CITIC SEC: The Price Increase Potential of 7628 Electronic Cloth from the Perspective of Specialty Fabric.

CITIC SEC released a research report stating that, similar to the storage super cycle, the current special electronic fabric supply and demand are continuously tight. Companies are driven by marginal profit to continue to shift production towards special fabric, leading to a continuous marginal compression of the weaving machine capacity for 7628 electronic fabric. From the perspective of investment return rate, the price increase potential of 7628 electronic fabric in this round is expected to reach 8 yuan/meter. Logic of price increase for 7628 electronic fabric continues to be validated According to Sublime China Information, as of February 9, 2026, the average price of 7628 electronic fabric was 5.11 yuan/meter, with a jump of 0.4 yuan/meter, continuously validating our logic of a price increase in the major cycle. By integrating weaving machines and production line construction, with the investment return rate of low dielectric second generation as the anchor, CITIC SEC believes that the price increase potential of 7628 electronic fabric could reach 8 yuan/meter. 1) From the perspective of weaving machines, CITIC SEC calculates that the investment return rates for low dielectric first generation/second generation and low expansion/Q fabric are 189%/578%/1500% respectively. When the price of 7628 electronic fabric is 4/6/8 yuan/meter, the investment return rates are 60%/180%/300% respectively; 2) From the perspective of production line construction, the investment return rates for low dielectric first generation/second generation and low expansion/Q fabric are 19%/75%/144% respectively. When the price of 7628 electronic fabric is 4/6/8 yuan/meter, the investment return rates are 11%/32%/54% respectively. Similar to the storage super cycle, the current electronic fabric cycle may be more intense The upward logic of this round of storage cycle (2025Q2 - to mid-November) is driven by supply optimization + AI demand. Storage manufacturers focus on high-profit products, compress the supply of mainstream storage, causing prices to rise rapidly and bringing greater price elasticity. According to Bloomberg, the highest increase in mainstream DRAM/NAND chips reached 223%, lasting for 12 to 18 months. Referring to storage, the current electronic fabric demand cycle is mainly driven by AI demand, with stronger growth and sustainability, and more demand for special electronic fabrics from AI. In the super cycle, CITIC SEC believes that 7628 electronic fabric may also reach a new price peak. Tight supply and demand for special electronic fabric, continuously seizing weaving machine capacity. Considering the continued rapid growth of AI demand, we predict that the demand for special fabric in 2026 is expected to increase by 100%. Due to the bottleneck of Toyota's weaving machine capacity, we believe that in 2026, special electronic fabric will still be in short supply, and companies are driven by marginal profit to continue to shift production towards special fabric. According to Taiwan Television Finance, on February 10, 2026, Tai Yao Technology stated that major glass fabric manufacturers in the Taiwan region of China have successively stopped the production of E-glass fabric and switched to Low-Dk glass fabric, validating the logic of tight supply and demand for special electronic fabric and the continuous seizure of weaving machine capacity.