The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that no cloth is a key step in the high-speed copper interconnection upgrade, but instead of removing all of the glass fiber cloth from the entire PCB, implementing less/no cloth in specific media layers based on performance and reliability constraints. The bank expects the NVL576 cabinet exchange board to form four combinations of PTFE/hydrocarbon-free CCL and M9 Q-cloth PP/hydrocarbon-free PP, respectively. The all-unwoven solution is expected to be implemented first; the Q-containing cloth scheme is an alternative when processing or supply reliability is insufficient. Driven by NVL576 cabinet shipments, unclothed PCBs, CCL/PP and upstream materials are expected to be released from 2028. Non-woven promotes the concentration of industrial chain value in the CCL/PP link, giving priority to CCL/PP leaders, while also focusing on PCB processing and upstream material growth opportunities.
CITIC Construction Investment's main views are as follows:
No cloth is a key step in the high-speed copper interconnection upgrade, but instead of removing all of the glass fiber cloth from the entire PCB, implementing less or no cloth on specific media layers according to performance and reliability constraints
The interconnection rate of AI cabinets continues to increase, and differences in dielectric constants between glass fiber cloth and resin cause glass fiber effects. Traditional cloth structures are gradually approaching bottlenecks in terms of dielectric uniformity, loss, and signal integrity; removing partial glass fiber cloth can reduce dielectric loss, and support thinner media, laser micropores, and fine lines. Unclothed material forms can be divided into unclothed CCL, unclothed PP/resin film and RCC: unclothed CCL is used for the core board, unclothed PP is used for interlayer insulation and bonding, and RCC/resin film is used for the outer layer of the core plate. As the high-speed CCL grade is upgraded to M10 and above, industrial changes are not only “no cloth or little cloth”, but also that fillers such as resin and spheroidal silicon share dielectric, enhancement, and processing functions with high-grade copper foil. The incremental value is concentrated in the CCL/PP manufacturing process. It is expected that Q cloth will continue to be retained in the M10 and above low distribution plan.
Unclothed applications are divided into two scenarios: computing power PCBs and optical modules. The common goals are to reduce loss and improve signal integrity. The differences are in entry position and material morphology
The computing power PCB uses undistributed CCL/PP, which extends from the signal layer to the core board framework and faces high-rise, large-size exchange boards. The bank anticipates that Rubin Ultra (VR300) NVL576 currently forms four combinations of PTFE/hydrocarbon-free CCL with M9 Q-cloth PP/hydrocarbon-free PP, respectively. The all-unclothed solution combines high frequency performance and material economy, and is expected to be implemented first. The Q-containing solution is an alternative when processing or supply reliability is insufficient. The Core layer has a greater impact on transmission performance than PP. It is expected that the Core will be upgraded first and then gradually promote PP undistributed; the computing board is constrained by packaging and dimensional stability, and is more difficult to import, so the Rubin Ultra (VR300) NVL576 switching board is the most likely scenario to be the first to adopt a fabric-free or low-distribution scheme on a large scale. The optical module uses RCC/non-woven resin film to focus on the outer layer of the core board to achieve microholes and fine lines; 1.6T has already appeared in MSAP and carrier copper foil applications. Zhongji Xuchuang's authorized patent clarifies the RCC+mSAP scheme, Sihui Fuji 800GRCC board has been mass-produced, 1.6T samples have been certified by terminals, and Hongchang Electronics, Xunjiexing, and Novo Pei core materials, etc., continue to promote material certification or research and development, and industrialization visibility is gradually increasing.
Driven by NVL576, unwoven PCBs, CCL/PP and upstream materials are expected to enter the release period starting in 2028
The bank estimates that the 2027E/2028E/2029E unwoven PCB market space is about 105.54/1124.56/160 billion yuan respectively, and the unwoven CCL is about 12.36/116.26/21 billion yuan respectively; supporting PP is 1,086/13.115 billion yuan respectively, and CCL and PP total 23.22/24.741 billion yuan respectively. The market space for upstream materials 2027E/2028E was 584/5.833 billion yuan respectively, of which 2,741 billion yuan was hydrocarbon resin in 2028, accounting for about 47%, making it the most valuable upstream material.
Investment advice
Priority is given to CCL/PP faucets, and emphasis is also placed on PCB processing and upstream material growth opportunities. High-speed copper interconnection is upgraded to less/no distribution, and CCL/PP is expected to become a core beneficiary. At the same time, increasing PCB processing difficulty and growing demand for upstream materials such as resins and spherical silicon are expected to bring new opportunities.
Risk Alerts
Next-generation platform material routes and non-woven penetration fall short of expected risks; processing yield and customer certification progress fall short of expected risks; downstream platform iteration and industrialization volumes fall short of expected risks.