Companies that supply SLP (Substrate Like PCB) for the main boards of Samsung Galaxy S10 such as Korea Circuit are expected to benefit. The market response to the Galaxy S10 series is good. In particular, once the 5G market is fully opened, SLP sales are expected to expand.
SLP is a part that adds a semiconductor package to high-density multilayer board (HDI) mainly used on the main board of a smartphone. It can increase the utilization of the parts space in the smartphone.
According to industry sources on the 21st, Samsung Electro-Mechanics, Korea Circuit, Daeduck Electronics, ISU Petasys, and Ibiden of Japan were among the companies that supply SLP for Samsung Galaxy S10. These companies can expect sales growth of SLP thanks to the strong sales of Galaxy S10. Park Kang-Ho, a researcher at Daeshin Securities, explained, “Galaxy S10 sales volume is expected to be between 42 million and 44 million units, which will be more than that of Galaxy S9 (39 million units).”
Both Samsung Electro-Mechanics and Korea Circuit supply 35% of SLP for Galaxy S10 each. The remaining volume will be supplied by Ibiden, Daeduck Electronics, and ISU Petasys. An industry official explained that these volume rates are not fixed and may vary slightly depending on the situation. The first and second vendors of SLP for the Galaxy S10 in Korea, China, and Europe are also different. The Galaxy S10 for North America is expected to maintain its existing HDI like the Galaxy S9. ISU Petasys did not supply SLP at the initial launch stage of the Galaxy S9 last year but began supplying SLP a few months later. It has also supplied a small amount of SLP to Galaxy S10.
SLP makers are looking forward to next year. If the 5G era starts in earnest next year, SLP supply will also increase. The SLP is small, but it can engrave a lot of circuits, so it can support 5G high-frequency range while increasing the battery capacity. An industry representative said, “Looking at the ongoing discussions, the proliferation of 5G infrastructure is a matter of time, We expect the 5G era to come in the second half of this year or in the first half of next year at the latest.” Lee Kyu-Ha, a researcher at NH Investment & Securities, also said, “It is expected that the adoption rate of SLP substrates will expand in earnest from 2020.”
Also, the SLP price is higher than that of HDI. Another industry official said, “It’s not as much as the market estimation of SLP being 20% more expensive than HDI, but it’s true that SLP prices are high.” If the 5G phone market spreads next year, these companies can expect sales growth. Currently, the SLP price per terminal is estimated to be around $10. A decrease in the number of competitors is also a positive sign. According to researcher Park Kang-Ho, “The number of Samsung’s main PCB suppliers is about 12 for HDI; however, it is reduced to five for SLP.”
Some, however, expect the profitability of SLP supply to be not very high. Another industry official said, “Apart from the increasing technical difficulty, there is a relatively high number of SLP suppliers, so competition for the unit price will be fierce. Even if the 5G era becomes a mainstay, we have to see whether the OP margin following the SLP volume increase will be good.”