Morgan Stanley Lifts Copper-Clad Laminate Forecast, Sees $47 Billion Market by 2030
TREE NEWS reports: Kingboard Laminates surged more than 6% to HK$49 in Hong Kong trading on Wednesday, defying a broadly weaker market, after Morgan Stanley published a deep-dive industry report arguing that copper-clad laminate (CCL) and copper foil — two materials long absent from the AI investment narrative — are becoming the indispensable “hidden backbone” of the global compute buildout.
Morgan Stanley now projects the global CCL total addressable market will expand from $19 billion in 2025 to $47 billion by 2030, a 20% compound annual growth rate that sits well above the consensus range of $35 billion to $40 billion. AI and data-center applications are expected to drive roughly 90% of that incremental growth.
The bank initiated coverage on four names with overweight ratings: Taiwan Union Technology (target NT$8,400), Elite Material (NT$2,700), Jiu Ding (NT$730) and Kingboard Laminates (HK$75). JPMorgan had already initiated on Kingboard with an overweight rating and a HK$65 target, forecasting an eightfold increase in earnings per share between 2025 and 2028, driven by rising laminate prices, capacity expansion and a 75% increase in loom capacity.
Not a Commodity Cycle — A Specification Upgrade Cycle
The central argument is that this is not a broad commodity upcycle but a selective, specification-driven materials cycle. Value growth rather than volume growth is the primary engine: Morgan Stanley estimates content value will account for 84% of AI-related CCL growth through 2030, as AI motherboards migrate to higher layer counts and lower-loss materials.
On Nvidia platforms, the bank calculates CCL content per rack rising from $6,695 on GB300 to $18,750 on VR200 and $35,601 on VR300 — generational increases of 90% to 180%. AMD, TPU and Trainium platforms show similar step-ups. Extending the framework downstream, the global PCB market is forecast to grow from $58 billion in 2025 to $135 billion by 2030, an 18% CAGR.
Supply Bottlenecks Extend to 2028
What is genuinely scarce, Morgan Stanley stresses, is certified high-yield capacity — not nameplate capacity. Only a handful of suppliers hold M8+ certification in high-end CCL, including Elite Material, Panasonic, Taiwan Union Technology, Doosan and Shengyi Technology. Moving from M7 to M8 requires simultaneous improvements in low-loss resins, smoother HVLP copper foil, higher-spec low-Dk glass cloth and tighter manufacturing tolerances, narrowing process windows and depressing yields. M8-grade laminate sells for more than twice M7, while M9+ commands 12.1 times the baseline price.
The copper foil constraint is even tighter. The HVLP4 market is projected to grow from under $50 million in 2025 to $2.8 billion by 2030 — a 123% CAGR — with effective capacity concentrated in just five suppliers: Mitsui Kinzoku, Jiu Ding, Furukawa, Fukuda and Copper Foil Luxembourg, totaling roughly 1,000 tons per month. Mitsui Kinzoku alone accounts for 41% of 2026 capacity.
Morgan Stanley models HVLP4 demand jumping from 12,300 tons in 2026 to 39,200 tons in 2027 (+218%) and 52,000 tons in 2028, producing a 31% supply deficit that year and a residual 20% gap in 2028. Converting HVLP2 lines to HVLP4 reduces effective output by more than 40%, and new lines face queues for surface-treatment equipment concentrated among a few Japanese vendors.
Key Takeaways for Investors
- Selective, not sector-wide: Morgan Stanley explicitly frames this as a stock-picking cycle. Even as qualified high-end material tightens, commodity-grade CCL may remain oversupplied.
- Cycle positioning: High-end CCL and HVLP4 foil are described as having “cleared the trough” but not yet reached full profit realization or cycle peak, with mix, pricing and margins improving through 2027–2028.
- Earnings leverage: Elite Material revenue is forecast to compound at 76% and net income at 117% from 2025 to 2028; Taiwan Union Technology EPS at 138%; Jiu Ding’s global capacity share is seen rising from 13% in 2026 to 21% in 2028.
- Cyclical recovery play: Kingboard’s vertically integrated copper foil, glass yarn, glass cloth and epoxy resin chain gives it a cost edge; Morgan Stanley sees H2 2026 net income up 97% year-on-year on E-glass cloth prices that have roughly quadrupled in the past year.
For investors, the message is that AI infrastructure spending is broadening beyond GPUs and networking into the unglamorous materials layer, where certification barriers and yield constraints create durable pricing power for a narrow set of suppliers.
