The development of PCB industry is hindered
Electronic OEM and PCB might be the next target of the US ban
Recently, the United States issued a ban on chips, shaking the global semiconductor industry, Pegatron Chairman recently said that the two major economies collision, more careful face, more warned that “there will be another conflicts”, Li Chun, deputy chief executive of the Chinese Academy of Economics, WTO and RTA center reminded yesterday that the United States technology ban will only one after another, The U.S. government’s ICT Critical Supply Chain report, released in February, singled out electronics contractors and printed circuit board (PCB) as being at risk as the next targets.
U.S. President Joe Biden signed the “Critical Supply Chain Review” Executive Order in February 2021 to conduct industrial reviews on semiconductors, advanced batteries, critical minerals and materials, pharmaceuticals and feedstocks. Last June’s report singled out the semiconductor industry and advanced batteries as having a disproportionate share in the Chinese mainland.
Li pointed out that in February this year, the US issued A “Critical Supply Chain Review to support the US Information and Communications Industry”, naming upstream PCB, optical fiber, electronic contract manufacturing, as well as downstream routers, servers, switches and LCD monitors as being at risk.
According to the report, Taiwan companies account for half of the top 10 global PCB manufacturers , and most of the PCB are produced in China. Although China is not competitive in cutting-edge technology, it is highly dependent on the United States for its exclusive production of low-end, consumer goods.
In addition, Taiwan is home to 11 of the world’s 20 largest OEM manufacturers, including Hon Hai and Pegatron. Their output value is equivalent to 80% of the global output.
Li Chun summed up the analysis, according to the past example, the US government may have two ways to solve the problem. The first is export control, that is, whenever the relevant products involve American materials and software, restrictions will be put forward to reduce the United States’ dependence on China. Second, it is possible to follow the Huawei ban to restrict Chinese ICT products from the U.S. government procurement, especially as the U.S. is pushing for 5G infrastructure construction, so restricting Chinese fiber optics would be quite effective.
According to Li Chun, the report mentions many Taiwanese companies in China, but the US government cannot have binding force on Taiwanese companies. However, if the US customers of Taiwanese companies, such as Apple and Google, are asked to disperse their production bases, the manufacturers in Taiwan Province will be further affected.
PCB enterprises continue to destock
According to Taiwan media “Industrial and Commercial Times” reported that the market continues to face the pressure of destocking, leading to the second half of the traditional electronic peak season is not prosperous, although there are still some PCB factory positive view of the second half of the operation will still maintain the growth trend, but look at the conservative board factory is not a minority.
According to the statistics of TPCA, the revenue of PCB raw materials of Taiwan listed cabinets in September decreased by 3.6% monthly and 28.01% annually, and the cumulative revenue of the previous September decreased by 5.01% annually.
For the second half of the year, demand for Apple’s new products will remain solid compared to other applications, most of which are still destocking, PCB manufacturers said. Even Netcom/Server and automotive, which have been good, are under pressure, and keeping inventories down in the second half is the primary goal for most manufacturers.
Also have other industry pointed out that since the war, inflation, higher interest rates, consumer strength shrinking, even into the third quarter the traditional peak season, the client is straightforward to say to want to pin inventory, and to look in the fourth quarter outlook is pale, the subsequent even Europe and the United States holiday sales season, is also expected demand is not high, expected inventory high-end electronic industry, still need to be more than 6 months.
TPCA previously said that with the government policy promotion and industrial efforts, China Taiwan PCB material factory actively towards the high-level application layout, the subsequent fermentation is still worth looking forward to. In recent years, Taiwan-funded CCL factory Lianmao, Taiwan photoelectric, South Asia plastic, Tenghui, etc., actively invested in the development of IC substrate materials.
In addition, supply chain transfer is also a trend that the industry pays attention to. In addition to PCB factories with established production capacity in Southeast Asia, in recent years, Taihong, Taioptoelectronics, Lianmao and other material factories have been added, and many plate factories also have plans for Southeast Asia.
Although PCB enterprises face many obstacles in their development, the overall situation is stable and improving. From 2016 to 2021, the global PCB market size showed a fluctuating upward trend. The printed circuit board industry was affected by the COVID-19 pandemic, with the global market size declining by 1.3% in 2019.
The global printed circuit board market recovered from the pandemic after 2020, with the market size rising from about $65 billion in 2020 to more than $80 billion in 2021, an increase of about 23% year-on-year.
In the post-pandemic context, strong downstream consumer demand is driving double-digit growth rates for printed circuit boards worldwide. Therefore, the demand side of the global PCB industry market scale is more active, which lays a good foundation for the steady growth of output value in the future.
The top 100 PCB companies in the world are mainly located in Asia, such as China, Japan and South Korea. The total revenue of the listed companies in these regions fluctuates around 90% each year. To a certain extent, the focus of the global printed circuit board market has shifted to Asia.
In 2021, the market size of listed Chinese enterprises accounted for about 63%, up about 2.7 percentage points from the previous year, showing a growth trend. Among them, Chinese companies on the list accounted for nearly 30% of the market size, an increase of about 2 percentage points over the previous year.
Taiwan companies accounted for nearly 35% of the market, up 0.7% year on year; In addition, the market size of Japanese and South Korean companies on the list accounts for about 18% and 12% respectively.
Overall, the total revenue of China’s listed enterprises accounts for the largest proportion, and the proportion of the total size of China’s top 100 enterprises in the total size of the top 100 enterprises has increased, which to a certain extent indicates that the PCB competitive strength of Chinese enterprises has been enhanced, and China has become the global PCB industry center.