PCB COMMODITIES
PRINTED CIRCUIT BOARDS
OVERALL DEMAND OUTLOOK
ECONOMIC OUTLOOK
The economic headwinds from US trade policies are expected to create significant impacts, both inside and outside of the US. If the US imposes sweeping across-the-board tariffs, trade tensions are likely to intensify. This would adversely affect consumers and businesses in the impacted countries. Foreign governments may mirror these actions by imposing taxes on US exports. This potential tit-for-tat retaliation could further shrink demand, leading to increased economic losses.
OUT-OF-CHINA (OOC) DEMAND
In response to the implementation of tariffs, the shift towards Out-of-China (OOC) PCB manufacturing is primarily driven by international customers seeking to mitigate the risks of trade uncertainties and high taxes. They are doing so to safeguard their businesses.
PCB PRICE TREND
As the market demand becomes more elastic, the PCB industry is expected to face increased competition. Under such unfavorable market conditions, PCB manufacturers may find themselves acting as price takers. The future of Out-of-China (OOC) PCB alternatives and their pricing structures tentatively remains uncertain in the current market landscape. However, greater clarity is anticipated as more OOC PCB manufacturers begin mass production in 2025 & 2026.
PCB SALES PERFORMANCE
Most PCB manufacturers anticipate ending 2024 with revenues in line with last year’s sales revenues or have adjusted their targets to reflect the current market conditions. Some are also looking at adjusting their business strategies to focus on profitable technologies and market segments, aiming to achieve organic growth with their available resources. Currently, PCB sales expectations for the first half of 2025 are pessimistic, with most manufacturers hoping the market situation will improve in the second half of the year.
PCB OVERVIEW
In the long term, adopting an additional option of an Out-of-China strategy could emerge as the most effective global solution. This strategy allows businesses to better align local policy regulations with market demands. It ensures resilience and agility in an environment marked by rising protectionism and shifting geopolitical dynamics.
SUPPLY
OVERALL PCB LEAD TIME
Total lead time varies from 5 to 8 weeks, with simpler, lower-layer count PCBs requiring 5 weeks, and more complex, higher-layer count PCBs taking up to 8 weeks.
COPPER CLAD LAMINATE (CCL) LEAD TIME
Standard raw materials typically have a lead time of 1-2 weeks, whereas the lead time for special (high-frequency low loss) materials has risen to 3-4 weeks. The lead time of Panasonic M7 & M8 material, which uses low-DK Glass Cloth from Nittobo, has been extended to 4 to 6 months.
MANUFACTURING CAPACITY IN CHINA
China's PCB factories are operating at 75% capacity, primarily driven by year-end seasonal demand. Loading is expected to remain stable through the first quarter of 2025, as the Lunar Chinese New Year approaches and pull-in demand typically increases.
OUT-OF-CHINA (OOC) MANUFACTURING INVESTMENT
The PCB industry continues to show signs of expansion in Thailand. Foreign investors from China, Taiwan, Japan, and Hong Kong are fueling this exponential growth. The majority of these companies expect to start production by the end of 2025, with some launching in 2026.
SUPPLY & SUPPLY CHAIN VISIBILITY
As the PCB industry experiences this huge unprecedented shift in investment, it faces a variety of supply chain disruptions including geopolitical instability, demand fluctuations, forecasting challenges, logistics bottlenecks, and sustainability concerns. All these could become common obstacles moving forward. Keeping a close eye on suppliers’ well-being and navigating through these challenges may become part of the regular routine toward enhancing Supply & Supply Chain visibility.
MARKET DYNAMICS
OVERALL MARKET SENTIMENT
- The sluggish market in 2025 brings both challenges and opportunities, with overall market sentiment remaining unclear and generally pessimistic.
- The Electric Vehicle (EV) market is experiencing a slowdown, except for companies focused on Advanced Driver Assistance Systems (ADAS).
- The integration of Artificial Intelligence (AI) across products like computers, mobile phones, PCs, laptops, and healthcare devices has driven a surge in demand for AI-enabled applications.
- Other market segments remain flat or have seen a decline in demand due to slow growth.
PCB INDUSTRY OUTLOOK
Most PCB suppliers have revised their overall forecast for 2024 downwards and remain pessimistic about PCB sales in the first half of 2025. Many suppliers are bracing for tougher market conditions and potential price wars.
TRADE TENSION
The ongoing trade war between the US and China continues to create a challenging market environment. With the latest US restrictions in place, downstream manufacturers are taking steps to distance themselves from anything "Made-in-China“.
SUPPLY CHAIN RESILIENCY
As upstream suppliers follow the trend of PCB manufacturers expanding into Southeast Asia (specifically in Thailand), production and price competitiveness are expected to gradually improve. Moving forward, this shift will definitely help bridge the supply chain gap and strengthen overall supply chain resiliency.
DEMAND-SIDE ANALYSIS
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Company
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Development
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Automotive
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ADAS (Advanced Driver Assistance Systems) is experiencing strong growth with a steady pace of expansion. However, this growth is not rapid enough to compensate for the slowdown in the overall automotive market.
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Communication
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Overall demand has dropped
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Consumer
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Inventory in the consumer segment has gradually been depleted. Growth is expected, particularly in consumer products (such as PCs, mobile phones, and others) that incorporate AI into their applications.
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Cloud & Server
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Networking demand remains soft while there is a steady increase in demand for AI server products.
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Industrial
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Overall demand remains stable
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Medical
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Demand is stable or experiencing modest growth, especially for consumer healthcare and related products that integrate AI applications.
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PRICE
COPPER CLAD LAMINATE (CCL) PRICES
Copper prices remain stable, maintaining an average similar to last year. The price of CCL has stabilized since Q3 2024.
RAW MATERIAL PRICES:
The price of epoxy resin used in CCL has remained stable while gold pricing continues to remain high.
PCB PRICES
Given the weak market demand and the stabilization of CCL prices, suppliers are experiencing less cost pressure compared to the previous quarter. With a pessimistic outlook for the first half of 2025, suppliers are exercising caution with pricing. They are working to balance pricing, allocation, and demand to sustain a stable and positive profit margin.
PCB PRICING OUTLOOK
Looking ahead to 2025, PCB prices will remain sensitive to the volatile market conditions. Some suppliers are shifting their focus to specific product segments and reevaluating their pricing strategies in an effort to sustain healthy profit margins.
