A Year in Review: Cultivate New Opportunities in Crisis, Start Fresh

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Recently, the China Electronic Circuit Industry Association (CPCA) invited Dr. Shiuh-Kao Chiang from Prismark to present an online video report regarding the current and future impact of the current epidemic on the global electronic circuit industry. The I-Connect007 China Team attended the presentation, and the following report summarizes some of Dr. Chiang’s remarks.

The Coronavirus Epidemic’s Impact on the Global PCB Industry

The epidemic’s impact stunned global economic activities for a short period of time, and investment and consumption behaviors immediately halted. For the PCB industry, consumer behavior made a huge impact on the market, which will see a series of changes this year. Data shows that China’s GDP fell 6.8% year-on-year in the first quarter, and consumer products—especially cars, PCs, and mobile phones—fell sharply and have yet to recover.

The supply chain broke first, followed by unstable demand. The same trend was repeated many times over across the global electronics industry. So far, first-quarter financial statements of well-known enterprises—such as Apple and Intel—have failed to predict the overall situation for the rest of the year due to uncertainties with the virus.

The Impact of the Epidemic on the Electronic Industry Is Inconsistent

The impact of the epidemic on the economy is unprecedented and has caused great harm to the long-term effect on recovery. Figure 1 shows the trend of GDP change in the history of the world’s development for the past 100 years. This year’s coronavirus epidemic is expected to cause more harm than the financial crisis of 2008.


Figure 1: A 100+ year history of global GDP.

In 2019, the global electronic industry was stagnant, and the total output of PCBs declined. There were disappointing results from systems, chips, and PCBs. For example, production of automobiles, mobile phones, consumer electronics, PCs, servers, etc., slowed down. At the beginning of 2020, the hope was that 5G would drive the whole market forward, but with the epidemic, those hopes have not been realized.

According to the model by Prismark, there are four scenarios (Figure 2) used as a benchmark to analyze the direction of the industry. Currently, it is predicted that the demand for electronic products will decrease by 6% in 2020 (Figure 3). This puts the electronic manufacturing industry in the “terrible” category and shows a “pipe-type” recovery. This means recovery will be slow and might find stability only when it reaches 70–80%.


Figure 2: Coronavirus impact on electronics production (four scenarios).


Figure 3: 2020 electronics industry forecast evolution.

Recession is inevitable, but it will look different depending on the sector of the industry. Some industries will not survive, while others will have an opportunity to rise. Some fields will stay healthy and vibrant—for example, 5G base stations and networking will keep growing. There will be a significant decline in industrial control-related fields—especially automobile and oil refining. Medical, military, and aerospace industries will remain relatively stable. In general, the introduction of 5G, electric vehicles, and autonomous driving will bring long-term growth to the PCB industry, but with the influence of the epidemic in 2020, the demand for consumer electronics and automotive PCBs will still decline.

The Impact of the Epidemic on the PCB Industry in the Short Term

Sales expectations for computer products were not that high going into 2020, but because people were/are staying home, the demand for notebook and tablet computers increased rapidly. Growth was strong from March to May, but it’s unclear how it will play out from June to August.

For products like servers, storage, AI, and high-performance computers, the market is expected to show growth in 2020, which contributes to a good performance in the carrier boards market. Communication-related products are divided into two categories: 5G and consumer electronics. 5G base station-related products should see growth, while the declining demand for mobile phones will have a strong impact on the main consumer market. Because of low consumer response, general consumer products will be affected, but the consumption of wearable products—such as bracelets, headphones, and game consoles—will rebound.

The automotive electronics industry faces some big challenges, but in the long run for electric vehicles, driverless, and safety systems, the direction seems clearer. After an adjustment period, requirements for printed circuits—in the form of materials, performances, and specifications—will be very different. We should take it seriously.

For aviation, medical, and industrial control, there has been a slight decline in revenue. It is expected that in other divisions of the electronics market, with the exception of medical electronics, demand will continue at the same rate as the previous year. In 2020, stimulated by the epidemic, the demand for PCBs in the medical sector has greatly increased, but it will still have only a limited impact on the overall demand.

The chip industry remains relatively strong. Companies like Intel and TSMC suggest an annual growth of more than 9%. Data processing-related products—high-speed computing servers, data storage, switch and routers, and more—will keep growing, and it is expected that this sector’s demand for PCBs will increase.

PCB Orders Currently

The epidemic has changed the electronics industry in many ways. Although production was halted earlier in the year, that is no longer the case, and the focus has turned to demand. Each quarter this year will be affected by varying degrees. In the past, there’s usually a sharp drop in the first quarter, strong growth in the second quarter, a rush in the third quarter, and maintenance in the fourth quarter. This year, however, is proving to be very different. We saw production disrupted in the first quarter and sharp growth in the second quarter. The third quarter might sway with the demands, and the fourth quarter remains unclear.

The PCB industry is different from the chip industry because half of the PCB production capacity is in China. From January to February, production in Chinese factories dropped due to the shutdown but began to recover gradually afterward. In March, output exceeded expectations and was even better than the same period of previous years. This was because orders submitted in February transferred from other countries, or there was an increase in the number of orders coming in. However, there will be some adjustments at the beginning of the third quarter of 2020, as orders related to automobiles, computers, and mobile phones will decline.

Highlights of the PCB Market in 2020

There is no doubt that 2020 will be a very challenging year for the PCB industry. Prismark predicts that the total PCB output will decline by 4.9% in 2020 if it remains in the “terrible” category.

The main areas in the PCB market to see decline are data centers, cloud computing, networks, and 5G technology. But there is strong growth potential in the fields of high-frequency and high-speed substrates and special multilayer boards. The weak demand for smartphones, automobiles, and consumer electronics products will lead to a slowdown in demand for FPC and HDI.

Since 2018, the electronics market has been transforming, with infrastructure equipment as a key driver. Therefore, high-speed and high-frequency multilayer boards and advanced packaging substrates are leading the way. Once the data center investment cycle and the installation of 5G wireless infrastructure are completed, the PCB industry can expect strong growth as consumer electronics, particularly mobile phones, will have new functions. After 2021, 5G smartphones and IoT will drive the growth of HDI and FPC boards.

There is also strong demand for FCBGA substrates of CPU, GPU, network, and AI applications. Several enterprises have invested more than $4 billion since 2018. For example, Unimicron and Nanya have actively expanded their production capacity in Suzhou and Kunshan.

The Prospect of the Future PCB Industry

The forecast for 2021 is positive. The PCB industry will not only increase its output but improve its technology. This is very important for the PCB industry. In the past, the PCB industry has been under pressure, but during these years, the growth on the PCB end has been higher than on the system end. This is because the PCB industry has increased in complexity.

For example, due to declining unit prices over the past 19 years, total PCB output showed no big changes, but this trend looks to change because oversight on technological advances has added value. HDI and flexible boards have grown quickly in the past thanks to mobile phones but have declined in recent years. Once 5G is completed, there will be room for future growth. There are twists and turns with the carrier as well. From 2000 to 2011, it grew at high speed and then declined rapidly. After 2017, it grew again. Now, growth is seen by ABF carrier and AiP carrier in a high-frequency environment.

China is likely to see more localized growth faster than that of foreign companies, and some products will be moved out. For example, Japan’s and South Korean’s flexible board and HDI production continue to move into Southeast Asia. Some regions will be blocking and developing special applications, so it’s important to pay attention to Eastern Europe, Brazil, Mexico, and India, which will focus on specific kinds of products.

The Post-Epidemic Era

IMF estimates that the global GDP will fall by 3% in 2020 (Figure 4). In the first quarter of 2020, China’s GDP dropped by 6.8%. It was a tough year in 2019 for international trade, and 2020 has been a year of great uncertainty. There are still some highlights for the PCB industry in the first six months of 2020, especially in the material end where the first-quarter performance of CCL and copper foil was amazing.


Figure 4: IMF world economic outlook (April 2020).

It’s difficult to predict the second half of the year as we do not know to what extent the global economy will decline. Prismark forecasts that the demand for electronic products will decline by 6% in 2020, semiconductor production will decline by 3%, and the PCB market will shrink by 4.9%, with inventory adjustments and demand declining in the third quarter of 2020.


In the post-epidemic era, consumer behaviors will change significantly as home offices become the new way of life, and network requirements have a profound impact on the electronic industry. On the other hand, due to the quarantine, the service industry has been brought to a halt, and rising unemployment has led to declining consumption that won’t recover in the short term. This will also have an impact on our industry. At the same time, the slow recovery in Europe and the United States has increased the uncertainty. The role of China’s future manufacturing industry in the world continues to be a topic worth discussing and considering.


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