China is becoming one of the most important manufacturing regions for electronic products in the world. The main manufacturing hubs are Zhujiang Delta, Yangtze Delta and the Beijing region. As a result of WTO membership (2001) Chinese companies have begun to join the world markets.
The product mix of the Chinese PCB industry is gradually moving from low-end technology products to the higher-end. This transition has been supported by the arrival of some of the world’s best PCB producers along with the emergence of a home grown Chinese PCB industry. As a result, China will eventually become one of the largest manufacturing and R&D centers for the PCB industry in the world. Following the growth in popularity of digital products, the annual growth rate for flexible PCBs in China has reached 69.99% and is becoming another hot focus of the PCB market.
Industry Profile
PCB industry companies (fabricators and suppliers) with sales of less than 5 million CNY (Yuan) comprise 40.25% of the total number of companies. Those with 50 million to 500 million CNY occupy 8.24% of the total, leaving the mega-large companies of over 500 million CNY representing 2.98%, of the total number of companies. The medium sized companies from 5 million to 50 million occupy largest piece of the market at 48.53%. Among those companies, with less than 50 million CNY sales revenue, 45.63% of them are PCB companies, 31.22% are raw material suppliers, 18.75% are special equipment companies and the rest represent about 4.40% of the total. Among the companies in the 50 to 500 million grouping, 63.54% of them are PCB companies, 25.96% are raw material suppliers, 4.85% are specialty equipment companies, and 5.92% represent the rest. Among those over 500 million, 78.18% of them are PCB companies and 21.82% are raw material suppliers.
Regional Distribution
The regional distribution of the Chinese PCB industry has the shape like an inverted gourd. 52.96% of PCB industry companies are in South China, 35.68% in East China and 11.36% scattered around the rest of the country; 40.82% of raw material companies are located in South china, 39.75% in East China and 19.43% make up the rest; 47.32% of special equipment companies are in South China, 39.58% in East China and 13.10% for the rest. 46.62% of large companies are located in Zhujiang Delta, 43.78% in Yangzi Delta and 9.60% complete the list.
Challenges Facing the Chinese PCB industry
The Chinese PCB industry still lags behind in technology, investment, management and R&D, across the board. High performance and high quality products, as well as green materials, are only in the research and trial productions phases.
Furthermore, there is a big gap between world-leading technologies and ours in China such as, embedded passive PCBs and ink-jet printed circuits. In addition, China is particularly lacking expert technologies to do the research needed to develop world-class technologies. Compared with PCB manufacturers from the USA, Japan, Korea and Europe, Chinese PCB companies still have a long way to go to produce multilayer HDI boards or multilayer flexible boards, rigid-flex boards, and special material PCBs, as well. At present, flexible PCBs represent about 15% of the global PCB market while manufacturing of HDI in the US is now in a mature phase, with 60% of it as Multilayer, Flexible PCB, or HDI boards.
At the WECC meeting in 1998, Frankfurt, Germany, experts pointed out that the PCB industry should incorporate much of the packaging industry, from raw materials, special equipment, SMT and EMS in the future. We have noted that, currently, developed countries are on the phase of synchronized improvement of entire R&D process and are closely integrating PCB with SMT and EMS in the E-business services, while we are still playing a single game.
The synchronized development of both specialty equipment and raw materials is an important guarantee of the sustainable development of the industry in Japan and the US.
China’s specialty equipment suppliers failed to follow the rapid development of the Chinese PCB industry, especially the large high precision equipment such as laser drilling machines, vacuum presses, high capacity hydraulic punching and machines for printers and inspecting equipment. Moreover, there is no worldwide recognized trademark in China, not to mention a world famous brand.
The PCB industry is developing at a high rate in China, but the lack of management experience stands out as a result of the substantially expanding market size, rapid technology changes and the ever-changing market along with an increasing number of employees.
Nowadays, globalization is both challenging and a great hope for Chinese companies. They will eventually own the success and opportunities once having overcome the hurdles on the way to globalization.
With further reform and market-opening policies, more and more foreign manufacturers are investing in China. We will take this opportunity to reduce the gap and improve ourselves to gain success for the Chinese PCB industry.
The Goal
It is estimated that from 2006 to 2010, the production value of Chinese PCBs and CCL will become the largest in the world and will produce world’s leading technology boards.
Summary/Forecast
The Chinese PCB industry will surpass Japan’s in 2007 or 2008 and become the world's leading player with over 25% of the total global production.
By 2010, China will catch up with the world's leading PCB technologies while maintaining its position as the world’s PCB industry volume leader.
Currently, many of our leading Chinese companies have been founded by young people with advanced degrees and, now, lots of business experience. This new generation of executives will work themselves to the top of the Chinese or even world’s electronics circuits industry. Many PCB and CCL brands will come forward in China and gain an international reputation. In respect of specialized equipment in China, some joint ventures will become nationally or internationally famous companies.
The “green” CCL will soon be the main force of CCL in China, while the specialty laminate materials are already meeting the domestic demand.
Led by the CPCA, the combined development of new technology, products, equipment and manufacturing techniques from companies, research and academic institutes will effectively drive the technology in the Chinese PCB industry.
With intensified competition, the Chinese PCB industry will restructure and adjust. Some small and medium sized companies (90% in the Chinese PCB industry) will be facing another round losses and have to suspend operations.
CPCA will closely cooperate with IPC, JPCA and WECC and frame several proper and applicable standards that will achieve international recognition.
From 2006 to 2010, the PCB and CCL industries in China will resemble the IT industry, becoming a world leading industry and the world center for both R&D and manufacturing.
