铜箔将受益于AI对HVLP需求的激增。

Equity Research China (PRC) | Electronic Components Copper Foil to Ride on AI HVLP DemandSurge; Initiate on Defu/TGCF We forecast copper foil (key material for PCB/CCL) TAM will expandby ~15% CAGR to US$55bn by 2030, driven by 30-40% CAGR in high-end product - HVLP shipment for AI infra buildout. Spec upgrades fromHVLP1/2/3 to HVLP4 should drive higher copper foil value. Tight supplyshould create opportunities for Chinese vendors of high-end copper foil. Copper foil to move in step with AI PCB/CCL.Echoing our previous initiation on PCB (Link),we forecast ~60% CAGR for AI PCB TAM in 2025-30E driven by sharp rise in AI-related capex.This trend also brings structural changes to electrolytic copper foil as one of the key upstreammaterials for PCB/CCL. We forecast global copper foil TAM will grow from Rmb192bn in2025 to Rmb371bn (~US$55bn) in 2030. HVLP (hyper very low profile) is a critical, but moreexpensive high-speed product for AI infra with higher technical barriers vs traditional copperfoil. We expect market demand for HVLP to grow from ~1.3kt/mo in 2025 to >6kt/mo in 2030 Spec upgrade to boost ASP.Major AI players (NVIDIA/Google/Amazon) are expected toupgrade their copper foil spec from HVLP1/2/3 to HVLP4 in their new AI servers in 2H26,creating significant demand for the latter. The 2025-30 HVLP volume CAGR outlook of15%-20% at Mitsui Kinzoku, the world's largest HVLP vendor, means an undersupplied market Chinese vendors are gaining traction in AI copper foil.As the surge in AI capex has createdan industry shortage, we believe Chinese players' ability/willingness to rapidly expand capacitywill become a key advantage, allowing them to gain more traction in high-end copper foil. Weanticipate a notable supply gap in the next 1-2 years if we count only non-China capacity. Butby including the capacity of TGCF/Defu as emerging suppliers of high-speed copper foils, theglobal HVLP capacity will likely rise from ~2kt/mo in 2025 to >5kt/mo in 2027 (or 3.5-4.0kt/ Initiate on Defu/TGCF at BUY; Defu our top pick.We initiate on Defu/TGCF. Both are leadingChinese players in AI copper foil on customer verification and shipment volume. TGCF is nowleading in HVLP (already passed HVLP4's qualification) with high-end products contributingmost of 2025 profit, thus the market sees it as a direct AI beneficiary. For Defu, aside from high-speed copper foil capabilities, it has an active capacity expansion plan (another 50kt capacityin 2027-28 focusing on high-end), potentially bringing greater long-term upside, and hence werank Defu above TGCF. Both are under-researched with very limited sellside coverage. Despitethe rise in share prices over the past months, we think there are potential positive factors Jacky He * | Equity Analyst+852 3743 8084 | jacky.he@jefferies.com Edison Lee, CFA * | Equity Analyst852 3743 8009 | edison.lee@jefferies.com Carlos Furuya ^ | Equity Analyst+81 3 6830 3618 | cfuruya@jefferies.comNick Cheng * | Equity Analyst +852 3743 8750 | nick.cheng@jefferies.comMatt Ma * | Equity Analyst852 3767 1109 | matt.ma@jefferies.com Annie Ping, CFA, FRM * | Equity Associate+852 3767 1273 | annie.ping@jefferies.com Summary of Changes Table of Contents Glossary of Terms Executive Summary Global copper foil TAM to expand by ~15% CAGR to 2030E; AI high-speed products as key boostersIn our previous deep dive report on the PCB industry (Link), we forecast ~15% CAGR in 2025-30 for the global TAM of PCB mainly driven by ~60% CAGR of AI PCB TAM, as AI infrastructuregrowth is likely to continue to be supported by tech giants' rising capex plans. We believe thistrend has also brought structural changes to electrolytic copper foil, which acts is one of the keyupstream materials for PCB/CCL to be adopted on server, switch, optical transceiver etc. In additionto PCB, copper foil is also widely adopted in lithium battery, and we observe the industry demand isaccelerating as well, further fueling the expansion of copper foil's market size. We forecast ~15% Soaring ASP from spec upgrade a key driver of growth in TAM After years of product evolution, HVLP, as a typical high-end copper foil, has been upgraded from theinitial gen 1 to gen 4 which has now been gradually deployed in mass volume. Our channel checkssuggest major AI players including NVIDIA, Google and Amazon will largely transfer their copperfoil spec on compute/switch boards from originally HVLP1/2/3 to HVLP4 on their upcoming newAI servers in 2H26, creating significant demand on the latter going forward. The outlook of MitsuiKinzoku (the largest HVLP supplier; we refer to the company as "Mitsui" in this report) for HVLPsales growth CAGR of 15-20% in 2025-30 seems conservative to us compared with our forecastof 30-40% demand CAGR, potentially creating more spillover opportunities to other vendors for China is catching up on high-end copper foil, poised for further penetration into AI supply chainThe mid/highend copper foil market including RTF/HVLP