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Jabil's Global Commodity Intelligence Archive
Global Commodity Intelligence
Q3 2023
Jabil's Global Commodity Intelligence Archive
Global Commodity Intelligence
Q3 2023
PCB COMMODITIES
PRINTED CIRCUIT BOARDS
- The majority of suppliers believe that market demand will continue to be weak through 2023. Not many are optimistic about recovery in 1H ‘24.
- With weak demand, global PCB output is predicted to drop by around 5% in 2023 compared to the previous year which followed after a few years of growth.
- Suppliers continue to set high sales targets, despite weak demand, but face a challenge to keep sales flat per the previous year.
- Most of the market sectors continue to be weak, with automotive (mostly EV-related) and industrial sectors leading in terms of growth. The consumer continues to be the sector most affected by softening demand.
- Low demand leads to low production loading amongst Chinese PCB suppliers with an overcapacity situation in the PCB industry.
- Lead times are short with flexibility to build and deliver PCBs on short notice.
- PCB lead time has further improved to 5-6 weeks.
- Copper-clad laminate (CCL) lead time remains stable, which is 1-2 weeks. The lead time of special materials may be longer.
- The impact on the supply chain by the 2nd wave of covid in China did not cause any significant factory shutdowns.
- Production loading is on average 60%-70% amongst China PCB suppliers; some factory loading has been reported as low as 50%.
- Overall employee turnover is improving in the China PCB industry, as the unemployment rate deteriorates.
- Suppliers can offer better lead times to attract more new business due to no constraints on lead time and capacity.
- The global PCB market is expecting a 5% downturn in 2023. Suppliers saw a reduction of demand in Q2. They are hoping the 2nd half of 2023 improves but supporting evidence for such an expectation has not been forthcoming.
- The market is still buzzing with high inflation, risk of economic recession and high inventory levels.
- China+1 strategies have accelerated with more and more PCB manufacturers announcing their intention of building manufacturing plant in countries such as Thailand.
- Market Update
- Automotive
- EV car demand remains strong while conventional car demand has been dropping sharply.
- Communication
- Despite increase in India’s 5G demand, the development is slow. The overall market is quiet.
- Cloud & Server
- Overall demand is flat. Any potential demand growth will be driven by AI applications.
- Consumer
- Projections that it has almost reached bottom for this cycle and pickup should come with usual seasonal demand.
- Industrial
- Power and renewable energy are the two main drivers for growth.
- Medical
- Demand remains stable with better outlook for consumer health products.
- Automotive
- USD is getting stronger which is beneficial to suppliers who mainly trade in USD.
- The price of precious metals, such as gold, is increasing which will trigger increases in PCB costs.
- Facing continuous market demand downturn, PCB manufacturers are protecting their business by providing cost reductions and engaging growing market segments (such as EV cars and renewable energy) with attractive pricing.
- There is overcapacity in the PCB industry. PCB manufacturers are willing to offer more competitive bidding prices to win new business.
- Capacity investment has slowed down when compared to the last 3 years in the Chinese PCB industry
- There are 2 major areas of investment
- A majority of investment goes into upgrading machinery for higher efficiency and better profit margins, rather than expanding capacity.
- In order to diversify geopolitical risk, more and more customers are looking for a China+1 solution. China-based PCB manufacturers are exploring the feasibility of having manufacturing location(s) elsewhere in the SE Asia region.
- Fastprint acquired Ibiden (Beijing) to expand its technology capability and diversify its product offering.
- AKMMV merged with AKM to increase market share and maintain a better market position.
- Sunshine announced the acquisition of Vision Industries in Penang, Malaysia.
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