PCB Technical - Is there a future for China's PCB industry?

1. China occupies more than half of the global PCB market. The mainland is on the rise

Printed circuit board (PCB) products have been used in commerce since 1948, and began to rise and be widely used in the 1950s. The traditional PCB industry is a labor-intensive industry with a lower technology intensity than the semiconductor industry. Since the beginning of the 21st century, the semiconductor industry has gradually shifted from the United States and Japan to Taiwan and China. So far, China has become an influential PCB producer in the world, with PCB output value accounting for more than 50% of the world.

In 2018, the global printed circuit board output value reached 63.6 billion U.S. dollars. According to the data of the Institute of Obstetrics, Industrial Technology Research Institute, although Taiwan, China still won the world market share of 31.3% in 2018, the proportion of mainland China also reached 23%., And the market share and growth rate are rising steadily, gradually advancing Taiwan’s leading position. The two together accounted for 54.3% of the global PCB output value, firmly sitting on the NO1 throne.

2. In 2018, China's PCB output value exceeded 34 billion and multi-layer boards dominated the market

China's electronic circuit industry is on the path of "industrial transfer", and China has a healthy and stable domestic market and significant manufacturing advantages, attracting a large number of foreign companies to shift their production focus to mainland China. After years of accumulation, the domestic PCB industry has gradually matured. As the main production area for single-layer PCBs, mainland China is further extending to the mid-to-high-end market.

In recent years, the scale of China's PCB output has expanded year by year. According to statistics from the "Market Outlook and Investment Strategic Planning Analysis Report for China's Printed Circuit Board Manufacturing Industry" released by the Qianzhan Industry Research Institute, China’s PCB output value reached US$20.17 billion in 2010. As of 2017, China’s PCB output value has increased to 20.17 billion U.S. dollars. 29.73 billion US dollars, an increase of 9.7% year-on-year, accounting for 50.53% of the global share. Entering the end of 2018, China's PCB industry output value scale and growth rate have reached a record high, the output value scale reached 34.5 billion U.S. dollars, an increase of 16.0% year-on-year.

As downstream electronic products pursue the development trend of lightness, thinness, shortness and smallness, PCBs continue to develop in the direction of high precision, high integration, and lightness and thinness. However, compared with Japan, South Korea, Taiwan and other regions, PCB products in mainland China are still dominated by low-end products such as single and double panels, and multi-layer boards with less than 8 layers. In 2017, multi-layer boards accounted for 41.5% of China's PCB products.

3. The industry is mainly concentrated in Jiangsu and Guangdong

As basic electronic components, PCB products are mostly built around areas where downstream industries are concentrated. At present, there are about 1,500 PCB companies in mainland China, which are mainly distributed in areas with high concentration of electronics industries such as the Pearl River Delta, Yangtze River Delta and Bohai Rim, large demand for basic components, and good transportation and water and electricity conditions. Among them, the two major provinces of Guangdong and Jiangsu have a high degree of concentration. In 2017, the sales revenue of the PCB industry in Guangdong accounted for 46.26% of the industry, and Jiangsu reached 34.77%. The total proportion of the two reached 81%, and the regional concentration was relatively high.

4. Low concentration of enterprises. Foreign-funded enterprises occupy the main market position

China's PCB industry is developing rapidly, but the initial output value contribution mainly comes from foreign capital's production capacity in China, and the competitiveness of domestic companies is relatively weak. According to CPCA statistics, in the PCB industry, foreign-invested manufacturers account for 58% of the total in China. Although the number of domestic-funded manufacturers has increased, their scale is relatively small. According to the revenue data of domestic PCB companies in 2017, domestic-funded companies with a scale of more than 1 billion accounted for less than 30%. In the top ten list of domestic PCB manufacturers, there are only two local Chinese companies on the list, with a concentration of 40.18% in the top ten. Chinese PCB companies are small in scale and low in concentration.

5. Emerging industries promote the development of the industry. In the future, China’s PCB output value will exceed US$40 billion

China is an influential manufacturing base and consumer market for electronic information products in the world. With the continuous advancement of "Made in China 2025", it has developed into emerging markets such as mobile Internet, Internet of Things, big data, cloud computing, artificial intelligence, and driverless cars. A group of world-renowned local companies have emerged, providing more development opportunities for the supporting electronics manufacturing industry.