’s PCB industry grew 22.0% year-on-year to 67.465 billion RMB. In Q1 2019, revenue rose 19.2% year-on-year to 16.431 billion RMB.

On the profit side, the industry’s 2018 net profit increased 41.3% year-on-year to 5.859 billion RMB. Q1 2019 net profit jumped 42.9% year-on-year to 1.305 billion RMB.

5. Domestic Substitution & Global Capacity Transfer Trend

Apart from rising end-market demand, two structural trends are driving a new round of growth for China’s CCL industry: accelerated domestic substitution of imported products, and the ongoing shift of overseas CCL production capacity to the Chinese market.

Currently, China’s CCL output accounts for 70% of global total production, and downstream PCB output value makes up nearly 50% of the global total, consolidating the country’s position as the world’s largest PCB and CCL manufacturing base.

6. Short-Term Market Challenges

It should be noted that overall copper terminal consumption remained relatively weak in 2019, exerting certain pressure on the copper foil → CCL → PCB industrial chain. According to SMM research, to maintain production utilization and sales volume, copper foil manufacturers have refrained from raising processing fees, making it difficult to form a comprehensive, industry-wide favorable market in the short term.

7. Long-Term Market Outlook

Looking ahead, 5G will remain the primary growth driver for the communications industry in the coming years, and large-scale 5G base station construction is a deterministic long-term trend. The resulting demand for high-frequency copper clad laminates and upstream electrolytic copper foil should not be underestimated, and will continue to be a key focus for market attention. Supported by multi-sector terminal demand and domestic substitution trends, the overall PCB industry chain maintains broad long-term market prospects.

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