Tianfeng Securities: AI server development helps replace high-end copper foil domestically produced, focusing on copper crown copper foil (301217.SZ), etc.
The Zhitong Finance App learned that Tianfeng Securities released a research report saying that it is optimistic about the development of the AI industry chain to promote upstream copper foil. This field has great potential in terms of pattern and profit, and is expected to accelerate domestic substitution under the rapid development of demand. Domestic copper foil manufacturers are expected to share industrial cakes. It is recommended to focus on copper crown copper foil (301217.SZ) and Telford Technology (301511.SZ).
Copper crown copper foil: HVLP 1-3 generations have been supplied in batches, and the carrier copper foil has mastered the core technology. The company has a reasonable production capacity layout and leading product technology in the field of high-end PCB copper foil. The company's high-frequency high-speed PCB copper foil has significant advantages among domestic enterprises. Among them, RTF copper foil production and sales capacity ranks first among domestic enterprises. HVLP1-3 copper foil 2025H1 has been supplied to customers in batches, and production continues to grow year on year. HVLP4 copper foil is undergoing full performance testing for downstream end customers, and carrier copper foil has mastered the core technology and is preparing for commercialization and industrialization.
Telford Technology: Plans to acquire Luxembourg and enter the high-end PCB copper foil field. The company's main business is R&D, production and sales of electrolytic copper foil. Currently, it has established close partnerships with customers such as Ningde Times, LG Chemical, BYD, Guoxuan Hi-Tech, and Shengyi Technology. It plans to acquire a Luxembourg copper foil company in '25 to vigorously expand the high-end PCB copper foil field and overseas markets. Luxembourg copper foil has excellent R&D capabilities and customer resources. Currently, it has obtained supply qualifications from the top four global high-speed copper-clad plate companies. Of these, 1 is an exclusive supply cooperation, 2 are core suppliers, and the remaining 1 has supply qualifications. The corresponding end customers are the world's top AI chip manufacturers and cloud vendors.
Q1. Why pay attention to high-end PCB copper foil?
Copper foil is a key raw material for PCBs. High-end products include RTF, HVLP, and peelable copper foil. High-end PCB copper foil refers to a high-performance copper foil material used in high-end printed circuit boards (PCBs) such as high-frequency high-speed circuits. It is characterized by low signal loss, high flatness, ultra-thin/ultra-thick specifications, excellent thermal conductivity, and high compatibility with substrates. It is a key raw material for manufacturing copper clad plates (CCL) and PCBs, which directly affects the signal transmission efficiency, reliability and power carrying capacity of the circuit.
The development of AI promotes demand for high-end PCB copper foil and product iteration, and domestic manufacturers are expected to share the industry's growth cake. About 70% of the global high-end copper foil market is monopolized by Japanese companies (Mitsui, Furukawa) and Korean companies (Solus), and domestic companies are gradually entering the supply chain. Demand for HVLP copper foil has surged in AI servers (the usage of a single unit is 8 times that of traditional servers), and Nvidia's next-generation Rubin platform clearly uses HVLP 5th generation copper foil to support PTFE substrates, driving up value. Domestic copper foil manufacturers have achieved breakthroughs in the field of high-end PCB copper foil, and domestic manufacturers are expected to benefit from this round of AI development, such as Copper Crown Copper Foil and Telford Technology.
High-end PCB copper foil leader Mitsui reports show that HVLP and carrier copper foil can be expected to grow, and profitability is strong. Mitsui estimates the ROIC for the copper sector to be 27%, 39%, and 49% respectively for 24, 27, and 30 years. We believe this indicates a significant increase in profitability and validates the trend of iterative high-end copper foil upgrades.
Q2. What is HVLP copper foil? What are the difficulties? How is the localization process?
HVLP copper foil: means that after being treated by a special process, the surface roughness RZ is strictly controlled below 2 μm. The advantages are low signal loss, high density integration, excellent conductivity, strong thermal stability, and good interlayer adhesion. It is suitable for scenarios such as 5G communication, AI servers, and high-speed data centers (such as HVLP 5th generation copper foil with Nvidia's next-generation AI chip).
Source: Longdian Huaxin Holdings official account, Tianfeng Securities Research Institute
According to Copper Crown Copper Foil, HVLP difficulties are mainly reflected in high equipment precision requirements, long order cycle, complicated production process, high accuracy requirements, high customer certification threshold, and long cycle time.
The process of producing HVLP copper foil is more stringent and precise than conventional standard foil, and the surface roughness of the raw foil is extremely high from the beginning. The specific process covers a series of complex steps such as pickling, roughening, curing, alloying, passivation, and silane coupling. Among them, the core technical challenges mainly include developing and manufacturing raw materials for low roughness wool foil, accurately controlling the growth of copper lumps during roughening and curing stages, optimizing high temperature oxidation resistance during alloying and passivation, and accurately implementing silane coupling agent coating technology.
The HVLP copper foil market is currently dominated by Japanese and Korean manufacturers, and there is plenty of room for domestic replacement.
Globally, Japanese and Korean manufacturers account for more than 85% of HVLP, including Mitsui Metals (Japan), Fukuda Metals (Japan), Furukawa Electric (Japan), and Doosan Group (Korea). Domestic HVLP copper foil started late and is highly dependent on the outside world. With the deep penetration and maturity of 5G technology around the world, and the rapid iterative upgrading of AI technology places higher demands on high-speed data centers and servers, Chinese enterprises are facing unprecedented opportunities in the development and production of high-frequency high-speed copper foil.
In recent years, some companies have achieved breakthroughs in high-end model technology, and the localization process has accelerated. Chinese companies such as Longyang Electronics, Copper Crown Copper Foil, Telford Technology, Nord Co., and Yihao New Materials have completed the development of HVLP products and have begun sample delivery and verification for downstream customers. It is expected that in the future, driven by technological innovation, they will gradually replace international brands such as Japan and South Korea.
Source: Huajing Intelligence Network, Tianfeng Securities Research Institute
Q3. What is the carrier copper foil? What are the difficulties? How is the localization process?
Carrier copper foil (removable copper foil): refers to copper foil with a thickness of 9 μm or less. It is supported by a carrier and can be peeled off during use. It has the characteristics of high tensile strength, good thermal stability, stable and controllable peeling force, and low surface profile. It is mainly used in IC packaging boards, high-density interconnect technology boards, Coreless substrates, IC packaging process materials, and HDI fields. The rapid development of semiconductor chip technology and increasingly advanced manufacturing processes are objectively driving the refinement of IC carrier boards and carrier-like boards in the field of chip packaging to become an inevitable trend.
Source: Longdian Huaxin Holdings official account, Tianfeng Securities Research Institute
Process is the key to the production process. The mainstream process solution for carrier copper foil is the electrolytic copper carrier method, that is, a peeling layer is introduced on the bright surface of the electrolytic copper foil, and the ultra-thin copper foil is prepared using magnetron sputtering or electrodeposition on the surface of the peeling layer. After the substrate is pressed to the ultra-thin copper foil, the electrolytic copper foil and peeling layer used as the carrier are mechanically peeled off.
Thickness ≤ 3 μm to ensure stable removal during the “etching” process to avoid side erosion;
The surface profile Rz ≤ 1.5 μm is also to facilitate full “etching”, and also to achieve high frequency and high speed performance;
The peeling force is stable and controllable, and it is easy to peel off the peeling layer when using thin copper. Too high or too low peeling force will cause actual processing failure.
Source: Longdian Huaxin Holdings official account, Tianfeng Securities Research Institute
Memory chips have opened up market space for copper carrier foil, and the localization process has accelerated significantly. In recent years, as the boom in the high-performance computing and memory chip industry has increased, demand for IC carrier boards has become increasingly strong, opening up market space for carrier copper foil. According to Research Nester, the global IC carrier board market will reach 23 billion US dollars in 2024, and is expected to reach 10.3 billion US dollars by 2037. The pace of development of the downstream industry is accelerating, driving the continuous expansion of the peelable copper market space.
Carrier copper foil is a high-performance copper foil. The technical barriers in the industry are extremely high, and its production technology has been monopolized by Japan for a long time. Japan's Mitsui Kinzoku Co., Ltd. (Mitsui Kinzoku) is the world's largest producer of peelable copper, accounting for nearly 90% of the market. In terms of the local market, with the increase in demand in the high-end IC carrier board market, the prosperity of China's carrier copper foil industry has further increased, and the market localization process has accelerated. Some companies' products have reached the world's advanced level in terms of surface roughness and copper thickness.