CITIC SEC has released a research report stating that para-aramid fiber, as one of the three major high-performance fibers, offers numerous advantages and has extensive downstream application fields. With technological advancements creating favorable development opportunities for para-aramid, it currently presents a mature technical solution as a PCB substrate material. Combining multiple strengths with high cost-effectiveness, it may have significant growth potential in the future. The firm maintains a "Stronger than the Market" rating on the aramid industry and actively recommends leading companies within the sector. By taking a macro view of industry cycles, a meso-level approach to positioning in high-growth segments, and a micro-level focus on selecting stocks with high earnings certainty, the report outlines two primary investment themes: First, prioritize targets with high earnings growth and continuously digesting valuations. Second, concentrate on industry leaders and core beneficiaries for the medium to long term. The main points from CITIC SEC are as follows:
Para-aramid fiber, as one of the three major high-performance fibers, offers numerous advantages and has extensive downstream application fields. Compared to the most commonly used copper-clad laminate reinforcement material, glass fiber cloth, aramid fiber or aramid paper possesses several prominent benefits: 1) Aramid paper is many times stronger than glass fiber paper; 2) Aramid is an organic reinforcement material, making it more suitable for laser drilling processes compared to inorganic glass fiber cloth; 3) Aramid is approximately 30% lighter in weight, which aids in the lightweight and flexible design of electronic products; 4) Aramid has a lower dielectric constant, which helps improve the high-frequency characteristics of the board, making it suitable for high-end, high-frequency, high-speed PCB boards; 5) Aramid exhibits planar thermal shrinkage properties, which can reduce the in-plane coefficient of thermal expansion of the board, facilitating higher density in electronic products, and it can be used for various IC packaging substrates.
Para-aramid has mature applications as a PCB substrate material but has not been widely adopted due to limitations such as high cost. The use of aramid as a PCB electronic fabric dates back early. In the 20th century, Japan's Teijin Limited collaborated with Oji Paper Company and Shin-Kobe Electric Machinery Co., Ltd. to develop a series of reinforcement materials for leadless ceramic chip carriers, creating specialized PCBs for the electronics industry. Panasonic's Electronic Components Division used Oji Paper Company's para-aramid paper to manufacture substrates for high-density interconnect applications, inventing a unique process known as the ALIVH (Any Layer Interstitial Via Hole) process, which was the first generation. Subsequently, Panasonic Electric Works' ALIVH process became increasingly mature, utilizing DuPont's Thermount dry-process aramid non-woven fabric as the electronic cloth. Using this technology, Panasonic Electric Works developed the world's thinnest, lightest, and smallest mobile phone PD series at the time. Aramid non-woven fabric, as a substrate material, features low dielectric constant and light weight. Additionally, leveraging its low coefficient of thermal expansion and smoothness, it holds potential for manufacturing MCM substrates for flip-chip mounting. Therefore, aramid fiber spun directly into non-woven fabric or processed into aramid paper can both be used as PCB electronic fabric, representing two different technical routes. Later, due to drawbacks such as high aramid cost and high moisture absorption, the industry gradually shifted towards glass fiber cloth.
Aramid prices have declined significantly, offering a cost advantage as a PCB material. According to data from the General Administration of Customs, the price of para-aramid has dropped substantially in recent years to around 100,000 yuan per ton. When processed into aramid non-woven fabric or aramid paper for PCBs, the cost is lower than that of low-Dk glass cloth or Q-cloth, indicating strong application potential. The firm believes that as PCB processing requirements increasingly demand lower CTE, lower dielectric constant (Dk), lower dielectric loss (Df), high strength, and high cost-effectiveness, aramid fiber cloth or aramid paper is expected to replace some glass fiber cloth, becoming a new development direction.
Risk factors include slower-than-expected expansion into new applications; significant fluctuations in material costs; increases in labor costs; technological development progress falling below expectations; and intensifying competition.
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