Recently, the board of directors of CCL (Copper Foil Substrate) Plant Optoelectronics approved the issuance of convertible corporate bonds with an upper limit of 3.5 billion yuan (NTD, the same below) for market financing. Together with the 6.5 billion cash capital increase completed by Lianmao at the beginning of this year, the two major CCL plants have raised up to 10 billion to actively expand production. The main purpose is to focus on the demand for soft and hard boards and IC carrier boards for 5G communications, information industry, and automotive technology upgrades.
According to a report from Juheng.com, Taihong, Lianmao, and Taiguang Optoelectronics all have high market competitiveness, and the commercial transfer of 5G communication technology, and the accelerated development of industrial technology detonated the increase in market demand, allowing upstream material plants to become the largest ever. The situation has forced small and medium-sized CCL factories to withdraw one after another.
Currently, Taiwan Optoelectronics has a monthly production capacity of 3.55 million units and will continue to expand the production capacity of its Huangshi plant in Hubei, China. The 600,000 additional new production capacity is expected to be launched in the first half of 2022.
Taiwan Optoelectronics also plans to increase its monthly production capacity by 450,000 sheets at its Kunshan plant. The new production capacity is expected to be opened in mid-2023, by which time the total production capacity will be expanded to 4.6 million sheets.
Taiwan Optoelectronics has a market share of about 6% to 8% in Purley servers. The market share of Whitley server platforms has reached 20%. It is estimated that the market share of Eagle Stream platforms can maintain 20%. In addition, the company has benefited from the increase in the number of layers of Whitley server boards, coupled with the increase in material numbers, which has led to an increase in unit prices, and switch products have also entered new customers. It is expected that the proportion of infrastructure product revenue will increase from 25% to 30% to 30% ~35%. After Eagle Stream is launched next year, the proportion of infrastructure revenue is expected to continue to increase.
As for the expansion of the second phase of the plant in Jiangxi, Lianmao Electronics has gradually opened up in the first half of this year and produced high-end front-end materials. The production capacity has reached 1.2 million pieces. The third phase of Jiangxi investment plan initiated by Lianmao will increase production by 1.2 million pieces per month, which is equivalent to doubling the production capacity, which is the total production capacity of the first and second phases. After completion, the monthly production capacity of the Jiangxi plant will reach 2.4 million.
Lianmao Electronics has stepped into the field of carrier board materials. Currently, the samples will be mainly based on BT types such as memory. Mao's investment in production expansion will drive operations to increase after all-new production capacity is in place by 2023.
The Intel Eagle Stream used in the new server platform and the high-speed materials of AMD Zen4 Genoa have been certified for the sports performance of Lianmao next year. Based on the current industry development trend, once the chip is shipped in large quantities, it will drive sales. It is currently estimated that the chip mass production time will be in the second half of 2022. In the use of copper foil substrates in the new server, the number of layers has been increased from 12 to 16 layers in the previous generation platform, and the use of materials requires the addition of lower loss, and Lianmao's performance will also receive a lot of attention.
Lianmao estimates that the revenue of copper foil substrates from Netcom, base stations, and server-side applications in 2022 may be double-digit annual growth compared to this year; Netcom products will contribute 55% of Lianmao's revenue this year, and the estimated increase in 2022 will be 55- 60%.
As for automotive electronic materials, Lianmao's low-loss poplar material used in ADAS continues to increase its volume to major European and American customers at a double rate, and it will continue to increase its volume in 2022. In addition, Lianmao has also started small-scale production of high-speed materials required for image computing processors for electric vehicle-related applications, and it is expected to accelerate the volume in 2022. Lianmao expects that with the rapid deployment of 5G networks in the future, the demand for high-speed and high-frequency materials for automotive electronics is expected to continue to expand.
In addition to Taiwan Optoelectronics and Lianmao, Xinxing, Jingsus, and Nandian are all actively expanding IC substrate production capacity in Taiwan. Zeng Zizhang, chairman of Xinxing, said that it is estimated that the carrier boards will be as prosperous as semiconductors in the next 2-3 years. Among them, the supply of BT carrier boards will not be balanced until 2024, and the supply of ABF high-end carrier boards will be tight until 2026.
It is reported that Intel has proposed to increase subsidies to Xinxing Electronics, requiring it to install mature process equipment in advance and commercialize new ABF carrier board production capacity as soon as possible. Xinxing Electronics has greatly increased the value of its equipment orders from 5.84 billion to 12.4 billion, and the delivery period has been extended to 2023.
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