Panasonic will boost production of materials used to make equipment compatible with 5G wireless technology in China, where demand is expected to grow sharply.
The Japanese company will spend about 8 billion yen ($75 million) to expand its plant in Guangzhou starting this month, with the new lines slated to go online in autumn of next year. This is seen lifting production capacity by about 50%.
China accounted for about 40% of global investment in base stations in 2019, according to the Fuji Chimera Research Institute. Although tensions between the U.S. and China have led to Washington tightening restrictions on shipments of semiconductors and other technology products to Huawei, Panasonic does not anticipate an impact on its printed circuit board materials business for now.
Production will be increased for boards and adhesive sheets in which copper foil is deposited on special resins. Used to make printed circuit boards, these materials do not weaken signals in 5G bandwidths as much as conventional ones. They are also said to be easy to process and well-suited for making multilayer printed circuit boards.
Panasonic expects the materials will be used in fifth-generation base station antennas as well as servers and routers. Chinese telecommunications equipment makers Huawei Technologies and ZTE are seen buying products that use these substances through circuit board manufacturers.
Panasonic also makes the same materials in Japan and Taiwan, but it will first raise production capacity in the market it sees as promising.
However, the institute noted the possibility of weaker demand for printed circuit boards. "Difficulties faced [by Huawei and others] in procuring chips could limit the construction of base stations," it said.