TAOYUAN CITY, TAIWAN – Global PCB end-use demand was down 4.6% in 2019, according to Taiwan Printed Circuit Association. Global PCB output was $68.3 billion, down 1.2% year-over-year.
Global PCB output remained steady during 2019 as a result of the 5G infrastructure, says TPCA. The global market looked forward to long-awaited 5G opportunities in 2020, but the Covid-19 pandemic has disrupted this. However, the PCB industries in Taiwan, China, Japan and Korea have competed against each other for 5G opportunities and are waiting for the end of the pandemic, says the firm.
Chinese PCB companies had global market share of 26.5% in 2019, up from 23% in 2018. China had an output growth rate of 13.9%. Despite the Huawei boycott with the China-US trade war, other parts of the world still adopt Huawei’s equipment. Huawei has the potential to increase market share in 5G, says TPCA.
Chinese PCB companies such as Shennan Circuits, Zhuhai Founder PCB, Bomin Electronics, Sun & Lynn Circuits and Suntak have been used in most 5G infrastructure equipment in Mainland China, driving Chinese PCB output from 2019 to 2021. Additionally, the Chinese 5G infrastructure supply chain is complete, while Chinese PCB material companies increase self-sufficiency. The Chinese government has been investing more in 5G infrastructure and driving its internal demand.
Compared to the steady market shares of Taiwanese, Chinese and Korean companies, domestic and foreign PCB output of Japanese companies reached $11.8 billion in 2019 and fell to 17.3% from 19.1% in 2018, which is translated to the biggest decline of 10.4% in market share among all countries. Japanese flex PCB companies have embraced the strategies for emerging applications in the automotive, robot and biomedical sectors to avoid profits from being reduced caused by fierce competition in smartphone applications. Results are yet to be observed. However, Japanese companies are expected to focus on the business opportunities of various emerging and niche applications, such as robots, medical sensing, etc., after 5G devices became more popular.
Japanese companies will serve a more important decisive role in the PCB materials for 5G. For instance, Panasonic and Hitachi Chemical have developed comprehensive HF/high-speed materials, including those for substrate, rigid PCBs and flexible PCBs. Murata, Kuraray, and Kaneka have developed their own flex PCB materials. Mitsubishi Gas Chemical focuses on the development of HF substrates based on BT. Thanks to their progress in 5G PCB materials, there is no doubt Japan is the most competitive country in the world, which allows the Japanese PCB industry to take the plunge, says TPCA.
The Korean PCB industry has a steady market share due to its domestic brands. Its domestic and foreign output in 2019 was $9.22 billion, down 4.8%. LG Innotek withdrew from the PCB market in mid-2020. SEMCO also stopped HDI production in China. Other Korean companies making up the difference is still to be observed.
Samsung focuses on the development of 5G systems at 28GHz microwave to differentiate itself from Huawei, which focuses on Sub 6G. It is estimated it will compete against Nokia and Ericsson for the US, European, and Japanese markets. Although business opportunities driven by small cells are limited, Samsung, LG and Hyundai will form an industry chain alliance to compete for smartphone or vehicle 5G applications, says TPCA. Key components and parts used for Korean 5G equipment are supplied by Japanese companies. The Japan-South Korea trade dispute certainly will affect Korea’s development of 5G infrastructure.
The Taiwanese PCB industry still enjoys steady growth, despite fiercer competition in recent years. It had 31.4% market share in 2019, ranking No. 1 in the world. For 5G development, Taiwan has an edge on advanced semiconductor and high-end PCB manufacturing and technologies. For instance, demand for chips, ABF subtrates, IC subtrates, and multi-layer HF rigid PCBs required by 5G infrastructures has been emerging. The material manufacturers also focus on 5G materials. For instance, Unimicron Technology, Taiwan Union Technology, and Kinsus have invested in new production capacities for high-end smart manufacturing and 5G communication. As the high-end product applications have a promising future, it is estimated market competition will be fiercer. Taiwan’s inherent IT advantages will provide synergistic effects for the Taiwanese PCB industry.
The impact of Covid-19 on the global economy has not ceased, including a shortage of materials and labor in Mainland China and lockdowns in the US and European markets, which has caused a decline in orders. However, the Covid-19 pandemic is different from the SARS pandemic in 2003 in terms of pandemic surveillance, says the firm. Each country has surveilled the development of the pandemic via digital technologies, and TPCA expects opportunities for 5G systems, cloud and AI, such as the face mask matchmaking system, remote learning, smart health and AI risk controllers. The overall trend in 2020 shows 5G is still the key momentum to drive the growth of the industry and economy. At the end of the pandemic, it is believed 5G can invigorate the global industries.
