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Most of the developed economies have seen a GDP growth between 1.2 and 2% during 2016 and 2017 is not forecast to show any improvements on these levels. In fact, there is a greater probability that averages will fall slightly. Of the developed leading nations, Japans GDP is set to fall below even this forecasted minimum with GDP growth likely to remain below 1% in 2017.
Commodity prices globally are strengthening and indeed there are price rises in the pipeline for copper – a key material for the electronics industry, of course. This will help to fuel the GDP of economies that rely on natural resources, many of which are emerging economies.
The Conference Board (based in the US) provide projections for the output growth of the world economy. Their figures would signpost Chinese GDP to grow by 3.8% in 2017, down slightly from 3.9% in 2016.
This prognosis is not at odds with the forecasts for the PCB industry which is illustrated in Figures 1 – 4 shown. It too, reflects a period of muted growth for 2017. However, the charts ( Figures 1 – 4 are in value terms) do not factor in the proposed laminate price increases for 2017 whose levels have been influenced by the proposed rise in copper foil prices.
Several copper suppliers have decided to switch part or their entire capacity to the production of Battery Foils for Electrical Cars. (There is a particularly strong demand in China). As a result, there is a shortage of standard foils for the electronics market. This situation is unlikely to change over the next 6 months.
In addition, during the third quarter, a number of companies have been trying to raise their prices as many report unsustainable margins for 2016. With the advent of small feature sizes and quality requirements in many of the end markets going forward, PCB companies are going to have to invest even more in up to date equipment and will need a sufficient margin to re-invest.
This may well be beyond some manufacturers in 2017. Therefore much of the increased demand value in 2017 is likely to come mainly from this potential price increase, rather than any uptick in underlying demand.
Nolan Johnson, I-Connect007
The big news in the industry this week was the new bill introduced to the U.S. Congress in support of the PCB manufacturing industry. The Supporting American Printed Circuit Boards Act of 2022, which was introduced by Reps. Anna Eshoo (D-CA) and Blake Moore (R-UT), incentivizes “purchases of domestically produced PCBs as well as industry investments in factories, equipment, workforce training, and research and development.” The bill is a PCB-oriented complement to the semiconductor-oriented CHIPS Act of 2021.
Jeff Brandman, Aismalibar North America
Heat has been a significant concern in electronics since the beginning of the electronics age when hot glowing vacuum tubes were first used to receive and transmit data bits. The transistor and integrated circuit effectively solved that basic problem, but increases in integration resulted in increased concentration of heat, exacerbated by relentless increases in operating frequency. While improvements in electronics technology have been able to mitigate many thermal issues at chip level thanks to improved semiconductor designs devised to operate at lower voltages (thus requiring less energy) the thermal management challenge continues to vex electronic product developers.
Andy Shaughnessy, Design007 Magazine
It’s been a crazy week, with lots of bad news coming out of Ukraine. (I’m a news junkie by trade, but I confess that some days I just unplug from the news completely to avoid overdosing on negativity.) And, as you might have guessed, this is all having ill effects on our electronics supply chain, which is already stretched thin. This is reflected in our IPC news item that shows an uptick in PCB sales in February, but a drop in bookings YOY, in part due to the trouble in Eastern Europe. But there’s positive news in this week’s top reads. We have a NextFlex article about an innovative flexible technology called flexible hybrid electronics (FHE) and a great interview by Dan Beaulieu. We also have a column by Travis Kelly, who discusses PCBAA’s efforts to lobby for American manufacturing in Washington. And last but not least, let’s welcome our two newest columnists, Paige Fiet and Hannah Nelson, who discuss their excitement about entering this industry.