PCB demand outbreak, 5G drive volume and price rise

PCB as the key electronics components used in almost all electronic products is the key assembly of electronic components with interconnected parts, not only to provide electrical connection for electronic components, also carrying the electronic device digital and analog signal transmission, power supply and the transmit and receive radio and microwave signals, such as business functions, the vast majority must be equipped with electronic equipment and products, and therefore is known as the "mother of the electronic products.

 

PCB industry is the industry with the largest proportion of output value in the global electronic component segmentation industry. With the deepening of research and development and continuous upgrading of technology, PCB products are gradually developing towards the direction of high density, small aperture, large capacity, and lightweight.

 

PCB as the electronic circuit upstream basic material, the change is due to the change of the downstream electronic product demand. After the outbreak of the financial crisis in 2008, the global economy was weak, and electronic consumption was also impacted. In 2009, the output value of PCB dropped by 15%. After the compensatory recovery in 2010, the innovation of electronic products encountered a bottleneck and the growth was weak.

 

As the cornerstone of electronic products, PCB is widely used. In 2019, wired communications infrastructure, wireless communications infrastructure, servers, mobile phones and PCS accounted for 57% of the total output value of the PCB industry, according to Primark.

 

According to Primark, global PCB output in 2019 was about $63.7 billion, up 2.1% from a year earlier. Global PCB output is expected to reach $74.756 billion in 2023. The global PCB industry market scale is still expanding, the market prospects are considerable.

 

With the rising labor costs in Europe, America, Japan, and other countries and regions and the transfer of downstream consumer electronics manufacturing to the Chinese mainland, the Chinese mainland has become the largest and fastest-growing PCB manufacturing base in the world. The output value of PCB in China is estimated at 33.744 billion us dollars in 2019, and it is predicted that by 2023, the output value of PCB in China will reach 40.556 billion us dollars, accounting for 54.25%. The PCB market in China has been developing rapidly, growing faster than the global industry.

 

PCB is the systematic collection of each electronic product. The core substrate is a copper-clad plate. The upstream raw materials mainly include copper foil, glass fiber, and synthetic resin. From the perspective of cost, the copper-clad plate accounts for about 30%-40% of the whole PCB manufacturing. Copper foil is the most important raw material for manufacturing copper-clad plate, and the cost accounts for 30% (thin plate) and 50% (thick plate) of the copper-clad plate.

 

In 2019, China will add 129,000 tons of electrolytic copper foil capacity, bringing its total capacity to 593,000 tons. Among them, the production capacity of PCB copper foil increased by 31,000 tons, and the total production capacity reached 333,000 tons. The copper foil capacity of lithium battery increased by 98,000 tons, bringing the total capacity to 260,000 tons. From the perspective of new projects, the production capacity increment of high-frequency high-speed PCB copper foil used in 5G construction is not significant. Driven by the market scale of nearly 10 billion yuan required in the construction period of 5G base station, the construction of domestic production capacity and output and the domestic replacement speed will still be improved.

 

PCB product category is numerous, can according to the product of conductive layers, flexural toughness, assembly method, the base material, special features, such as classification of a variety of ways, but in practice, often according to the size of production of PCB each subdivision industry mixed classified as single panel, double panel, multilayer board, HDI board, sealing loading plate, flexible plate, just scratch combined with a plate and special plate.

 

Flexible boards are widely used, and downstream terminal products mainly include high-end consumer electronics such as smartphones, tablets, PCS and wearable devices. The FPC's market share continues to rise as electronics continue to shift towards lightweight, small, versatile devices. Among them, mobile phones account for about 33% of the total market share of FPC. The FPC market is expected to expand further thanks to the development of 5G communications and the intelligence of consumer electronics.

 

Multi-layer board can be divided into low - layer board and high - layer board. Medium and low layer board generally refers to the printed circuit board with 4-6 layers of conductive graphics, mainly used in consumer electronics, personal computers, laptops, automotive electronics, and other fields. High-rise board refers to a printed circuit board with 8 layers and above 8 layers of conductive graphics, which can be used in communication equipment, high-end server, industrial control medical, military and other fields.

 

Currently, the multilayer board market is still dominated by mid - and low-layer boards (63%), but Prismark predicts that the future output growth rate of high-rise boards will be higher than that of mid - and low-layer boards and the compound annual growth rate will reach 5.0% from 2018 to 2023.

 

The global PCB industry market share is relatively scattered. In the global PCB market in 2018, the number one company, pending, accounted for only 6% of the market, which is similar to the number two, three and four companies, such as schindler, jianding and samsung electric.

 

According to Prismark, the output of the world's top 20 PCB board manufacturer grew at a compound annual growth rate of 5.7% from 2011 to 2018 (the global PCB market grew by 2.4% in the same period), and their combined market share increased from 38% in 2010 to 48% in 2018, with a gradual increase in market concentration. Prismark counted six Chinese companies among the top 40 PCB factory by global revenue in 2018.

 

PCB products produced in China are mainly medium and low-end products, such as single and double panels, multi-layer boards with less than 8 layers and low-order HDI boards. Low-layer plate accounted for 33.31% of the total output value;Rigid double panels accounted for 11.57% of the total output value; HDI board accounted for 16.63% of the total output value and 59% of the total output value of the global HDI board. Packaging substrate only Shennan circuit, xingsen technology, chongda technology, and danbang technology four listed companies have production technology.

 

Shennan circuit has mastered the processing technology of high-end PCB such as packaging substrate and multi-layer high-speed board. Xingsen technology as a professional model manufacturer can produce high-speed plate, IC packaging substrate; Chongda technology mass production of packaging substrate and high-frequency high-speed plate, improve the layout of the high-end product line.

 

With the high value of high-frequency high-speed PCB, the boom cycle brought by the construction of the 5G base stations and the relatively high technical barriers, the performance of relevant industrial chain enterprises has been growing rapidly. 2020 will be the first year for the large-scale construction of the base stations.With the adjustment of industrial structure and the improvement of production capacity concentration, the production technology of leading China PCB manufacturer will be further improved, and the possibility of domestic substitution in the domestic high-end product market will be further enhanced. In the future, with the emergence of new demands such as automotive electronics, data centers, and artificial intelligence, the PCB industry will usher in a new growth point.