Before 2000, more than 70% of global PCB production was distributed in the Americas (mainly North America), Europe, and Japan. Since entering the 21st century, the focus of the PCB industry has continued to shift to Asia.
At present, the PCB output value in Asia is close to 90% of the world, especially in China and Southeast Asia. Since 2006, China has surpassed Japan to become the world’s largest PCB producer, with PCB production and output ranking first in the world.
In recent years, the global economy is undergoing a period of in-depth adjustment. The leading role of major economies such as Europe, the United States, and Japan in the world's economic growth has significantly weakened. The growth of the PCB market has been limited or even shrinking; while the degree of integration between China and the global economy has gradually increased, gradually Occupy half of the global PCB market.
As the largest producer in the global PCB industry, China's share of global PCB industry output has increased from 31.18% in 2008 to 50.53% in 2017.
Global PCB market
In 2016, the global PCB industry presented three major characteristics: weak demand, new technology, and raw material price increases.
According to Prismark data, the market size of the PCB in 2016 was US$54.207 billion, which was 2% lower than the same period of last year. The number of PCBs except China declined.
The first is the declining demand growth of the PC, tablet PCs, and high-end smart phones. According to Gartner's latest data, the Q3 global PC industry continued to decline, with total shipments of 67 million units falling 3.6% year-on-year.
Secondly, the Apple iphone7's A10 processor was the first to adopt a Fo-WLP package without a package substrate, which greatly impacted the development of the package substrate market. Companies such as Ibiden of Japan and South Korea’s Samsung Motors’ large IC package substrate also faced seeking new PCBs. The problem of market stabilization and development of enterprises (prismark); sudden rise in raw materials prices, the highest increase in copper prices in 2016 reached 37.7%.
Japan's high-tech high barriers
According to data from the Japan Electronics and Information Technology Industry Association, as of July 2017, the total output value of the Japanese electronics industry fell from 2.67 trillion yen (approximately 157.5 billion yuan) in March 2000 to 936.7 billion yen (approximately 553 percent). Billion RMB, about 1/3 of the original.
We believe that there are several main reasons:
The first is external factors:
1) In the wake of the global financial crisis in 2008, the electronics industry in Japan has ceased to be a major player; the overseas market demand has shrunk sharply, and the appreciation of the yen has even worsened;
2) The rapid rise of international competitors has squeezed the growth space of the Japanese electronics industry.
Followed by internal factors:
Japanese companies focus on achieving the ultimate in subdivided areas. In the aspect of providing integrated solutions, the ability to respond to customer needs and changes in the market is weak, and the industrial chain lacks flexibility.
With the declining manufacturing scale in Japan's electronics industry, PCB as its basic component has also shown a downward trend. Although Japan still occupies a technological advantage in high-end HDI, FPC and carrier boards, its overall share gradually shrinks.
As of January 2018, the output of printed circuit boards (PCBs; hardboard + soft board + module substrates) in Japan decreased by 3.7% compared to the same month last year to 1,147,000 square meters, and it shrank for the sixth consecutive month.
The corresponding Rigid PCB output decreased by 0.8% from the same month of last year to 811,000 square meters, showing a 2nd decline in 3 months; the output of flexible PCB decreased by 13.6% to 273,000 square meters. , For the eighth consecutive month, the output contracted 3.1% to 4.627 billion yen for the first time in three months, and module substrate production increased by 9.0% to 62,000 square meters. In the 15 months, the output rose and the output grew by 8.7% to 8.722 billion yen.
Although Japanese companies have an absolute leading edge in terms of technology, Japanese PCB manufacturers' operating margins have been low in the past few years.
In addition to automotive boards, Japanese companies gradually withdrew from rigid PCBs, and traditional competitive products FPCs and IC carriers gradually declined.
According to Morgan data, five major Japanese FPC vendors (NOK, SEI, and Fujikura) accounted for more than 70% of their shares five years ago. The decline in profitability made NOK and SEI unable to invest in FPC business. Currently, Japanese companies’ share in Apple FPC is only About 50%.
RF PCB Helps South Korean PCB Enterprises Further Advance
In recent decades, South Korea's PCB industry has exhibited three major characteristics: the rapid development of scale, the vertical integration of the industry, and the gradual shift to high value-added PCB products.
Nearly 90 PCB manufacturing companies in South Korea and rigid PCB “Top 5” companies are:
Samsung Motors, Simmteh, Korea Circuits (owned by the Yongfeng Group), ISU-Petasys, and Dade Electronics (owned by the Dade Group); Korea's flexible PCB major companies mainly include: Yongfeng Electronics (belonging to the Yongfeng Group), Inter Flex The company (owned by the Yongfeng Group), BH Flex Corporation, SI Flex Corporation, New Flex Corporation, etc., among which Yongfeng Electronics, InterFlex and SI Flex are called by the industry (FPC Enterprise Top 3).
The birth and development of FPC and PCB gave birth to the soft and hard PCB RF PCB, that is to say, the flexible circuit board and the rigid circuit board were combined together according to the relevant process requirements to form a circuit board with FPC and PCB characteristics.
Previously, the Apple iphone's display and touch screens were multi-layered FPCs. The 10th anniversary iPhone X will use RFPCB because multi-layered FPCs can only accommodate a single chip. iPhone X needs two new chips, including mobile ProMotion support. Refresh rate technology's neural engine and other artificial intelligence (AI) features.
In addition, the chip that is placed on the FPC easily falls off, and the use of RF PCB can effectively avoid this defect.
The data looks at the Taiwan PCB and actively lays out the SLP
Taiwan as a veritable electronic treasure island, its electronic companies are mainly divided into two categories, the first is a semiconductor company, from equipment, materials to design, manufacturing and packaging and testing; the other is mainly computer and mobile phone OEM and related Supporting component companies.
Since 2005, some OEMs have rapidly emerged from their mobile phone OEMs. PCB is one of the three pillar industries in the electronics industry. With the localization of the domestic PCB supply chain and the rise of the red industry chain, Taiwanese manufacturers are similar to Japan. In order to maintain market competitiveness, PCB products with relatively high end and high added value have been retained. Gradually moved to high-level PCBs, FPCs, and the most recent international large customer-like carrier board.
Compared with the significant decline in the size and share of the Japanese and Korean markets, the global share of Taiwan’s PCBs remains approximately 13%.
Taiwan is the region with the best operating performance. There are generally certain fluctuations in Japanese and South Korean manufacturers. The operating profits of Taiwanese manufacturers are relatively stable. Although Chinese manufacturers have grown rapidly, the revenue volume is still low.
Apple leads the market toward the development of carrier-grade SLP, meeting high-precision requirements and SiP packaging technology: Apple's new iphone 8 and iphone X use "Substrate Like-PCB" (SLP) technology with a smaller line-width pitch. Leading the development of the HDI market towards class carriers, technology upgrades will bring new business opportunities to the industry.
Since 2010, Apple's smartphones and tablet PCs have adopted the Any Layer HDI process. In 2014, due to continuous improvement of functions, new dimensions, and L-shaped design all contributed to the vigorous development of the industry, this year, Apple's adoption of SLP will accelerate the industry's board industry. However, due to the need to reconstruct the type-loaded board production line, the initial yield and quality of the board will need to be improved. Leaders are expected to enjoy substantial profit margins.
The class carrier board is still a type of PCB hard board, but it is closer to the semiconductor specifications in the process. Currently, the line width of the class carrier board requires a 30/30 μm line width. This technology will reduce the area occupied by the mobile phone's main board and thus increase the battery's capacity. Space to solve the problem of mobile phone life.
At the same time, SLP is more in line with the requirements for system-level packaged SiP technology.
PCB domestic transfer trend is irreversible, and industry concentration gradually increases
According to the NT information data, in the top 100 global PCB manufacturing companies in 2016, there were 45 companies in China, accounting for 39.8%.
Jingwang Electronics, Xingsen Express, Chongda, Aoshikang and other domestic companies are on the list, with revenue growth of 13.5% on the list, far higher than the average decline of 2.1% for the top 100 global companies.
Taiwan and Japan were 25 and 19 respectively, and the domestic transfer of production capacity was irreversible.
According to Prismark's research, the output value of PCBs in mainland China in 2016 was USD 27.104 billion, which was the only region in the world where growth was achieved. The global share increased from 8% in 2000 to 50% year-on-year, with the gradual shift of production capacity to the domestic market.
It will take at least 2 years for Chinese manufacturers to become manufacturers of high-end PCB products. However, from the medium and long-term perspective, sufficient domestic financial support will enable local manufacturers to become the mainstream of the PCB industry.
The domestic companies with pure domestic capital are relatively small, but their growth rate is much higher than that of their peers. The industry concentration gradually increases. Listed companies increase their market share through investment and mergers and acquisitions in the capital market.
Although the competitiveness of most domestic PCB manufacturers still lies in the low-end products, some manufacturers have gradually entered the supply chain of major international customer Apple, such as Dongshan Precision's acquisition of US FPC manufacturer MFLX, becoming the supplier of Apple's wireless charging receiving end, Ultrasound Electronics. Involved in Apple's latest PCB business, providing SLP peripheral components.
It is expected that in the next five years, Asia will continue to dominate the development of the global PCB market, and China will remain at the unshakeable center of the Asian market. The PCB industry in Mainland China will maintain a compound growth rate of 3.7%. It is estimated that the industrial output value in 2022 will reach 35.698 billion. Dollars.
In contrast, due to the overall economic weakness, the growth of the PCB market in Japan and Europe is weak, but the global market will still maintain a compound growth of 3.2%. Under the trend of “large-scale and centralized” PCB companies, large-scale PCB companies that have established early lead advantages will gain greater advantages in the future global market competition.
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