CICC released a research report stating that AI is driving PCB products to upgrade towards higher aspect ratios and multiple blind/buried vias, boosting demand for AI PCB electroplating copper powder materials. Both volume and price increases are driving rapid profit growth in the industry, with strong long-term growth certainty. Short-term capacity tightness suggests the sector is entering a boom cycle. Key insights from CICC include:
AI PCBs are accelerating profit growth in copper powder processing fees. Copper balls and powder are essential PCB electroplating materials, accounting for 6% and 13% of PCB costs respectively. AI PCBs feature significantly increased board thickness, layer counts, and exponential growth in blind/buried vias, alongside more complex hole-filling processes and thicker copper plating standards. To address electroplating uniformity challenges from high aspect ratios, the proportion of copper powder usage is trending upward. By 2029, copper powder's share in PCB electroplating materials is projected to rise from 15% to over 27%. Copper powder processing fees are 4-5 times higher than copper ball fees, significantly boosting industry profits.
Stable supply and surging demand may trigger short-term processing fee hikes. In copper powder technology, Japanese and Korean firms maintain leadership in purity and particle size control. Domestic producers Jiangnan New Materials and Taixing Smelter currently operate at 30,000/14,500-ton capacities respectively, while Guanghua Technology exceeds 10,000 tons. Over 30,000 tons of new domestic capacity is expected by H2 2026. From late this year to H1 next year, tight supply-demand dynamics amid strong downstream demand could push processing fees higher.
Regulatory approvals and extended expansion cycles constrain capacity growth. Jiangnan New Materials' IPO filings reveal copper powder processing fees ranging ¥8,400-10,400/ton in this highly concentrated market with few players. Production involves four key processes: copper dissolution, ammonia evaporation, sintering, and powder screening, with core equipment including dissolution tanks, crystallization tanks, and drying furnaces. While equipment localization has improved significantly, approval and expansion timelines may exceed one year.
Risks include weaker-than-expected downstream demand, raw material price volatility, technology iterations, intensified competition, and slower domestic substitution progress.
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