5G brings an additional 60 billion PCB opportunities
After calculation, 5G brings an additional opportunity of over 60 billion for PCB boards. A research report by CFT Securities indicates that the evolution of communication technology brought by 5G will ultimately manifest in the replacement and reconstruction of communication facilities, and will inevitably bring growth opportunities to related electronic component industries.
PCB boards, as the "mother of electronic products", the profound changes in the downstream will benefit the PCB industry. The construction of 5G will undoubtedly become an important driving force for the growth of the PCB industry in the next 2-3 years.
In terms of the overall volume, initially the upgrade wave triggered by 5G has led to a sharp increase in the demand for PCB boards. The Ministry of Industry and Information Technology predicts that 5G mobile phones will be launched in the second half of 2019. Considering that 5G mobile phones still need to be compatible with 4G and are more difficult than 4G mobile phones in the early stage, it is expected that the domestic mobile phone shipment volume will reach 574 million units in 2022, and the shipment volume of 5G mobile phones will reach 144 million units.
Furthermore, since 5G needs to use high-frequency bands for signal transmission, the number of base stations will increase significantly. There are two ways to increase the number of base stations: macro base stations and small base stations. According to the "2018 White Paper on China's 5G Industry and Application Development" released by CaiDi Consulting, it is estimated that the increment of 5G macro stations will reach 3.6-5 million, and the number of small base stations will reach 7.2-10 million. The total number of base stations will be 3.3-4.6 times that of 4G base stations, laying a foundation for a massive growth space.
In terms of unit usage, in the 5G era, due to the explosive amount of information and the demand for high transmission rates, the extensive application of Massive MIMO has led to an increase in the number of antennas, resulting in a greater demand for PCB boards. The increase in PCB board area opens up a broader growth space.
Furthermore, due to the high frequency requirements of 5G, PCB boards need to be made more high-frequency. Currently, the mainstream solution for base station antennas is to use PCB boards made of hydrocarbon materials. The price of such PCB boards is approximately 3,000 - 6,000 yuan per square meter, while the price of ordinary PCBs is about 1,900 yuan per square meter. The unit value has increased by 1.5 - 3 times, and the value of individual boards has significantly increased.
Furthermore, starting from commercial use in 2020, the number of 5G connections in China is expected to reach 428 million by 2025, with a compound annual growth rate of 155.61% over the five years. The explosive growth in data demand has forced communication equipment to increase data processing capacity, and accordingly, PCB boards are expected to develop towards multi-layering, with prices also rising accordingly.
Caitong Securities stated that the changes in base station construction brought about by technological innovations in the 5G era will create new growth markets for electronic products. PCB, as the carrier of components, will benefit significantly. According to conservative estimates, the incremental space created by 5G for PCB will reach 61.8 billion within five years. China's PCB industry is expected to witness massive growth opportunities.
