Analysis of Widespread Price Increases in Magnetic Component Raw Materials and Cost Pressures in the Copper Clad Laminate (CCL) Industry

Based on the data and industry information I have collected, I provide you with a detailed industry analysis report:

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Copper clad laminate (CCL), as the core raw material for magnetic components and the PCB industry, its cost structure directly determines the industry’s profitability. According to data from Zhongshang Intelligence Network, the upstream raw material cost structure of CCL is as follows: copper foil accounts for 42.1%, resin accounts for 26.1%, and glass fiber cloth accounts for 19.1% [1][2]. All three major raw materials have shown significant upward trends recently.

: As the raw material with the highest proportion, the continuous rise in copper prices is the main factor driving up CCL costs. A HSBC research report pointed out that the upward slope of copper prices is increasing, which creates sustained cost pressure on CCL manufacturers [1][2].

: The supply of electronic-grade glass fiber cloth has become tight, and Kingboard Laminates explicitly mentioned tight glass fiber cloth supply as the direct reason for the price hike in its price adjustment notice [1][2].

: The prices of chemical raw materials have risen sharply, including various resin materials such as epoxy resin, polyphenylene ether (PPO), polytetrafluoroethylene (PTFE), and hydrocarbon resin (PCH).

As the world’s largest CCL manufacturer, Kingboard Laminates (listed on the Hong Kong Stock Exchange) has announced price hikes three times in the second half of 2025:

Price Hike Date	Price Hike Magnitude	Reason for Price Hike
August 15, 2025	CNY 10 increase per sheet	Emergence of initial cost pressure
December 1, 2025	5% increase for CEM-1/22F/V0/HB products; 10% increase for FR-4 and PP products	Sharp increase in prices of copper, glass fiber cloth, and chemical raw materials
December 26, 2025	10% uniform increase	Skyrocketing copper prices and tight supply of glass fiber cloth

Affected by this news, Kingboard Laminates’ stock price once rose by more than 9%, reflecting the market’s positive response to the price hikes [1][2].

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Shengyi Technology (600183.SS), a leading domestic CCL enterprise, has seen strong stock performance in 2025:

Indicator	Data
Current Stock Price	US$72.40
Market Capitalization	US$17.587 billion
Price-to-Earnings Ratio (P/E)	62.38x
Price-to-Book Ratio (P/B)	11.28x
Return on Equity (ROE)	18.36%
Net Profit Margin	10.70%
Operating Profit Margin	13.94%

Period	Increase
1 Month	+26.44%
3 Months	+30.31%
6 Months	+139.34%
1 Year	+206.26%
3 Years	+382.99%

From the perspective of stock performance, Shengyi Technology’s stock price has increased by more than 200% in the past year, reflecting the market’s recognition of the company’s growth potential in the AI era [0]. However, behind the strong stock performance, the enterprise is facing gross profit margin pressure brought by rising raw material costs.

According to financial analysis results [0]:

• Financial Stance
  : Neutral, with balanced accounting practices
• Debt Risk
  : Low risk
• Liquidity Indicators
  : Current ratio of 1.55, quick ratio of 1.09, indicating strong short-term solvency

The first three quarters of 2025 have seen continuous growth in performance:

Reporting Period	EPS	Revenue	Beat Expectations Margin
Q3 FY2025	0.42	US$7.93 billion	+1.57%
Q2 FY2025	0.36	US$7.07 billion	-
Q1 FY2025	0.24	US$5.61 billion	-

The latest quarterly results exceeded market expectations, but raw material cost pressure remains the main factor affecting profitability.

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A research report from CITIC Construction Investment points out that as requirements for short-distance data transmission continue to increase, PCBs are continuously upgraded, driving upgrades in the upstream industrial chain [1][2]. CCLs are upgrading from M6/M7 to M8/M9, driving the further increase in the domestic market share of upstream high-end resins, glass fiber cloth, and copper foil. NVIDIA has confirmed the use of M9 materials in its 2026 Rubin architecture, and this technology upgrade path brings structural growth opportunities for the CCL industry. HSBC’s report points out that as AI server iteration accelerates, it drives the core components PCBs and CCLs into a cycle of both technological and price increases [1][2].

1. High-End Capacity Crowding-Out Effect
   : 1 unit of high-end CCL production capacity requires occupying 4-5 units of ordinary capacity, leading to an increasingly tight supply of mid-to-low-end CCLs.

2. Dynamic Supply Contraction
   : Rising copper prices will lead to dynamic supply contraction of CCLs, exacerbating the tight supply-demand situation.

3. Slow Overseas Capacity Expansion
   : Compared to the active capacity expansion of domestic leading enterprises, the capacity expansion speed of overseas CCL manufacturers is relatively slow, providing market expansion opportunities for domestic leading enterprises.

A research report from Guojin Securities points out that strong AI demand has driven both price and volume growth of PCBs, and many AI-PCB companies have strong orders, full production and sales, and are vigorously expanding production [1][2]. HSBC judges that CCL price hikes are sustainable, and the performance improvement brought by price hikes is expected to start to be reflected in the fourth quarter. The industry generally believes that ‘price hikes’ will be the main theme of the CCL industry in 2025-2026.

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Leading enterprises have successfully passed costs downstream by virtue of their market position and pricing power. The successful implementation of three consecutive price hikes by Kingboard Laminates proves the ability of leading industry enterprises in price transmission.

: The concentration of the CCL industry is higher than that of the downstream PCB industry, and leading manufacturers have strong pricing power to smoothly transmit price changes [1].

: Enterprises improve profitability by increasing the proportion of high-end products:

• High-performance materials such as M8/M9 have higher gross profit margins
• Benefiting from the iterative demand of AI servers, demand for high-end products is strong
• Product differentiation brought by technological upgrades can reduce price competition pressure

:

Upgrade Direction	Upgrade Content	Beneficiary Suppliers
Glass Fiber Cloth	Upgrade to Q cloth/quartz cloth	Felicity, Sinoma Technology, Macro & Tech
Copper Foil	Upgrade to HVLP4 copper foil	Defu Technology, Longyang Electronics, Tongguan Copper Foil
Resin	Upgrade to hydrocarbon resin	East Material Technology
Filler	Double the usage of spherical silica powder	Lianrui New Materials
Drill Bits	High hardness of Q cloth leads to high drill bit wear	Dingtai Hi-Tech, China Tungsten High-Tech

:

• Shengyi Technology
  : Ranked first in domestic market share, the only one to pass overseas M9 material verification
• Nanya New Materials
  : Ranked second in market share
• Jin’an Guoji Technology
  : Ranked third in market share
• Kingboard Laminates
  : World’s largest CCL manufacturer (listed on the Hong Kong Stock Exchange)

Overseas main competitors include Taiko Electronic Materials (Taiwan), Nanya Plastics (Taiwan), Panasonic Electric Works (Japan), Rogers (US), Doosan Electronics (South Korea), Mitsubishi Chemical (Japan).

Enterprises optimize supply chain management through the following methods:

• Establish stable cooperative relationships with suppliers
• Sign long-term framework agreements to lock in prices
• Optimize inventory management to reduce the impact of procurement cost fluctuations
• Adopt a diversified supplier strategy to spread risks

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According to a research report from Soochow Securities, the AI-era hardware industry chain is seeing both volume and price growth, and the following beneficiary targets are recommended:

Industry Chain Segment	Beneficiary Targets
PCB	Sunhung Technology, Kinwong Electronics
CCL (Copper Clad Laminate)	Shengyi Technology
Electronic Cloth	Felicity
Copper Foil	Tongguan Copper Foil

1. Slowdown in AI Computing Infrastructure Construction
   : The current high industry boom is largely driven by AI computing power demand. If the commercialization of downstream AI large models falls short of expectations, it may affect upstream demand.

2. Risk of Intensified Industry Competition and Price Wars
   : With the capacity expansion of some mature processes and consumer electronics segments, market competition may further intensify.

3. Risk of Upstream Raw Material Price Fluctuations
   : If raw material prices continue to rise and cannot be effectively passed on to the downstream, it may compress enterprise profit margins.

4. Exchange Rate Fluctuation Risk
   : For export-oriented enterprises, exchange rate fluctuations may affect profitability.

5. AI Innovation and Application Implementation Falling Short of Expectations
   : Slower-than-expected technological iteration may affect the growth of demand for high-end products.

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The widespread price hike of magnetic component raw materials has created significant cost pressures on the industry, but leading enterprises are expected to navigate the cycle by virtue of the following advantages:

1. Pricing Power
   : The industry has a relatively high concentration, and leading enterprises have the ability to pass on costs to the downstream
2. Product Upgrades
   : AI-driven technological upgrades have brought growth in demand for high-end products, which can improve product structure
3. Scale Effects
   : The production scale advantages of leading enterprises can partially offset the pressure of cost increases
4. Technological Barriers
   : The technological barriers of high-end materials such as M8/M9 help maintain high gross profit margins

For investors, it is recommended to focus on targets with the following characteristics:

• Leading enterprises with high-end material certification capabilities (such as Shengyi Technology)
• Enterprises with full order books and high capacity utilization rates
• Material suppliers occupying core positions in the AI industrial chain

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[1] World Journal - Chinese “Copper Clad Laminate” Leader Raises Prices Again, with a 10% Increase (https://www.worldjournal.com/wj/story/121347/9236462)

[2] United Daily News - Mainland Copper Clad Laminate Leader Kingboard Raises Prices Again, Third Price Adjustment in the Second Half of the Year with a 10% Increase (https://money.udn.com/money/story/5603/9233367)

[0] Jinling AI - Shengyi Technology (600183.SS) Company Overview and Market Data