The imbalance in supply and demand during COVID-19 in 2021 and 2022 created a global bubble of consumption. When the pandemic ended, pressure from destocking and rate increases to curb inflation led to a massive downturn in the global PCB industry in 2023. The Science and Technology International Strategy Center (ITSI) of the Industrial Technology Research Institute (ITRI) estimated that the total output of the global PCB industry in 2023 declined by 15.6% to USD 73.9 billion. 

In China, Japan, Taiwan, and Korea, among Chinese-owned plants, their relatively low proportion of substrates, as well as strong growth in automotive applications, meant they outperformed the global average with a decline of just 9% for the year. Korea on the other hand had the highest proportion of substrates with most concentrated in consumer electronic memory applications so experienced a decline of more than 20%; while substrates accounted for a significant proportion of the industry output in Japan and Taiwan, their relatively balanced product mix as well as the support of automotive applications meant the level of decline fell somewhere between China and Korea.

The lower base period of 2023 meant that the electronics industry as a whole should experience stronger growth in 2024. The restocking of inventories should also see the PCB industry enter another cycle of growth. Consumer demand will need more time for a positive feedback cycle to reestablish itself but may still benefit from upgrades to some product specifications. The output of the global PCB industry is expected to climb back up to USD 78.2 billion in 2024, an increase of 6.3% from 2023. Once consumer market growth approaches that of the global economy, the global PCB industry output should begin sustaining 4-5% long-term growth, reports the TPCA.

The association is putting a spotlight on four key issues

First;international competition in building a resilient semiconductor industry is affecting PCB and substrate ecosystems. Governments have rolled out policies aimed at strengthening their semiconductor supply chains in the wake of COVID-19 supply chain disruptions and semiconductors becoming a strategic commodity. 

In addition to the increase in incentives, the US-China technology embargo is continuing to intensify, forcing foreign-owned companies such as TSMC, Samsung, and SK hynix to limit their expansion in China. China is therefore even more reliant on its domestic semiconductor industry now, but there are still questions over its economic slowdown and the sustainability of its massive subsidies. What should be closely monitored in the future is the effect of China’s push to accelerate its level of domesticalisation on advanced packaging, a field that is not yet under sanctions.

The US introduced its “Supporting American Printed Circuit Boards Act” in 2022. The Act called for the government to provide USD 3 billion in funding to increase the production of PCBs. The bill was ultimately not voted on but served as an indication that PCB was now attracting the attention of policymakers. Later on, President Biden and Prime Minister Trudeau announced on March 24, 2023, that the two countries would spend USD 52 million to support PCB production in North America. Domestic PCB production will also be expanded under the “Defense Production Act” to prevent gaps in critical technologies that threaten national security.

Second;the emergence of carbon-neutral electronic products ups pressure on the supply chain to curb carbon emissions.

For the electronics industry, there is no doubt at all that it must adapt to the macro environment and reduce its carbon emissions. The only variable is the level of pressure from customers and government regulations.

Third;a new PCB cluster takes shape in Southeast Asia as supply chains accelerate the pace of globalisation. Customer demand for risk diversification and the development of new markets meant PCB vendors began looking southward in their investments at the end of 2022. The most popular destinations have turned out to be Thailand, Vietnam, and Malaysia. All the new investments announced to date indicate that the next emerging PCB cluster will be in Thailand. China may remain the main base of global PCB production, but the latest wave of investments in Southeast Asia will divert resources away from foreign investments in China. 

More than 10 leading Chinese companies have also invested in Thailand, so China’s share of global PCB production output will start to decrease over time.

Fourth;generational product upgrades will become the main source of growth. The lack of killer applications makes large increases in sales of end-user products unlikely. Though a small increase in shipments of key end-user products is expected in 2024, this will be mainly due to inventory replenishment rather than a recovery in demand. Growth will therefore be driven by generational changes in technologies and products. Examples include expansion in substrate demand from developments in advanced packaging, continued increases in automotive PCB prices from autonomous driving, as well as boost to rigid PCB products from AI applications. These are all products that will have a more significant effect on the output of the global PCB industry.