EIPC members to increase the cost of raw materials, and the influence of copper clad laminate and prepreg potential supply constraints and other issues more and more attention, held in Salzburg EIPC2017 winter meeting, held a special group meeting to discuss the global PCB industry raw materials supply chain are facing serious problems, especially is a manufacturer of electric vehicles caused by the surge in demand for lithium battery electrolytic copper foil supply shortages.

As a leading specialist in CCL technology, manufacturing and supply, EIPC chairman Alun Morgan gives his analysis and insights into current and anticipated PCB CCL markets, with a lively format and a rich content. The members of his group from Technolam AndreasFolge, from Isola KarlStollenwerk and from Ventec ThomasMichels, his audience and an important figure - FrancoisBottazzi from Circuit Foil.
Morgan pointed out that the shortage of raw materials from the global, regional and domestic countries was echoed. Obviously, the discussion was first aimed at Europe only. At present, there is only one manufacturer of electrolytic copper foil in Europe, and all manufacturers of electronic grade fiberglass cloth have dropped out and there is no foundation resin manufacturer. In the UK, the exchange rate issue was caused by the recent European referendum, which led to a two figure decline in import prices.

The first question he raised at the meeting was about the safety of the supply chain. What do they look like? Can the PCB industry obtain production related raw material supplies?

From one of the only European two CCL manufacturer's perspective, Isola KarlStollenwerk emphasized the fact that the CCL market in Europe and did not develop, and before considering the location in the world of European PCB industry, should be aware of this fact. Morgan said that in the past few years Europe's production has been very stable, everybody believes that taking a cautious pragmatic approach, the yield can remain at current levels, but the current situation of supply chain caused by panic may cause the collapse of the stable system. Stollenwerk added that in 2000, the European market for CCL was 21 million square meters, of which only UK output reached 6 million square meters. Today, the total copper production in Europe is only 5 million 600 thousand square meters. And in 1987, there were 23 copper clad manufacturing plants in Europe, and now only two are left.

Technolam is the sole distributor of copper clad copper producers in South Asia, and AndreasFolge from Technolam analyzes the situation in a different light. The most critical issue at present is the supply of electrolytic copper foil, which has become a limiting factor in asia. South Asia is the only three copper clad copper manufacturer to produce copper foil in the world. Each company that works with it relies on the good reputation of the three copper foil suppliers. Because they found that the battery industry is more commercial value - lower cost and higher prices. Some Chinese manufacturers of CCL have greatly extended the downtime of the lunar new year because of the supply of electrolytic copper foil.

ThomasMichels is responsible for the European operations of the global CCL company Ventec Teng Hui Electronics, which is located in china. He agrees with the current state of the supply of electrolytic copper foil. The first question is no longer the price, but whether the material can be supplied or not. Over the years, the consumption of lithium battery copper foil has increased considerably, and additional copper foil production facilities are expected to be put into use in late 2017 or early 2018. However, the shortage of copper foil will continue. The production of copper foil has been assigned to the shop floor, and the delivery time has been extended from the original 2 week ~3 week to 3 months. With regard to the selection of copper foil thickness, the production allocation is based on tons, while the copper clad laminate manufacturer's production is in square meters, and the premium price of copper is not very high.

He also expressed concern about the future supply of Electronic Fiberglass fabrics, as the kilns were shut down, and fibers 7628, 2116 and 2113 would be limited. Why does the glass kiln stop working? The official explained that it was due to the necessary routine maintenance, and that the maintenance of the chiller would take place every 5 to 7 years. The three main kilns were affected in the same year. It may not be a coincidence, but in any case, the result is an emergency supply of fiberglass cloth for the CCL makers.

FrancoisBottazzi is the only European manufacturer of electrolytic copper foil. Morgan invited him to make a presentation on the market on behalf of the company. Bottazzi believes that China's demand for lithium battery copper foil is very large, many of the metal foil suppliers in Asia have decided to switch to lithium battery copper foil manufacturers, which caused the current tight supply situation. In Europe, the market has not continued to grow, but has remained at a steady level. Circuit Foil produces 820 tons a month, and we intend to continue selling 30% of it to the European market. The company did not produce a large number of lithium batteries, copper foil, and there is no such plan. "Because the Circuit Foil is now a Hanziqiye, it will directly to the company provided that material" was the Bottazzi retort, he ensured CircuitFoil acquisition is not for this purpose, and the company will continue to focus on the European market. The company's strategy is to focus on the production of special metal foil, 50% of its products can achieve low loss, high frequency applications. Aware of the increasing demand for heavy metal foils, they are also more motivated to continue this field. But want to improve the productivity of metal foil is very difficult, because the metal foil electrodeposition requires the use of a drum, two of the leading suppliers of such cartridges are located in Japan, and they have a waiting list to 12~18 months later.

How to meet the demand of metal foil productivity of this problem, Andreas Folge and some reasonable assumptions based on facts, do a simple arithmetic to demonstrate a conservative estimate of the global scene: he will produce one million electric cars, each car will need 25 kilograms of copper, which is equal to the amount of copper a year need 25000 tons. Considering the fact that only about 25 electro deposition drums can be manufactured and installed each month, 15 of them are used for maintenance and renovation. As a result, the drum output for production is at most 10 per month. If 1 tons of copper foil can be produced per barrel each day, the 10 tubes can produce 300 tons of copper foil per month. Suppose that 10 cylinders were installed in January, with a monthly output of 300 tons. In February, 10 additional cylinders will be installed and another 300 tonnes will be produced. The cylinder installed in January has already produced 600 tons of copper foil, plus 300 tons in February, thus producing 900 tons of copper foil in the world as an additional output. If the process continues for one year, capacity growth of 23600 tons / year will be achieved. According to his estimate, the increase in demand for electric cars will consume the entire capacity growth of copper foil, and any delay in the supply of the roller will cause a shortage of supplies. As a result, copper supply is unlikely to improve over the next twelve months. He further commented that the OEM contract, which was settled in the fourth quarter of 2016, did not take full account of cost increases and configuration fluctuations, which have already had an impact on European manufacturers. He also believes that if manufacturers can not break the current situation, then our industry there is a further risk of being weakened.

KarlStollenwerk reflects their employees over the years the industry ups and downs (mainly the decline), he believes some background facts for all participants who are familiar with, we should reflect on these background, what can we do to ensure that the European market to survive. In 1996, the last glass kiln in Europe was shut down, and since then, no more fiberglass cloth has been produced in europe. At present, there are only three glass factories in Europe, and none of their products can be used in the electronic product market. In fact, Isola had to sell its fiber business a year ago because the business was not profitable. As a result, Europe will no longer be able to produce electronic grade fiberglass cloth. Two years ago, there were two copper foil manufacturers in Europe, but then Gould stopped production and Circuit Foi was bought by Doosan. As he mentioned earlier, the European manufacturers of CCL dropped from 23 in 1987 to only 2 now.

Prior to the meeting, Stollenwerk stressed the need to protect the supply chain. In view of the current situation, he is inclined to consider whether to continue to seek to retain the supply chain in europe. In the global laminate market, the European market is no longer dominant, and now accounts for less than 5% of the market share. But he also believes that through good cooperation, the industry can still operate very quickly. Problems remain in the short run, but in the long run, new capacity investment will have an impact on the global market, although the impact may not necessarily be related to the European market. The dollar also had an additional negative impact on the euro. "We have production capacity in Europe, but we can't guarantee that the supply chain can continue to operate or operate properly, thus producing profits.". Therefore, we should not only consider the amount of supply, timely meet our demand, but also to ensure that the supply chain can function properly. If our raw material supply chain does not function properly, things will be difficult. So we have to be very careful about that. Maybe only 5% of the market share is a good thing for us. Low yield helps us to see the true level of supply chain. We had a supply chain crisis in 2000, but at least we had a supply chain in Europe at that time. Now, we face a crisis again, but our supply chain is no longer able to fill the gap."

Alun Morgan said, 2000-2001 PCB manufacturers hoarding materials so that the situation is very complex, the other market also has a huge impact, since when the market declined again, inventory will become not worth a hair. Thomas Michels PCB urged manufacturers not to hoard a lot of material, because this will only make the situation worse, PCB manufacturers should work closely with suppliers, inform each other their own demand, so as to ensure the normal operation of the supply chain. Morgan believes it is important to encourage the cooperation of parts of the supply chain, and he also emphasizes the importance of EIPC in promoting cooperation and promoting the development of electronic products in europe.

Source:Pete Starkey，I-Connect007