Shares related to printed circuit board (PCB) manufacturing are experiencing a broad rally.
KINGBOARD HLDG (00148) surged 14.7% to HK$82.3, DELTON (01989) jumped 11.46% to HK$178, KB LAMINATES (01888) rose 9.2% to HK$61.1, and VGT (02476) gained 6.68% to HK$361.
Key Drivers for the Rally
This surge is driven by significant price increases in electronic fabric, a key material for PCBs. Fueled by an explosion in computing power demand, the price of commonly used electronic fabric has undergone five rounds of hikes this year.
By early June, its average price reached 7.4 yuan per meter, representing a 100% increase from the low point in the third quarter of last year.
Supply Chain Pressures
Further pressure comes from supply chain disruptions. The impact of Middle East conflicts is spreading from energy markets to electronics supply chains. A critical industrial zone in Saudi Arabia, which previously supplied approximately 70% of the global PPE resin used in electronics, halted production in late March due to shipping obstructions in the Strait of Hormuz.
Analyst Perspectives on Pricing
Analysts at Citigroup believe the higher-than-expected price surge in electronic glass fabric will quickly translate into inflation for the average selling price of copper-clad laminate, a core PCB material. They expect this to happen as soon as the end of this month.
The price increase for copper-clad laminate is primarily cost-driven, with its main components being copper, electronic glass fabric, and epoxy resin.
A Goldman Sachs report indicated that printed circuit board prices surged by up to 40% in April alone compared to March. Reflecting this powerful industry trend, shares of U.S.-based PCB manufacturer TTM Technologies have soared more than 400% over the past year.
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