Economic Observer reporter Wang Yajie

The new equipment has not been debugged yet, and the production capacity has already been 'snatched up'.

The established output for 2026 was completely 'locked' by top customers in the fourth quarter of last year, "said the market manager of a leading copper foil manufacturer in China. The "established output" he referred to refers to the company's product HVLP4 copper foil, an ultra-low profile electronic copper foil designed specifically for AI (artificial intelligence) servers and high-speed optical modules. This is one of the most in demand raw materials in the current computing power industry chain.

At present, in high-frequency and high-speed transmission scenarios, AI servers need to use HVLP ultra-low profile copper foil. If ordinary standard copper foil is used, signal loss will be too high, and there is currently no low-cost alternative material solution with commercial cost-effectiveness.

When computing infrastructure is rapidly advancing, these key substrates that have long been hidden upstream in the industrial chain are becoming hidden weaknesses that restrict the supply of computing power.

Will computing power really be "stuck" by copper foil?

Lion, the head of AI server procurement at a leading domestic cloud computing manufacturer located in Jiangsu, told Economic Observer that "starting from the second half of 2025, our frequency of urging PCB (printed circuit board) suppliers for goods will increase from once every quarter to once every month. The other party feedback that the core bottleneck is not chips or ordinary boards, but a raw material called HVLP4 generation computing power copper foil. The delivery pace of our computing power cluster is now aligned with the delivery cycle of copper foil. ”

Panic Buying

The market leader of the copper foil manufacturer mentioned above revealed to the Economic Observer that the company's HVLP4 generation computing power copper foil, which is specifically designed for AI servers and high-speed optical modules, has already placed orders in the second half of 2027.

The person gave an example that the monthly payment supply model commonly used in the industry has basically become ineffective. In the past, copper foil companies settled with customers on a monthly basis and provided rolling supply. Now, downstream copper-clad laminate and top PCB manufacturers are actively offering to prepay deposits and sign long-term supply agreements for 2 to 3 years in order to seize scarce production capacity.

This company currently holds a market share of approximately 15% to 20% in the domestic high-end computing copper foil market. This year, three companies visited the company's relevant base to negotiate long-term production lock contracts for the newly released thousand ton level production capacity before the equipment was fully debugged.

Ren Yi, the purchasing manager of a small and medium-sized server PCB factory in Guangdong, told reporters: "Starting from March 2026, several small and medium-sized PCB manufacturers in the industry have experienced phased shutdowns, such as our AI server production line being shut down for several days due to copper foil supply interruption. We can only borrow small batches of loose orders from various sources, but since the batches are different, the compression process parameters have to be adjusted accordingly, and the yield rate has also decreased. The final feedback to the terminal server client is that the delivery of that batch of AI cabinets will be delayed. ”

At the same time, the supply adjustments from overseas suppliers have made the situation even more tense. The group of Japanese companies belonging to top overseas material manufacturers has long held a market share of over 50% in the global high-end HVLP copper foil (a general term for the category of high-frequency ultra-low profile copper foil, including HVLP3, HVLP4, and HVLP5). Affected by the concentrated outbreak of global computing power demand and the limited pace of existing capacity expansion, the delivery cycle of regular orders for Chinese customers by related enterprises has been extended to 6 to 8 months.

The scene on the other track is completely different. The overall capacity utilization rate of the conventional standard lithium battery copper foil industry for consumption and power batteries is insufficient, and the industry's overcapacity exceeds 30%.

The computing power is constrained by high-end copper foil, not industry speculation, "said the market manager of the copper foil manufacturer." This is a real mismatch between supply and demand, and the gap is visible to the naked eye

Liu Weizhen, the high-frequency business manager of a copper-clad laminate company, also confirmed to the Economic Observer that "we are purchasing from both domestic and Japanese copper foil factories, and the delivery cycles on both sides are being extended. In the first quarter of this year, our high-frequency production line was shut down three times due to delayed copper foil arrivals. There is already a consensus in this bottleneck industry

Ren Yi said, "HVLP copper foil is one of the most rigid supply constraints and slowest expansion links in the current AI computing hardware industry chain. I estimate that the supply-demand mismatch will continue. ”

Jam

Since high-end copper foil is so scarce and prices are rising, why don't companies accelerate production expansion?

The answer is hidden on the production line.

Chen Zhiyuan, the chief engineer of a domestic equipment manufacturer who has been deeply involved in the research and development of copper foil precision equipment for several years, bluntly stated that a common misconception in the industry is that copper foil production lines can be flexibly switched. However, in fact, there are natural barriers between the production line of HVLP copper foil required for AI servers and the production line of lithium battery copper foil in terms of core production equipment, electroplating electrolyte formula, and downstream access certification. The two production lines have independent production systems, and large-scale low-cost interoperability transformation is not commercially feasible, and can only produce small-scale low-end transition product trials.

Chen Zhiyuan further dismantled the relevant barriers.

The first layer is the core equipment. At present, the mainstream industry uses high-precision surface treatment machines from Japan's Three Ship Machinery (similar Japanese equipment manufacturers also have corresponding models, with relatively low market share). This equipment is the core equipment for controlling the surface roughness of copper foil.

And the lithium copper foil production line will not be equipped with this set of equipment. The simple processing machine matched with the ordinary lithium battery production line has a precision difference of one order of magnitude. Even if forced installation and renovation are carried out, the equipment cavity, electrical control system, and temperature control system are all incompatible, and the total cost of the renovation is close to that of a brand new purchase, and the stability does not meet the certification standards for computing power boards.

Chen Zhiyuan stated that the high-precision surface treatment equipment suitable for the production of 4th generation and above HVLP copper foil has a global annual production capacity of only 10 to 12 units and a delivery cycle of 18 to 24 months. This means that even if companies have sufficient funds, they cannot obtain spot goods in the short term.

The second layer is the electrolyte and additive formula. The pursuit of ultra-thin copper foil for lithium-ion batteries is tensile strength and elongation; The core indicators of computing power HVLP copper foil are low profile, high temperature resistance, and low signal loss. The electrolyte formulas of the two are different. Even for production lines that have reserved space for renovation, switching from lithium copper foil to HVLP requires emptying the entire electrolytic cell, multiple deep cleaning, and replacing the entire set of chemicals. If a single switch is stopped for 7 to 10 days, the yield rate will plummet to within 60% in the first half of the month.

The third layer is downstream authentication. Lithium battery copper foil only requires simple verification by the battery factory; HVLP copper foil needs to complete the four level full chain certification of "copper foil factory, copper-clad laminate factory, PCB factory, cloud manufacturer/server complete machine factory", with a complete cycle of 12 to 18 months. The full chain certification process is standardized, and there is no urgent green channel that significantly shortens the cycle.

Triple barriers are stacked, and a new HVLP production line will be built, with the shortest equipment delivery cycle among the wooden boards.

The market leader of the top domestic copper foil manufacturer mentioned above revealed that in May, when the copper foil company placed an order for surface treatment equipment with relevant Japanese companies, the feedback received was that "delivery can only be completed in the first half of 2028".

The existing lithium battery production line can only temporarily produce low-end products and cannot produce the 4th and 5th generation high-end products that are urgently needed for computing power, "said the person in charge." To ensure stable supply to AI servers, we can only plan a new dedicated production line. ”

The invisible ceiling of computing power construction

Liu Weizhen introduced that his company's high-frequency copper-clad laminate products are the core substrate of AI server PCBs and are in the procurement chain. His real sense is that the delivery cycle has been significantly extended. Previously, the regular HVLP order lead time for Mitsui (a high-end HVLP copper foil material manufacturer) in Japan was 2 to 3 months, but now domestic customers generally take 6 to 8 months to place orders.

In the second quarter of 2026, when the copper-clad laminate company renewed its supply agreement with the copper foil company, the other party also explicitly required a certain percentage of deposit to be prepaid in order to lock in the allocation quota for future new production capacity.

Liu Weizhen also sensed price differentiation. The copper-clad laminate company he works for has raised its prices for high-end high-frequency boards more than once, mainly due to upstream raw material cost pressures and supply constraints.

This shortage has already affected production scheduling. The high-frequency board production line of this copper-clad laminate enterprise is dedicated to a dedicated line and can only produce AI server supporting products, and cannot be temporarily switched to ordinary boards. Once the agreed HVLP copper foil is delayed in delivery, the entire production line can only be temporarily suspended due to material shortage.

Transmission goes beyond that. The downstream customers of this copper-clad laminate enterprise include some domestic PCB manufacturers. The delay in delivery of copper-clad laminates directly led to the postponement of PCB etching and pressing processes, forcing adjustments to the cabinet assembly plan of the entire machine factory.

Several PCB customers have provided feedback to Liu Weizhen that the construction period of the terminal computing power cluster project is being pushed back.

This kind of 'card' is not a short-term market problem caused by a shortage of a single source of goods, "Liu Weizhen said." This is a medium - to long-term contradiction caused by the highly concentrated supply of high-end specialized equipment and the long certification cycle of the entire chain

Standing at the top of the industry chain, equipment manufacturers can see more clearly. A technical director of a local aerospace state-owned enterprise told the Economic Observer that, based on the current progress of precision equipment research and development in China, it will take at least 3 to 5 years of continuous technical research and production line verification to achieve the mature commercialization and localization of a complete set of high-end HVLP production equipment.

How to break the deadlock?

Faced with this reality, all parties in the industry chain are trying different response paths.

The technical director believes that although leading domestic copper foil companies have begun to sign long-term supply frameworks with Japanese core equipment suppliers to lock in equipment delivery shares in advance, this can only alleviate and cannot cure the supply shortage due to the equipment manufacturers' own production capacity. Some companies have attempted to renovate their lithium battery production lines, but the cost of renovation is high, the yield rate is low, and the certification cycle is long, which can only serve as a transitional supplement and cannot meet the demand for high-end products. A few domestic equipment manufacturers have started to tackle high-precision surface treatment equipment.

Based on this, the technical leader suggests that in the short term, domestic copper foil enterprises should be encouraged to establish more stable long-term cooperation with Japanese equipment manufacturers, while supporting the research and development of domestic equipment. In the medium term, it is necessary to establish a joint demand forecasting and capacity planning mechanism for copper foil, copper-clad laminates, PCBs, and whole machine factories to avoid severe fluctuations in supply and demand caused by information asymmetry. In the long run, the autonomy of the computing power industry chain cannot only focus on GPUs (graphics processing units) and server machines.

The current domestic support policies for computing related industries are more focused on terminal hardware such as GPUs and server machines, and there is still room for improvement in the supporting planning for key substrates such as high-end electronic copper foils in the upstream.

(At the request of the interviewee, Lion is a pseudonym in the article)