Strong AI PCB/CCL demand drives high-speed copper foil upgrades, with HVLP4 and DTH potentially becoming supply bottlenecks

Overview

This report focuses on the impact of expanding AI PCB/CCL demand on the upstream electrolytic copper foil industry. Jefferies believes that rising AI infrastructure capex is driving rapid growth in the total addressable market for AI PCB/CCL, and is also transforming copper foil from a traditional material into a higher-value, higher-technical-barrier high-speed material. HVLP has become the mainstream high-end copper foil solution for AI infrastructure, while demand for DTH in storage, optical modules, and advanced packaging is also rising.

Core views

The core views are: first, AI CCL and HVLP demand will maintain roughly 30%-40% CAGR during 2025-2030; second, AI server specification upgrades will make HVLP4 the next-generation mainstream solution and lift processing fees and ASPs; third, expansion by international leaders may not be fast enough to fully match demand, creating opportunities for Chinese suppliers in customer qualification, capacity expansion, and local equipment support; fourth, CCL makers such as Shengyi Technology may further increase share in the AI CCL supply chain if they can secure diversified upstream material sources.

Analysis framework

The report uses supply-chain decomposition, end-market AI server demand forecasting, PCB/CCL material usage calculations, copper foil specification upgrade paths, capacity plans of major suppliers, and processing-fee comparisons to assess the supply-demand balance for high-speed copper foil, ASP trends, and the segments that benefit.

Methodology notes

• Industry chain analysisAI PCB/CCL upstream material transmission framework

  Starting from end-demand such as AI servers, switches, and optical modules, derive PCB, CCL, and copper foil usage.

  The report treats AI infrastructure buildout as the demand source, first estimating the AI PCB/CCL market and monthly sheet volumes, then mapping that to HVLP copper foil tonnage demand.

• Supply-demand balanceHVLP4-equivalent supply-demand calculation

  Convert capacity for different high-speed copper foil specifications into HVLP4-equivalent capacity and compare it with AI demand.

  The report believes that if only international manufacturers are counted, there will be a shortage in HVLP4-equivalent supply over the next 1-2 years; after including TGCF and Defu, supply may roughly match demand in 2027, but this depends on capacity ramp-up and yields.

• Product upgradeUpgrade path from HTE/RTF to HVLP/DTH specifications

  Measure copper foil upgrades through signal transmission performance, surface roughness, manufacturing difficulty, and price premium.

  The higher the HVLP generation, the lower the transmission loss; DTH is thinner and has a higher technical barrier, and is mainly used in advanced PCB, IC packaging, storage, and high-speed optical modules.

• Price analysisProcessing fee and ASP premium comparison

  Copper foil prices consist of copper pass-through and processing fees, with premium mainly reflected in processing fees for high-end specifications.

  The report estimates HTE/RTF processing fees at roughly Rmb10-20k/30-80k/t, HVLP4 can exceed 10x traditional HTE, and DTH on a weight-adjusted basis is about 2x HVLP4.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Sytech / Shengyi Technology

  Main beneficiary within the coverage universe; participant in the AI CCL supply chain

  Strengths

  As a Chinese CCL maker, it can improve material security through diversified local upstream sources and benefit from Chinese suppliers' more aggressive expansion.

  Weaknesses

  Constrained by tight supply of key materials such as high-end copper foil and glass fiber cloth; share gains depend on supply-chain stability.

  Comparison

  Compared with competitors that rely on international upstream suppliers, local supply-chain expansion may strengthen its supply-security advantage.

  Risks

  If upstream high-end copper foil expansion or customer qualification falls short of expectations, AI CCL share gains may be limited.

• TGCF / Tongguan Copper Foil

  One of China's leading AI high-speed copper foil suppliers

  Strengths

  RTF/HVLP accounted for more than 20% of its copper foil shipments in 2025 and contributed most of its gross profit; it leads in customer qualification and shipments.

  Weaknesses

  It has not disclosed additional large-scale capacity expansion plans, so the future expansion pace may be constrained.

  Comparison

  Compared with Defu, TGCF has a more mature high-end copper foil revenue base and customer foundation.

  Risks

  If HVLP4 mass-production conversion, yields, or customer certification fall short, upside may be pressured.

• Defu / Defu Technology

  Emerging high-end copper foil supplier; AI supply-chain validation in progress

  Strengths

  It has high-speed copper foil production capability and plans to add 50kt of capacity in 2027-2028, focused on RTF/HVLP.

  Weaknesses

  As a relatively newer entrant than TGCF, customer qualification and large-scale shipments still need to be proven over time.

  Comparison

  Compared with TGCF, Defu has a more aggressive capacity-expansion plan and may have stronger equipment acquisition and in-house development capabilities.

  Risks

  New capacity construction, key equipment delivery, HVLP4 conversion efficiency, and yields all entail execution risks.

• Taijin New Energy

  Potential beneficiary in key copper foil equipment

  Strengths

  It has a relatively complete equipment portfolio, including surface treatment machines, and may capture spillover opportunities from insufficient international equipment capacity.

  Weaknesses

  The report does not disclose a clear share or customer order scale in high-end HVLP equipment.

  Comparison

  International key equipment supplier Mifune holds more than 70% share in surface treatment machines, while domestic substitution remains at the introductory opportunity stage.

  Risks

  Equipment technical barriers are high; if domestic equipment performance, stability, or customer qualification is insufficient, the benefit pace may be slower than expected.

• Mitsui Kinzoku

  International leader in HVLP and DTH supply

  Strengths

  Held about 60% of the HVLP2-and-above market in 2025 and more than 95% of the DTH market, with clear technology and customer advantages.

  Weaknesses

  Its 2025-2030 HVLP sales growth guidance of 15%-20% CAGR is below the report's estimated demand growth.

  Comparison

  Compared with Chinese new entrants, Mitsui is technologically leading but has a more conservative expansion outlook.

  Risks

  If demand is significantly higher than expansion, share may leak to others; if it accelerates expansion, opportunities for Chinese makers may be compressed.

Key data

• AI CCL monthly demandAbout 1.8m sheets/month (2025) to more than 9m sheets/month (2030E)Corresponding to roughly 30%-40% CAGR over 2025-2030E.
• HVLP demandAbout 1.3kt/month (2025) to more than 6kt/month (2030E)Driven by AI servers, switches, optical modules, and specification upgrades.
• AI PCB/CCL TAM growthAI PCB about 60% CAGR; AI CCL about 70% CAGR (2025-2030E)Supported by growth in capex on AI infrastructure by tech giants.
• HVLP4 price premiumMay exceed 10x that of traditional HTEBased on Mitsui pricing and processing-fee comparisons.
• DTH price premiumAbout 2x HVLP4 on a weight-adjusted basisDTH is typically priced by area and has a higher technical barrier.
• Main suppliers' HVLP capacityAbout 2kt/month (2025) to more than 5kt/month (2027E)Estimate after including emerging suppliers such as TGCF and Defu.
• HVLP4-equivalent capacityAbout 3.5-4.0kt/month (2027E)Roughly in line with demand at that time, but dependent on supplier execution and yields.
• Mitsui HVLP market shareAbout 60% for HVLP2 and above in 2025Mitsui disclosed HVLP capacity of about 600t/month.
• Mitsui DTH market shareMore than 95%The report believes tight supply may prompt new entrants to be introduced.
• Defu expansion planAn additional 50kt annual capacity in 2027-2028Focused on RTF/HVLP in PCB copper foil.

Impact & implications

AI infrastructure demand is shifting the copper foil industry’s competitive focus from traditional LIB copper foil capacity expansion toward the technology, yields, customer qualification, and key equipment access needed for high-end PCB copper foil. If HVLP4 and DTH supply remains tight, Chinese makers with high-end copper foil mass-production capabilities, key equipment suppliers, and CCL makers able to secure upstream materials may all gain share and see profitability improve.

Risks

• AI infrastructure capex falls short of expectations, causing AI PCB/CCL and HVLP demand growth to undershoot forecasts.
• Major copper foil suppliers' HVLP4 capacity ramp-up, yield improvement, or customer qualification falls short of expectations, delaying supply-gap closure or revenue realization.
• Key equipment, especially surface treatment machines, remains constrained, which could slow high-end copper foil capacity expansion.
• If international suppliers expand faster than expected, the spillover share opportunities for domestic suppliers may shrink.
• If premium pricing and processing fees for high-end copper foil cannot be sustained, industry ASP expansion and profitability improvement may be weaker than expected.
• DTH has a high technical barrier, and the pace of new entrant adoption remains uncertain.
• If AI server specification routes change, the demand mix for HVLP4 or DTH may deviate from the report's assumptions.

What to watch

• The actual adoption pace of HVLP4 by NVIDIA, Google, Amazon and other AI server platforms in the second half of 2026.
• Customer qualification, monthly shipments, and HVLP4 yields of Chinese suppliers such as TGCF and Defu.
• Progress on Defu's 50kt capacity additions in 2027-2028 and its access to key equipment.
• Delivery capabilities of international surface treatment equipment suppliers such as Mifune, and the substitution progress of domestic equipment makers such as Taijin New Energy.
• Whether AI CCL monthly demand continues to grow along the path from about 1.8m sheets/month in 2025 to more than 9m sheets/month by 2030.
• The HVLP4-equivalent supply-demand gap or balance during 2026-2027.
• The upstream material lock-in capability and AI CCL market share changes of CCL makers such as Shengyi Technology.
• Whether copper foil processing fees and the price premiums of HVLP4 and DTH continue to rise.