Electromagnetic shielding materials: benefit from the growth of downstream FPC and the demand for electromagnetic shielding in the 5G era

The main materials of electromagnetic shielding are electromagnetic shielding film and conductive adhesive film. Electromagnetic shielding film is a shielding body made of special materials, which can effectively block electromagnetic interference based on the working principle of reflection or absorption of electromagnetic waves.  Conductive film is a kind of lead-free connection material, which provides mechanical connection and electrical connection between components and circuit boards. It has the characteristics of high peel strength, excellent conductivity, good welding resistance and customized structural design, and is one of the core packaging materials of wireless communication terminals.  

FPC market capacity is driven by 5G and terminal application innovation growth, production capacity tends to move east  

The direct downstream industry of electromagnetic shielding film and conductive film is FPC, and the growth of FPC market directly determines the growth of related upstream materials.  From the perspective of industry space, on the one hand, the 5G era of high frequency and high speed communication promotes the demand for high frequency FPC and the increase of FPC caused by the change of internal structure of domestic machines; on the other hand, the innovation of OLED, 3D Sensor, wireless charging and other terminals will bring new increase of FPC, thus helping to further expand the output value of global FPC.  

From the perspective of industrial pattern, thanks to the cost advantage and the local market demand, the proportion of domestic manufacturers will steadily increase. In the next few years, the growth rate of the output value of PCB/FPC in mainland China will exceed that of the global PCB/FPC.  According to Prismark, the Chinese mainland accounted for 51% of PCB production in 2017, up from 38% in 2010.  Prismark also expects China's PCB output to grow at a compound rate of 3.7 percent from 2017 to 2022, outpacing global growth of 3.2 percent.  

In the 5G era, the consumption of single-chip FPC for electromagnetic shielding film will also increase  

The quality of 5G communication, but the significant increase in the number of antennas and the significant reduction in the size of antennas in high frequency, put forward higher requirements for jamming resistance performance.  At the same time, the future 5G frequency is expected to reach more than 6GHz. In order to support the high frequency band above 6GHz, 5G NR, a new wireless access technology other than LTE, is needed. This new technology will coexist with LTE technology supporting less than 6GHz.  New requirements for electromagnetic shielding materials are put forward.  

FPC in electronic products, as the connection line in electronic devices, mainly plays the role of conducting current and transmitting signals.  When signal transmission lines are distributed in the outermost layer of the FPC, in order to avoid signal distortion caused by electromagnetic interference in the signal transmission process, the FPC presses an integrated conductive layer (electromagnetic shielding film) after the covering film is pressed to shield the external electromagnetic interference.  We expect that in the 5G era of each FPC, the area covered by electromagnetic shielding film and the amount used will continue to increase, so as to better reduce electromagnetic interference.  

The leading position of foreign enterprises in the industry, and actively pay attention to the relevant layout of domestic enterprises  

With the coming of the future 5G era, on the one hand, the output value of FPC will continue to grow, and the trend of flexible plate inside smart phones will continue. On the other hand, the demand for electromagnetic shielding due to the characteristics of 5G communication will also significantly increase, and the market scale of electromagnetic shielding film and conductive film products located in the upstream raw materials will also continue to expand.  At present, the competition pattern in the industry is obviously echelon. The companies with strong strength and high market share in the industry are Tuozida and Toyo Kemei, but the domestic active layout of Lucai New Material has a certain strength and production scale.  

Thermal conductivity materials: The arrival of 5G era the increase of high-power modules in smart phones drives the growth of demand  

Smart phones have graphite heat dissipation modes, metal backplane/frame heat dissipation modes, thermal gel heat dissipation modes, liquid metal heat dissipation modes, and heat pipe heat dissipation modes.  Synthetic graphite materials/film is the use of high thermal conductivity graphite graphite excellent heat conduction performance of the development of the new cooling material, than other schemes, graphite crystals with high temperature resistance, small thermal expansion coefficient, good thermal conductivity, stable chemical properties, the characteristics of the plasticity is big, in recent years is widely used in consumer electronic products, especially after the iPhone,  At present synthetic graphite film has also become the mainstream of mobile phone cooling scheme.  

With the arrival of THE 5G era, the terminal power consumption increases and the nonmetal fuselage drives the demand for thermal conductivity materials  

In the 5G era, power consumption increases, bringing new demand for heat dissipation, and the multi-layer trend of heat sink is expected to continue to strengthen.  According to Digitimes, Huawei's 5G chips will consume 2.5 times the power of current 4G modems, and more and better cooling modules will be needed to prevent phones from overheating.  From the perspective of mobile phone structure, in the current flagship iPhone XR/XS launched by Apple, in order to better heat dissipation of the double-layer motherboard, the front and back sides of the motherboard are affixed with large chunks of heat dissipation graphite, and the A12 chip on the motherboard is also coated with a large amount of thermal silicon grease for heat dissipation.  When the 5G era comes, the demand for these thermal conductivity materials will further increase, and the corresponding graphite sheet is expected to continue to strengthen the current multi-layer trend, so as to promote the continuous improvement of the value of single machine.  

The internal structure of 5G phones is more compact, and the body is becoming nonmetallic, which requires additional heat dissipation design compensation.  On the technical level, on the one hand, the communication frequency needs to be further improved, and then the wavelength will be smaller, combined with air absorption and other factors, the transmission distance of electromagnetic wave will be smaller, and the penetration capacity will be weakened.  5G, on the other hand, will use Massive MIMO technology, which will change the number of antennas from 2-4 in the 4G era to eight or even 16.  Electromagnetic waves will be shielded by metal, which is no longer suitable for 5G antennas as the number of antennas increases and electromagnetic wave penetration becomes weaker.  However, the back cover is one of the two important heat transfer paths of the phone, and its heat transfer ability is an important factor in determining the temperature of the back of the phone.  However, compared with aluminum, glass material has poor thermal conductivity. Therefore, in the era of nonmetalization of 5G body, additional heat dissipation design is required for the rear cover, which increases the demand for thermal conductivity materials.  

At the same time, the compact internal structure design of terminals in the 5G era makes the design of cooling solutions more difficult. The cooling material enterprises with solution design ability will play a more prominent role in the industrial chain in the customer supply system.  

The introduction of innovative applications such as OLED, foldable and wireless charging will lead to a significant increase in thermal conductivity materials  

By sorting out the panel types of the flagship models of the top six mobile phone brands in 2018, we find that the penetration rate of OLED of each flagship model is increasing, while the top-end flexible OLED panel still has much room for improvement.  According to IHS Markit, flexible OLED panels accounted for 10% of global smartphone shipment structures in q3 2018, a low penetration rate.  

Based on the strong demand, flexible OLED production capacity has grown rapidly in recent years. Major panel manufacturers have increased the layout of flexible OLED production line. Samsung has rapidly expanded its production capacity, and Korean LG and domestic panel manufacturers led by BOE have accelerated their pursuit.  According to IHS Markit, the theoretical total production area of flexible OLED will grow at a compound rate of 88% from 2016 to 2021 under current planning.  

For thermal conductivity materials, the increase of OLED permeability will be significantly beneficial.  OLED materials tend to decay when heated at high temperature, so the requirements for heat dissipation are greatly increased.  Apple has applied a large, flat, 0.1mm thick layer of graphite to the inside of the iPhone X's OLED screen.  We expect the demand for thermal conductivity to continue to be released as OLED permeability increases.  

Foldable phones are expected to further unleash OLED demand, thus significantly increasing the market for heat dissipation solutions.  At present, Samsung, Huawei and other high-end defining ability of brand manufacturers are actively layout foldable mobile phones, this field is expected to help the growth of cooling materials market.  

The active planning and layout of foldable mobile phone products by major mobile phone manufacturers confirms that "foldable screen" will be the sure and iterative development direction of the next generation of smart phone products, and 2019 will be the first year of foldable mobile phone, and the related heat dissipation material market is expected to gain new momentum, so as to achieve rapid growth.  

Wireless charging penetration rate is rapidly increasing, promoting the growth of the corresponding cooling material market.  Smartphone wireless charging receiver sales are expected to grow at a compound rate of 32.4% from 2018 to 2024, according to Yole.  

Because of the wireless charging coil in the phone, the iPhone X has a large hole in the center of the steel plate, but this prevents heat from passing through the aluminum plate and impairs the heat transfer ability of the back cover, so Apple makes up for it by sticking a layer of copper foil and graphite on the coil.  According to China Times, the iPhone X uses two to four times more artificial graphite heat sinks than the iPhone8 due to the OLED screen, Force Touch, wireless charging and cooling requirements for some chips.  

In the future, graphite material enterprises and upstream PI membrane related enterprises will grow  

Looking ahead, graphite materials will see significant growth driven by 5G and consumer electronics innovation.  It is estimated that in 2017, the market of smart phones and tablet computers alone will require nearly 10 billion yuan of synthetic graphite thermal conductivity materials. Considering the multi-layer trend, the market size is expected to become three times in 2020.  

The competition pattern of thermal conductivity materials and graphite materials industry is dominated by international suppliers, and domestic manufacturers have made remarkable progress in recent years.  In the international market, the thermal conductivity material industry has formed a relatively stable market competition pattern, which is mainly monopolized by several well-known foreign manufacturers. The thermal conductivity material monopoly enterprises are Bergquist of the United States and Laird of Britain. The high-end customer market of synthetic graphite products is mainly supported by Panasonic, Zhongshi Technology and Carbon Yuan Technology of Japan.  

The domestic market, due to the thermal conductive materials in China started late, in the huge market demand, driven by production enterprises in recent years, the rapid increase of the number of small variety, but the vast majority of enterprises strong homogeneity, technical content is not high, the good and bad are intermingled, product shipped standard did not form the product seriation and industrialization, more fierce competition on price.  

But for domestic enterprises, once the independent brand through the terminal factory certification, with the cost advantage, downstream mainstream domestic die cutting manufacturers will be very motivated to use domestic brand materials, so as to rapidly improve the market share of products, to achieve rapid development.  At present, a few domestic enterprises such as Zhongshi Technology gradually have the ability of independent research and development and production of high-end products, and have formed their own brands and completed the certification in the downstream end customers. In recent years, they are playing an increasingly important role in the supply system of international customers.  

PI(polyimide) film is an important upstream raw material of graphite film. In 2016, carbon Element Technology (high thermal conductivity graphite film revenue accounted for 97% in 2016) and China Stone Technology (synthetic graphite material revenue accounted for 43% in 2016) purchased PI film for 36% and 40% of all raw materials, respectively.  PI membranes will also benefit significantly from the growth of downstream graphite materials in the future.  

Due to the high level and difficulty of RESEARCH and development of PI film for electronic products, foreign enterprises still occupy an absolute dominant position in PI film industry.  To Dupont (Dupont), Japan Ube (Ube), Zhongyuan chemical (Kaneka), Japan Mitsubishi Gas MGC, Korea SKK-OLonPI and Taiwan area damai as the main manufacturers.  Domestic perspective, the mainland more than 50 PI film, single number from domestic PI film industry has formed a certain scale, less demanding of PI film (meet the demand of general insulation and heat dissipation) has been able to mass production, but used in the electronic products demand higher PI film still and there is still a gap for foreign companies, domestic alternative space is still large.  

At present, domestic companies such as Times New Material are actively making arrangements, especially for PI materials required for the future thermal synthesis graphite with greater thickness. At present, domestic companies have been involved in the process, and it is expected to form a large domestic substitute space for overseas enterprises in the future.