Morgan Stanley: Global CCL market to reach $47B by 2030 on AI infrastructure demand

Kingboard Laminates Holdings Ltd. bucked the trend in Hong Kong trading on Wednesday, rising over 6% to HK$49, marking a notable signal in the AI infrastructure materials supply chain. The rally follows a deep-dive industry report from Morgan Stanley revealing a structural opportunity in copper-clad laminates (CCL) and copper foil—two foundational materials long absent from the AI investment narrative that are now emerging as indispensable "invisible scaffolding" for computing expansion.

According to trade desk sources, Morgan Stanley's latest report projects the global CCL total addressable market (TAM) will grow from US$19 billion in 2025 to US$47 billion by 2030, representing a 20% compound annual growth rate (CAGR)—significantly above the consensus estimate of US$35–40 billion. AI and data center applications are expected to contribute 90% of the incremental growth.

Concurrently, Morgan Stanley initiated coverage on Taiwan Union Technology (TUC), Taiwan Union Technology (Taiwan), Co-Tech Development, and Kingboard Laminates, all with Overweight ratings and target prices of NT$8,400, NT$2,700, NT$730, and HK$75, respectively.

Earlier, JPMorgan also initiated coverage on Kingboard Laminates with an Overweight rating and a target price of HK$65. Analyst Parsley Ong and team forecast an 8x increase in earnings per share between 2025 and 2028, driven by rising CCL prices, capacity expansion, and a 75% increase in loom equipment scale. The synchronized bullish stance from two major investment banks has sharply elevated market attention on this sector.

TAM Underestimated: CCL Market Is More Than a Commodity Cycle

Morgan Stanley's core thesis is that the current rally is not a broad commodity upcycle but a selective materials cycle driven by specification upgrades.

The bank forecasts the CCL market will grow at a 20% CAGR from US$19 billion in 2025 to US$47 billion in 2030, versus consensus of US$35–40 billion. The key difference lies in Morgan Stanley's quantification of not only the volume growth of AI servers and data centers but also the sustained increase in material intensity for next-generation computing and networking platforms.

The report notes that content value growth—not volume growth—is the primary engine for AI-related CCL demand, expected to contribute 84% of AI-related CCL growth through 2030. As AI motherboards migrate to higher layer counts and lower-loss materials, the CCL value per system continues to rise. Using Nvidia platforms as an example, Morgan Stanley estimates CCL content per rack jumps from US$6,695 for GB300 to US$18,750 for VR200, and further to US$35,601 for VR300—generational increases of 90% to 180%. Similar cross-generational value leaps are observed across AMD, TPU, and Trainium platforms.

Morgan Stanley extends this framework downstream, projecting global PCB TAM will grow from US$58 billion in 2025 to US$135 billion by 2030, an 18% CAGR.

Supply Bottlenecks: Certification Barriers and Yield Constraints to Persist Through 2028

Morgan Stanley emphasizes that true scarcity lies in certified, high-yield capacity—not nameplate capacity.

In the high-end CCL segment, only a handful of global suppliers hold M8+ certification, including Taiwan Union Technology, Panasonic, Taiwan Union Technology (Taiwan), Doosan, and Shengyi Technology. Upgrading from M7 to M8-grade CCL is not a simple incremental improvement; it requires simultaneous advancements in low-loss resin formulation, smoother HVLP copper foil, higher-specification low-Dk glass fabric, and tighter manufacturing tolerances. These requirements significantly narrow process windows, reduce yields, and raise certification costs. The report shows that M8-grade CCL average selling prices exceed M7 by more than 2x, while M9+ grade commands 12.1x the base price.

Supply constraints are even more pronounced on the copper foil side. Morgan Stanley estimates the HVLP4 copper foil market will grow from less than US$50 million in 2025 to US$2.8 billion by 2030, a 123% CAGR. Effective capacity is currently concentrated among just five suppliers—Mitsui Kinzoku, Co-Tech, Furukawa, Fukuda, and Copper Foil Luxembourg—totaling approximately 1,000 tons per month, with Mitsui Kinzoku alone accounting for 41% of 2026 capacity.

The supply-demand gap is expected to widen significantly in 2027. Morgan Stanley estimates HVLP4 demand will rise from 12,300 tons in 2026 to 39,200 tons in 2027 (+218% YoY), and further to 52,000 tons in 2028, resulting in a 31% supply deficit in 2027 and a 20% deficit in 2028. Converting HVLP2 lines to HVLP4 reduces effective output by over 40%, and new lines face bottlenecks in surface treatment equipment delivery, which is concentrated among a few Japanese suppliers.

Cycle Positioning: Earnings Realization Still Incomplete

Morgan Stanley positions high-end CCL and HVLP copper foil as "out of the trough but not yet at full earnings realization or cycle peak," expecting product mix, pricing, and margins to continue improving through 2027–2028.

The bank also warns that this is a stock-picking cycle, not a sector-wide rally—even as qualified high-end materials tighten, commodity-grade CCL may remain oversupplied.

In the high-end CCL space, Morgan Stanley is most bullish on Taiwan Union Technology, forecasting revenue CAGR of 76% from 2025 to 2028, with net profit growing even faster at 117%. Its NT$8,400 target price implies 20x 2028 P/E. Taiwan Union Technology (Taiwan) holds a differentiated position in high-end network switches, with an expected EPS CAGR of 138% from 2025 to 2028 and a target price of NT$2,700. Co-Tech Development, as a key second source for HVLP4 copper foil, is expected to see its global capacity share rise from 13% in 2026 to 21% in 2028, with a target price of NT$730.

Kingboard Laminates' investment case leans more toward cyclical recovery. The company benefits from a vertically integrated structure covering copper foil, glass yarn, glass fabric, and epoxy resin, giving it a clear cost advantage. Morgan Stanley expects its net profit in the second half of 2026 to grow 97% year-on-year, driven by rising E-glass fabric prices—which have increased approximately 4x over the past year. The HK$75 target price corresponds to 14x 2028 P/E, offering significant re-rating potential from the current 8.5x valuation.

The above content is sourced from the trade desk.

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