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Jabil's Global Commodity Intelligence Archive
Global Commodity Intelligence
Q1 2024 | JANUARY- MARCH
Jabil's Global Commodity Intelligence Archive
Global Commodity Intelligence
Q1 2024 | JANUARY- MARCH
PCB COMMODITIES
PRINTED CIRCUIT BOARDS
SUPPLY
- The general lead time is 5 to 8 weeks. However, the lead times for Chinese suppliers might be extended by another 1 to 2 weeks in preparation for the Chinese New Year.
- The average capacity utilization of PCB suppliers in China stands around 70%.
- Copper Clad Laminate (CCL) lead time varies. Standard CCL typically requires 1-2 weeks, while special (high-speed, low-loss) materials require a longer lead time.
- Overall, standard raw materials have no constraints on lead time.
- Persistent weak market conditions result in high inventory levels.
MARKET DYNAMICS
- Most PCB suppliers anticipate that 2023 will end with reduced revenue compared to the previous year.
- The market uncertainty has slowed growth due to inflation, reduced end-customer demand, and high inventory levels.
- Thailand remains the primary choice for PCB investment in any China+1 Strategy due to several key factors. These include more established supply chains, consistently favorable pro-investment policies by the government, a business-friendly atmosphere, cost competitiveness, etc.
- Automotive: EVs sustain their strong market presence despite a drop in traditional car demand.
- Communication: The instability of 5G technology has resulted in declining demand.
- Cloud and Server: The demand for AI servers is steadily increasing.
- Consumer: Despite the market's weakness, there's a seasonal demand increase, especially for smartphones.
- Industrial: New energy is experiencing growth while traditional industrial markets are declining.
- Medical: Demand remains stable. The popularity of consumer health products continues to grow.
PRICE
- The uptrend of the USD against RMB remains favorable for Chinese PCB suppliers to trade in USD.
- Raw material prices are expected to increase gradually in 2024. However, price increases are currently held back due to weak market conditions and low demand.
- PCB Suppliers are already facing thin margin challenges and struggling to keep their prices competitive. This situation is made worse with their more aggressive competitors sacrificing margins to keep factories running.
- With little or no profit, financial stability becomes a big concern. It can potentially threaten PCB suppliers’ long-term financial health and impact future investments.
Overall Demand Outlook
- As Q4 draws to a close, most suppliers are revising their targets and forecasts to better reflect the current market conditions.
- The overcapacity issue persists except for a few Chinese PCB Suppliers experiencing a slight uptick in sales. This is driven by seasonal demand in certain market segments, especially the smartphone industry.
- Despite the economic downturn, AI Servers and Automotive continue to shine with exceptional performance. However, there has been a slowdown compared to last quarter.
- Most PCB suppliers are cautiously optimistic about the PCB market 2024. Many of them are hoping for a demand rebound in the second half of the year.
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