Doosan CCL factories running beyond full capacity as AI boom drives demand

A copper-clad laminate (CCL) product made by Doosan. [Doosan]

Doosan's major copper-clad laminate (CCL) factories are running beyond full capacity, driven by a boom in the AI accelerator and semiconductor markets. With CCL selling at a record pace, the company's earnings are expected to soar.

According to Doosan's semiannual report released Tuesday, the Electronics Business Group's factories in Jeungpyeong, North Chungcheong Province, and Gimcheon, North Gyeongsang Province, averaged utilization rates of 109.8 percent and 102.7 percent, respectively, in the second quarter — continuing the full-capacity operation seen last year, when Jeungpyeong ran at 107.8 percent and Gimcheon at 105.3 percent. Both factories focus on producing high-value CCL used in AI accelerators and semiconductors.

As recently as 2023, the two factories operated at just 56.2 percent and 62.2 percent utilization, respectively. Jeungpyeong crossed the 100 percent threshold in 2024, and by last year both plants were running at full capacity.

Utilization rates are also rising at Doosan's other CCL production sites. The China factory averaged 92.2 percent utilization in the second quarter, up more than 3 percentage points from 89 percent last year. That facility produces a broad range of CCL products, including high-value grades. The factories in Iksan and Gimje, North Jeolla Province, recorded a solid 76.3 percent utilization rate. Those plants mass-produce flexible copper-clad laminate (FCCL), a type of CCL primarily used in smartphones that can be folded and unfolded more than 200,000 times without deformation.

The rising utilization rates reflect a booming downstream market. Surging demand for AI accelerators and semiconductors used in data centers — fueled by the growth of the AI industry — has driven up demand for high-value CCL, which minimizes signal loss during data transmission.

The high-value CCL produced by Doosan's Electronics Business Group has earned recognition for its performance, securing supply contracts with Nvidia, the global AI leader. Nvidia had previously sourced most of its CCL from Taiwanese manufacturer EMC but began using Doosan's CCL in 2023.

The Jeungpyeong and Gimcheon factories are expected to maintain full-capacity operations for now, as CCL demand shows no sign of cooling amid big tech companies' continued expansion of AI accelerator and semiconductor output. Market research firm Fortune Business Insights projects the global CCL market will grow from $21.62 billion this year at an average annual rate of 5.4 percent, reaching $32.95 billion by 2034.

Doosan Group Chairman Park Jung-won (center) tours the Electronics Business Group facility in Jeungpyeong, North Chungcheong Province, on Aug. 12, examining the CCL product lineup. [Doosan]

"The CCL bottleneck on the total AI demand side will intensify further," said Kim Su-hyeon, an analyst at DS Investment Securities. "For a considerable period from now, capacity — not demand — will be the binding constraint on growth."

In response, Doosan is investing 180 billion won ($127 million) to build a new CCL factory in Thailand, which will focus on producing high-performance CCL for AI infrastructure and network equipment. Mass production is targeted for the second half of 2028.

Doosan's Electronics Business Group is expected to post record earnings on the strength of its CCL business. The unit's sales reached 1.29 trillion won in the first half of this year, up 47.1 percent from 879.2 billion won in the same period last year. If the momentum continues, the group is on track to surpass last year's record of 1.88 trillion won within a single year and approach nearly 3 trillion won in annual sales.

"Doosan's Electronics Business Group will see expanding profitability, driven by strong downstream demand for data center server AI accelerators, high-performance memory chips and optical module products, along with new facility scale-ups set to unfold over three years starting this year," said Kim Jang-won, an analyst at BNK Investment Securities.

yeongdai@heraldcorp.com