CCL: Fresh concerns about structural demand & content growth seem overdone

Recent concerns on CCL demand appear overblown: Concerns have surfaced following recent market speculation that CPO adoption over the next few years could structurally erode demand and content growth for high-end CCL. We remain bullish about the high-end CCL sector. A full shift to CPO theoretically works but should have limited near- to mid-term effect on CCL, as CPO adoption remains gradual given challenges in reliability, cost and ecosystem. We expect demand from GPU/ASIC compute trays, scale-up networking and PCIe Gen6/7 to continue to rise regardless of CPO, and that 224G over copper will continue driving usage of high-end CCL and upstream materials such as copper and glass fiber. CPO should increase the requirement for PCB/CCL, with adoption of PCIe Gen 6 already leading to migration to the M6-M7 grade, and new needs such as heat endurance (CTE) and barrel cracking resistance as layer counts rise. We do not expect the CCL industry to turn oversupplied even as we estimate 19% capa