TAIPEI – While 2022 was an outstanding year for the global PCB industry, with output seeing 3.2% annual growth to reach $88.2 billion despite negative factors like geopolitics, high inflation and high inventories, but those negative factors will likely continue to affect the industry for at least the first half of 2023, according to guidance from the Taiwan Printed Circuit Association.
Carriers Continue to Drive Global PCB Market but Slowdown Suggests Caution
Continued chip supply uncertainty meant carriers became the counter to negative factors and even the engine for growth for the electronics industries of Taiwan, Japan and Korea. Strong demand from high-performance computing and further upgrades to end-user product specifications all factored in global PCB outperforming end-user sales. Leading Japanese and Korean PCB makers such as Ibiden, Shinko, SEMCO, and LG-Innotek saw carrier sales account for over 90% of their PCB business, meaning carriers accounted for almost all growth by Japanese and Korean peers. On the other hand, Chinese companies that once enjoyed rapid growth all experienced a noticeable slowdown in their gross profit margins and net profits due to the lower ratio of carriers.
Carriers were not immune to the economic downturn in the second half of 2022, however. For example, BT carriers targeted at consumer products saw their growth slow in the fourth quarter of last year. ABF carriers for high-performance computing are also seeing mixed signals due to greater uncertainty in the future. While carriers are likely to maintain positive growth in 2023 compared to other types of PCB products, that growth is expected to be lower than last year and its contribution to global industry output will not be as marked.
PCB May Duck and Jump in 2023 with Better Second Half
Weak consumer demand in the second half of 2022 produced a decline in sales at many companies that clawed back almost all the gains from optimistic growth in the first half, and that decline will likely continue into 2023. There is a chance that demand will gradually recover in the second half of the year, and on the whole, there should be less volatility in global end-user products for 2023.
If inflation slows, the economy and consumer demand may see growth again in the year's second half, and if that happens, there is a chance that the global PCB industry output will continue to grow by 3% and reach $90.8 billion in value. If one-third of global economic entities go into recession as forecast by IMF, however, the PCB industry may shrink instead. This decline in the value of the global PCB industry has been cautiously estimated to be around -4% (to $84.7 billion).
The Two Key Issues for the PCB Industry are Global Supply Chain Shift and Net-Zero Emissions
The COVID-19 pandemic and international political turmoil triggered a global supply chain strategy shift over the last three years, with the US CHIPS Act, for example, accelerating the semiconductor supply chain’s return to the Americas. Customer demand for geopolitical diversity risk is driving the PCB industry to also look at relocating to Thailand, Vietnam and Malaysia, and that shift in the global industry supply chain is now beginning to gather speed.
The global risk posed by extreme weather also means that low-carbon transformation is now critical to corporate survival. In the PCB industry for example, Zhen Ding Technology, Unimicron, Unitech, FLEXium, Ibiden, Shinko, Sumitomo, Meiko, Fujikura, Nitto, LG-Innotek, SEMCO and AT&S are all leading enterprises that have disclosed phased carbon reduction targets. All the industry leaders spearheading the transformation suggest that sustainability is now a new tool for competitiveness that businesses are rushing to master. Those two key issues will continue to gather steam in 2023 and should shake up the global PCB industry competition.
