As the cornerstone of the development of the electronic information industry, the PCB industry has attracted much attention in public. In this article, we would like to analyze why it said that the market share and development prospect of PCB is promising.
PCB upstream raw materials
From the perspective of the supply
PCB upstream raw materials have been facing price reduction pressure since the beginning of 2022. The annual change range of LME copper price is 15%, the price of 35um copper foil in China has dropped by 23% and the processing fee has dropped by 50%.
The third quarter is known as the traditional peak season of the electronic industry. However, the industry chain becomes more pessimistic about future demand expectations when the revenue in this quarter did not rose but decreased. Then the pessimistic expectation greatly impacts the effective production capacity.
From the perspective of the demand
Although the first three quarters did not have a good performance, various terminals manufacturers start to stock up from October. According to the research report of China Financial Securities, the utilization rate of all the industrial chains of PCB upstream, midstream, and downstream companies has improved. The monthly utilization rate of major manufacturers has generally returned to 80% to 90% in November. In addition, some large companies are basically close to maximum production capacity.
Under the circumstances that the supply has been compressed and the demand has been improved month-on-month, there has been a short-term mismatch between supply and demand. The upstream raw materials have started to rise in price one after another. Copper foil prices have rebounded twice from the lowest point of the year at the end of October to the end of November. The total rebound rate reached 11.85%. In addition, from the monthly revenue data of copper foil and glass fiber made by manufacturers from Taiwan, China, it can be seen that the year-on-year decline in revenue has also slowed.
Demand fluctuation of PCB applications
In 2022, the demand for terminal products like smartphones, laptops, and TVs are found that supply exceeds demand. While the fields of communications and industrial control remain stable. Though the demand for new energy vehicles is relatively strong, it is usually constrained by components and China’s domestic epidemic situation.
Based on the above reasons, from the end of the second quarter, the global PCB demand has changed its growth trend and lowered output speed. According to Prismark data, in the first half of this year, the global PCB market is about 42 billion US dollars, a year-on-year increase of 14.13%. Demand in the second half of the year is expected to be 40.1 billion US dollars, a year-on-year decrease of 9.07%.
Specifically, due to the differentiation of downstream demand, the differences in demand for different PCB products are also more obvious:
(1)The demand for IC substrates is strong especially the FCBGA products, while the demand for BT substrates is reduced due to their storage.
(2)Multi-layer PCBs are negatively affected by the poor demand for computers and consumer electronics, so their annual demand declines year-on-year;
(3)In terms of HDI PCB, although the low demand from China domestic smartphones brings a serious negative drag, the shipments of Apple-based terminals such as iPhone, iPad, and Macbook are relatively stable. Furthermore, the overall demand for HDI PCB is rising steadily benefited form from the emergence of new downstream applications such as new energy vehicles and mini LED.
PCB development prospect
Since October in 2022, with the overall improvement in the orders of the Android complete machine assembly line, multiple innovation directions have bred new PCB growth machines.
According to research data released by several securities companies, the PCB industry chain continues to expand, and its position in multiple application markets such as substrates, servers, and automobiles is also expected to increase.
With the continuous acceleration of innovation and upgrading of consumer electronics products in the future, relevant manufacturers in the PCB industry chain will also simultaneously gain more development and expand space.
As far as communication used circuit boards and automotive used circuit boards are concerned, the capital expenditure of cloud PCB manufacturers is still increasing steadily. Besides, the demand and market size of global data centers and related equipment continue to rise as well. At the same time, the port rate and the server rate has been significantly improved, which promote the increase of PCB function requirements and PCB value.
Automotive used PCB are also one of the most promising areas in the industry. The intelligent trend of the automotive vehicle drives the development of intelligent driving and smart cockpit. Besides, the automatic driving is witnessed an increase need on upgrading its sensors like cameras and millimeter-wave radar. Smart cockpit shows a development trend towards multi-screen development, which brings more opportunities for PCB industry.
In November 2022, it’s said that the monthly rise and fall of the PCB sector in the electronics industry segment was +5.4%, outperforming the average that of the electronics industry of 3.8%, and ranks second.
From the monthly rise and fall of major manufacturers from PCB industry chain, it can be found that whether it is upstream PCB raw materials like copper foil, glass fiber cloth and resin, midstream copper clad laminates, or midstream and downstream PCBs, the entire industry chain is experiencing changes. After the sluggish performance throughout the year, the stock price rebounded well in November.
Conclusion
Overall, the prosperity of the PCB industry is still under pressure. Under the circumstances of continuous price reduction of upstream raw materials, the profit recovery of PCB is still slow due to the constraint of utilization rate.
However, as domestic electronic products are gradually upgraded to high-end and iterations are accelerated, the PCB industry has a bright future. For example, automotive vehicle components like controllers promote the market of HDI PCB. More multi-layer PCBs are required for Server’s new platform upgrade.
With more than 17 years of experience in PCBA manufacturing, IBE is a professional PCBA manufacturer focusing on the R&D of new energy, medical devices, automotive electronics, consumer electronics, etc. We aim to be your highly reliant strategic ODM/OEM global partner for success by providing high-technology services, products, and solutions. Any information can be found on our website.
