The application of copper semis in connectors and prospect [SMM Copper Summit]

At the 2024 (19th) SMM Copper Industry Conference and Copper Industry Expo - Copper Billet Industry Development Forum, jointly organized by SMM and Shandong Humon Smelting Co., Ltd., Shenzhen Connector Industry Association research Center Director Zhou Mingliang shared the application and prospects of copper semis in connectors.

Connector market overview

In 2023, the global total connector supply was 81.8 billion. China was the largest manufacturer, accounting for about 30% and maintaining a relatively high CAGR.

Why use copper in connectors?

Good electrical conductivity, wear resistance and corrosion resistance, good mechanical properties, good processing performance, high thermal stability

Copper alloys used for electrical contact are about 1.4 million tons per year, of which connectors, connectors and lead frame industries (broadly defined) account for about 60%. China's total annual consumption is about 800,000 tons. The main copper alloys are brass, phosphor copper, red copper and a small amount of other special alloys.

Take RJ45 modules as an example: Depending on the type and model of connector, copper costs account for 15-80%, and the copper cost of micro connectors, which generate the most profits, is close to 50%.

The beneficiary industries of copper connectors under the Ai wave

1. Data center: servers, cooling systems, communications, data exchange systems, etc.;

2. Consumer: Ai PC, Ai audio-visual, and Ai games replace traditional equipment, and consumption upgrades;

3. Commercial: Smart office, promoting OA equipment upgrade;

4. Robots: Automobile intelligent driving system + AI technology will surely promote the implementation and popularization of AI robots. According to experts from the China Automotive Engineering Academy, humanoid robots are very likely to become another 10 trillion-level market after the automotive industry.

Copper market has huge space under the AI wave

Hot spot: NVIDIA GB200 NVL72 Architecture:

►NVIDIA's new chip GB200 uses copper interconnect technology to improve AI performance and reduce energy consumption. It is expected that the copper cable market space will grow significantly in 2025.

►Copper cables are low-cost and fast for short-distance transmission within data centers, and the copper interconnection solution for a single server has high value.

►In the next two years, the shipment volume of GB200 NVL72 is expected to reach 3,000 and 50,000 units respectively, and the market space for copper interconnect solutions is increasing year by year.

►As network equipment is upgraded to 800G, silver-plated copper wire may become mainstream due to its excellent performance, making up for the shortcomings of traditional materials in high-frequency transmission.

►The market potential for copper alloy materials is huge, and the global demand for copper alloys is expected to be about 60,000 tons in 2025.

►New materials and coatings (such as graphene) that can improve high-frequency data transmission capabilities will have huge market potential.

►Major global customers: AWS, Dell, Google, Meta, Microsft, OpenAl, Tesla

It also introduces the special copper alloys that are currently mature domestic alternatives, the key points of copper alloy application in specific products (taking automotive connectors as an example), etc.

Suggestions for copper processing companies

1. Rapid development in the automotive sector: The vigorous development of new energy vehicles has led to a strong demand for high-performance copper alloys, especially in high-voltage connectors and high-speed connectors. High-voltage connectors are used to meet high-current transmission and battery management systems, while high-speed connectors serve the increasingly complex in-vehicle electronic systems and data transmission needs. For example, copper alloys such as copper-nickel-silicon, chromium-zirconium-copper, and tellurium-copper are widely used due to their excellent electrical conductivity, thermal conductivity, high strength, and high temperature resistance, becoming key materials for domestic substitution of automotive connectors.

2. The process of domestic substitution is accelerating: Due to the decisive role of copper alloys in connector performance and the current situation of my country's serious dependence on imports of high-end copper alloys, the urgency of domestic substitution has been promoted. Domestic copper alloy manufacturers are gradually achieving domestic substitution in the high-end market, reducing costs and improving competitiveness through technological research and development and process improvement.

3. Technology upgrade and new material research and development: The future trend will be to continuously optimize material composition and processing technology to meet higher performance requirements, such as high temperature resistance, high conductivity, high toughness, oxidation resistance, low resistance, easy processing and other characteristics. At the same time, it will also strengthen the research and development and application of new materials such as copper-nickel-silicon, chromium-zirconium-copper, tellurium-copper, iron-copper, etc.

4. Diversification and customization of market demand: With the diversification of copper alloy performance requirements in industries such as automobiles, consumer electronics, communications, aerospace, and semiconductors, copper alloy products will pay more attention to customization and specialization. At the same time, considering environmental protection requirements and sustainable development, new harmless, low-carbon and green copper alloy materials will receive more attention and development opportunities.

5. Collaborative innovation in the industrial chain: In order to break through international technological barriers, domestic enterprises will work closely with scientific research institutions and universities to jointly tackle the difficulties in the development and industrialization of high-end copper alloy materials, promote the coordinated development of upstream and downstream of the industrial chain, narrow the gap with the international advanced level at a faster pace, and achieve transcendence in some areas.

6. Digitalization and intelligent manufacturing: With the deepening of digital transformation, the copper alloy manufacturing industry will introduce more advanced automated and digital production lines to improve production efficiency and product quality, and achieve refined management and lean production to meet the ever-increasing market and technical requirements.

The future development trend of copper alloys will be centered around high-end, localized, customized, environmentally friendly, and intelligent, in order to adapt to and lead the innovative development of modern manufacturing.