CITIC Securities: Electronic component supply and demand are expected to remain tight in 2026

CryptocurrencySniper · 2026-02-05T02:01:34+00:00

CITIC Securities research report indicates that by 2026, the supply and demand of 7628 electronic fabric will remain tight, and prices may significantly exceed market expectations, potentially reaching above 6 yuan per meter. The reasons for the tight supply and demand include limited supply growth and sustained demand, especially the rapid development of high-end products. The overall industry is in an upward profit cycle but also faces risks such as macroeconomic fluctuations.

CryptocurrencySniper

2026-02-05 02:01:34

Abstract generation in progress

Citic Securities Research Report states that, from multiple dimensions such as kilns, weaving machines, demand segmentation, and specialty fabrics, the supply and demand situation of traditional electronic fabrics is analyzed. It is believed that by 2026, the supply and demand of 7628 electronic fabrics are expected to remain relatively tight, with price increases likely to significantly exceed market expectations, potentially reaching above 6 yuan/meter.

Full Text Below

Material | Price Increase of 7628 Electronic Fabrics May Significantly Exceed Market Expectations

We analyze the supply and demand of traditional electronic fabrics from multiple dimensions including kilns, weaving machines, demand segmentation, and specialty fabrics. It is believed that by 2026, the supply and demand of 7628 electronic fabrics are expected to remain relatively tight, with price increases likely to significantly exceed market expectations, potentially reaching above 6 yuan/meter.

▍2020–2021 Price Cycle Review of 7628 Electronic Fabrics

According to Zhuochuang Information, from H2 2020 to H1 2021, the tax-included price of ordinary 7628 electronic fabrics rose from 3.2 yuan/meter to 8.8 yuan/meter, an increase of 175%. We analyze that the main reasons are as follows: 1) Slow supply capacity addition. Due to previous poor profitability in the electronic fabric industry, no new capacity was added for over a year and a half, and the cumulative new capacity during this cycle was 130,000 tons (an increase of about 17.4%), with prices peaking. 2) Double-digit demand growth, driven by the recovery of consumer electronics, likely exceeding 10%. 3) Downstream proactive inventory replenishment needs, with estimates indicating that inventory replenishment in the industry chain accounted for 8% during this price increase cycle.

▍2026 Supply and Demand Analysis of 7628 Electronic Fabrics: Expected to Remain Relatively Tight

Supply side: Low dielectric demand crowds out weaving machine capacity. We forecast that the new capacity for traditional electronic fabrics in 2026 will be about 3.2%. From the perspective of additional weaving machine output, we predict that the new output of electronic fabrics in 2026 will be around 11%. Considering the demand for specialty fabrics occupying weaving machine capacity, we estimate the new capacity for traditional electronic fabrics to be approximately 3.2%.
Demand side: High-end iteration offsets decline in traditional demand. We forecast that the demand for traditional electronic fabrics will grow by about 5% in 2026. Under the trend of high-end iteration, demand for high-layer-count PCBs, advanced HDI PCBs, and other high-end products is expected to maintain rapid growth, increasing the electronic fabric usage per unit demand. Additionally, AI PCBs are expected to bring some growth in traditional electronic fabric demand, as structures like OAM and CPU motherboards in NVIDIA AI servers will use certain CCL below M7. We assume that demand from consumer electronics and automotive sectors may decline somewhat, but server demand will continue to grow rapidly, leading to an estimated demand of about 4.1 billion meters in 2026, with a growth rate of approximately 5%.

▍Price Outlook for 7628 Electronic Fabrics in 2026: Likely to Reach Above 6 Yuan/Meter

Looking ahead to 2026, we believe supply and demand are likely to remain relatively tight. Coupled with the catalytic effect of inventory replenishment, the price elasticity of traditional electronic fabrics is not small. Currently, the tax-excluded price of 7628 electronic fabrics is 4.2 yuan/meter. We believe that the peak in 2026 could reach above 6 yuan/meter, depending on the downstream companies’ inventory replenishment efforts. The price of specialty fabrics remains high, prompting companies to adjust their product structures, which also supports rising prices for traditional electronic fabrics. Additionally, the overall industry chain is in a profit-up cycle, which benefits electronic fabric manufacturers in passing on price increases to downstream customers.

▍Risk Factors:

Macroeconomic volatility, rising raw material and fuel costs, irrational capacity expansion, overseas demand recession, lower-than-expected demand and market expansion for high-end products, increasing industry competition.

▍Investment Strategy

We believe that by 2026, the supply and demand of 7628 electronic fabrics are expected to remain relatively tight. Coupled with inventory replenishment and the growth of specialty fabrics, the price elasticity of traditional electronic fabrics is significant. Currently, the tax-excluded price of 7628 electronic fabrics is 4.2 yuan/meter. We expect the high point in 2026 to exceed 6 yuan/meter.

(Source: First Financial)

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.