Huawei continues to use LCP antennas, and domestic LCP material manufacturers are accelerating localization

From the establishment of 5G commercial use to the acceleration of 5G infrastructure, the demand for key materials and components under the 5G order has entered a period of rapid growth. Among them, based on the high-frequency and high-speed technological innovation of 5G, LCP materials have become the new favorite of the industry, and have a unique advantage in the fields of antenna modules, FPC connectors, etc.

From the perspective of the LCP industry chain, my country has long relied on imports for LCP materials, and 75% of the world's LCP production capacity is concentrated in the United States and Japan. However, due to the continued spread of the global epidemic, the United States has become the country with the largest number of confirmed cases in the world, California has issued a "shelter-in-place order", and many companies plan to suspend production for one month; Japan has announced on April 6 that many places will implement a one-month lockdown.

As the overseas epidemic continues to spread and ferment, the supply of LCP raw materials may be affected. However, based on the continued growth in domestic demand for LCP materials, the localization process of LCP material manufacturers has begun to accelerate.

Huawei's high-end flagships continue to use LCP antennas

Due to the high frequency of 5G mobile phone communications, higher requirements are also placed on antenna materials.

In the 4G era, the flexible circuit board substrate used in mobile phone antennas is mainly PI, but due to the high water absorption, dielectric constant and dielectric loss factor of PI, it is often used in products below 10GHz. In the 5G era, LCP is the best among the currently mass-produced materials in terms of signal transmission performance above 10Ghz, with lower transmission loss, and the loss is further reduced as the frequency gradually increases.

Previously, Jiwei.com reported that among first-tier terminal brand manufacturers, except for Apple's high-end products that continue to use LCP antennas, Samsung mainly uses MPI antennas, which are mainly supplied by Korean manufacturers. Now, Jiwei.com learned from Huaxi Securities that after Huawei used an LCP antenna in the Mate 30 last year, it will continue to use LCP antennas in its P40 series.

Industry insiders said: "At present, due to the high process barriers and low yield of LCP antennas, the cost of a single antenna module is also high, rising from 4-5 US dollars to 8 US dollars. The cost pressure has deterred many Android manufacturers."

"However, this year, driven by 5G, among Android mobile phone manufacturers, Huawei continues to promote the use of LCP antennas. In addition, Micro-Bionics and Xinwei Communication continue to increase their investment in LCP antenna-related products, which will drive Android mobile phones to use LCP antennas." The person added.

According to this trend, the penetration rate of first-tier terminal manufacturers in LCP antennas will gradually increase, driving the continued growth of LCP antenna market demand. However, from the perspective of the LCP antenna industry chain, upstream raw materials and flexible board manufacturers are dominated by manufacturers such as the United States and Japan, and domestic manufacturers participate in the module manufacturing link.

Due to the impact of the current global epidemic, many overseas countries have followed China's example of locking down cities and suspending production to prevent the epidemic. For upstream raw material suppliers of LCP, if production is restricted, it will also have a chain reaction on downstream module manufacturers. Domestic LCP companies are accelerating the breakthrough and verification stage.

LCP raw material supply accelerates localization

Data shows that as of 15:00 on April 8, there were 1,500,830 confirmed cases of COVID-19 worldwide, with 87,706 deaths. Among them, the number of confirmed cases in the United States exceeded 420,000, and Japan has a total of 4,961 confirmed cases, with many places entering a state of emergency.

Under the current epidemic situation, on March 16, six counties in the Bay Area of ​​Northern California implemented "shelter-in-place" epidemic prevention measures; Japan also issued an "emergency declaration" on April 7, and seven prefectures including Tokyo, Kanagawa, Chiba, and Fukuoka entered a state of emergency.

Industry insiders analyzed: "The spread of the international epidemic has brought a huge impact on the production of the global manufacturing industry. The industrial situation in the United States is quite severe, and a large number of factories are closed and suspended. Japan has not disclosed any relevant epidemic information, but based on Japan's position in the semiconductor field, once the epidemic leads to a supply cut of raw materials, the impact on multiple global industries cannot be ignored."

"As the world's largest producer of electronic information products and components, China is facing an overseas epidemic that is impacting the domestic supply chain of electronic information products such as 5G mobile phones, and many manufacturers have begun to seek domestic alternatives," the person further stated. 

According to the "Future Think Tank" report, from the perspective of the industrial chain from LCP resin materials to mobile phone antenna modules, compared with the domestic resumption of work and production, in the links from FCCL, FPC to antenna module manufacturing, domestic manufacturers such as Shengyi Technology, Jingwang Electronics Pengding Holdings, Shuobei, and Dianlian Technology are continuing to produce, but the technical process barriers of LCP film are high. Currently, there are not many resin suppliers on the market that can mass-produce LCP films for antenna modules. High-end film-grade resins are mainly concentrated in Japanese and American companies such as Polyplastics, Celanese and Sumitomo.

It is foreseeable that the LCP resin production capacity of the United States, Japan and other countries accounts for 75% of the world. Under the circumstances that the overseas epidemic affects the production of large raw material manufacturers, the production capacity supply capacity of domestic LCP resin manufacturers is particularly critical. According to incomplete statistics from Jiwei.com, at present, manufacturers such as Pulite, Kingfa Technology, Water Shares, and Ningbo Jujia have successively started production, and the production capacity of LCP materials has increased rapidly.

Among them, Water Co., Ltd., which acquired all of Samsung Precision's LCP business in 2014, is currently the only company in the world that can continuously produce three types of LCP resins and composites, with an annual production capacity of 3,000 tons. Recently, Water Co., Ltd. stated on the interactive platform that its LCP products have been used in some high-frequency communication components, and film-grade LCP is in the customer testing and certification stage.

As a leader in modified plastics, Kingfa Technology has independently developed LCP materials since 2009. It currently has a production capacity of 3,000 tons and will expand to 6,000 tons in the future. Kingfa Technology said on the interactive platform that it has cooperated with 5G communication equipment manufacturers to develop film-grade LCP resins suitable for flexible antennas. After multiple verifications and evaluations by film molding manufacturers, the material performance can meet application requirements and has been exported to Japan in small batches.

In addition, Polytec has successfully developed injection molding grade, film grade and spinning grade LCP resin materials. Among them, injection molding grade LCP resin has been supplied in batches to downstream customers, and at the same time, it has jointly developed specific products such as LCP film and LCP fiber with well-known downstream industry customers. Ningbo Jujia has the production capacity of film-grade LCP resin, and film products are in the pilot stage.