Current Situation and Trend of PCB Industry in Chinese Mainland
At present, Chinese Mainland has become the most important electronic component market in the world, and most downstream terminal OEM manufacturing has also been deployed in Chinese Mainland. However, recently, the operating environment and conditions in coastal areas of Chinese Mainland have become increasingly harsh, and the mainland funded electronic component factories are catching up with the technology and market strength, which has caused a certain degree of competitive pressure on the global printed circuit board industry; To this end, this paper analyzes the current situation and development trend of electronic circuit and related printed circuit board industry in Chinese Mainland.
Chinese Mainland continues to take the lead in the global PCB production base
Under the cluster of downstream electronic terminal product manufacturing bases, Chinese Mainland will undoubtedly continue to be the world's largest production region, accounting for 44.4% of the market in 2013, and is estimated to grow to 45.6% in 2017; In South Korea, the brand drives the growth of PCB industry, and the production line in South Korea is mainly local layout, so the regional cities in South Korea accounted for 14.8% in 2013; It officially surpassed 13.6% of Taiwan and became the second largest production region in the world. The production proportion of Taiwan businessmen across the Taiwan Straits will be reduced due to the expansion of production capacity in western Chinese Mainland, but the output value of Taiwan will still maintain an annual growth of about 2%.
Figure 1 Scale of PCB production value in major regions of the world
In terms of PCB products, Chinese Mainland produces the middle and low level single and double sided and multi-layer board products with the largest market demand, accounting for more than 60% of the overall PCB production in Chinese Mainland in 2013, mainly targeting the application fields such as PC, NB, communication, consumer electronics, etc; HDI and softboard are the second and third largest products, mainly used in mobile devices such as mobile phones; The IC carrier plate still lags far behind Japan, Taiwan, South Korea and other regions.
In Chinese Mainland, the application products of multilayer boards are widely used, with consumer electronics as the largest application accounting for about 30%; The second is the communication products with more HDI and soft boards, accounting for about 25%.
According to the survey, there are about 2500 PCB manufacturers in the world at present, while the number of PCB manufacturers in Chinese Mainland alone exceeds 1200, accounting for half of the world.
It can be seen from the above data that at this stage, as Chinese Mainland is the main production base of global electronic products, the global PCB production has moved and deployed towards the Chinese Mainland in the value chain, forming that the output value of PCB in Chinese Mainland has ranked first in all; However, the downstream application products are more concentrated on middle and low level products, including personal computers, NB, consumer electronics, etc. Therefore, the proportion of corresponding PCB products is also concentrated towards middle and low level products, including traditional multilayer hardboards, which are still relatively high compared with other advanced countries, and more than 50%.
Continuous Changes of PCB Industrial Environment in Chinese Mainland
Following the pace of development and policy promotion in Chinese Mainland, the PCB industry follows the same pace of layout, including the Pearl River Delta Development Zone in 1994, the Yangtze River Delta Development Zone in 2000, the Bohai Rim Development Zone in 2005, and the West Triangle Development Zone where the central government began to promote the development of the great west in 2010; Since 1994, when Huatong set up a PCB factory in Huizhou, Taiwan's PCB manufacturers have also followed the development policy in Chinese Mainland. At present, they are mainly concentrated in South China and East China. Since 2010, Taiwan businessmen have also entered Chongqing, Chengdu and other western cities.
However, from the perspective of industrial development, as the electronic manufacturing cluster in western Chinese Mainland is dominated by notebook computers, the PCB supply chain has been completed in succession. However, from the perspective of cost and manpower, to properly relieve the operating pressure in coastal areas, and considering the support of equipment and materials, central China has become an important backup base for coastal manufacturers, such as Hubei, Hunan, Jiangxi, etc.
Figure 2 PCB Industry Mobility in Chinese Mainland
However, in consideration of market development potential, industrial chain, customer type, etc., the local PCB industry in Chinese Mainland will challenge the cluster ecological development model of Chinese Mainland's PCB industry development in the past:
Limited by environmental emissions, production scale, market, etc., it is difficult to show the high degree of industrial clustering in South China and East China in the future in the inland; On the other hand, the deterioration of coastal production conditions has not been significantly improved, but there will be a high market risk in inland distribution. Considering the above factors, most of the local PCB manufacturers in Chinese Mainland choose to expand their production planning not far from the original site/headquarters (within 2 hours' drive), and Jiangxi and Anhui are the first choice for many mainland local PCB manufacturers to layout, so as to facilitate production backup, However, this phenomenon will cause challenges for upstream and support industries in customer service.
Comprehensively summarize the overall business environment issues of Chinese Mainland PCB industry at this stage:
·The cost continues to rise, and the uncertainty of the business environment increases: in the aspect of industrial environment, the Chinese government's requirements for industrial layout and transformation, the long-term appreciation trend of the RMB, the combination of two taxes, the labor contract law, and environmental protection governance requirements; In the aspect of manufacturer's business, the cost of enterprise management, human resources and social responsibility continued to increase.
·The international economic environment fluctuates greatly: it is increasingly linked with the overall international economic environment, including the rise of raw materials, exchange rate fluctuations, and the pressure of RMB appreciation.
·Intensive homogenization competition: Chinese Mainland's PCB industry continues to expand in scale, forming a hundred schools of thought to contend. Driven by the lack of emerging products, the homogenization competition situation of PCB manufacturers is becoming more and more obvious.
·The layout of global PCB leading factories: Europe, the United States, Japan, South Korea, Taiwan and other global PCB leading factories continue to deploy heavy forces in the Chinese Mainland, and the overlapping of industrial competition leads to close combat.
Land merchants actively invest in one-stop service
Due to the diversification and shorter life cycle of consumer electronic products, the products tend to be less and more customized. Therefore, PCB manufacturers in mainland China are actively engaged in this field to conduct niche competition; One stop service has the following advantages: it can optimize the manufacturing of small and medium batches of PCB, reduce the labor cost of PCB design invested by customers, and is suitable for rapid production of batch samples in the center; However, there are also limitations, including small and medium batch production in existing companies, but large batch production without capacity support must be transferred to other companies, resulting in the cost of production line conversion; One stop service processing has a large number of customers, diverse and miscellaneous attributes, which makes it difficult for PCB manufacturers to manage, and applications are also locked in a small number of diverse applications; Including Shennan Circuit, Xingsen Express, Jiesai Technology, Zhuhai Founder, Zhuhai Yuansheng Electronics, etc., have actively arranged one-stop Allegro services.
Figure 3 - Chinese Mainland Land funded PCB Factory Actively Layout One stop Allegro Service
Mainland businessmen are very conservative about inland investment
Since 2008, the computer production base led by Chongqing has moved inward, which is an important trend for electronic parts and components, including HP, Dell and other international brand manufacturers who have deployed in the west. As a result, it has driven the generation plants including Hon Hai, Compal, Wistron, etc. to move from coastal areas to the west, and indirectly led Taiwan PCB plants to deploy in the west, including Hanyu Bode, Jianding, Zhichao, Huatong, etc.
Through interviews, most of the mainland businessmen continued to invest in coastal layout, including Founder, Shantou Ultrasound, Yuansheng, Quanbao, etc., while Bomin Electronics selected Jiangsu Dafeng for production expansion, and Shennan Circuit also selected Jiangsu Nantong and Wuxi for plant establishment. The main considerations of the mainland businessmen include whether the market demand can really support the scale of the factory, the mobility and management of inland talents also have their own problems, and the overall business environment, including wastewater discharge license, still has room.
At present, although there is a gap between inland areas and coastal areas in terms of wages, the quality of personnel still needs to be strengthened, which also leads to management difficulties. For example, 10 people are required to complete a certain section of production line in coastal factories, but 15 people are required to complete the same section of production line in inland factories. Although the average wage per person is low, the overall human cost will not be relatively saved; Another key point of the inland merchants not going inland is the customer relationship; The customers of the land funded PCB factories are mainly concentrated in the land funded local small and medium-sized electronic factories, and most of these electronic factories are located in South China and East China, so there is no need to move in, so there is no incentive for the land funded PCB factories to move inland. However, when it is really necessary to move, it is mostly achieved through mergers and acquisitions. For example, Zhuhai's factory in Chongqing is arranged through mergers and acquisitions, as is the case with Guangdong Shengyi Group, rather than re establishing new production lines inland as other manufacturers generally do.
Figure 4 - Layout Thinking of Chinese Mainland Land funded PCB Factory Expansion
The rise of domestic demand smart action market creates an excellent development environment for land merchants
It is estimated that the global smart phone market in 2014 will exceed 1 billion, including more than 400 million in Chinese Mainland, accounting for about 40% of the world. It can be seen that Chinese Mainland has become a competitive place for global electronic component manufacturers in the smart phone market. In the future, the largest growth momentum of the global smart phone market will come from Chinese Mainland. In addition to international brands including Apple, Samsung, ZTE, Huawei Lenovo and others will play a key role in the future smart phone brands in Chinese Mainland.
As ZTE, Huawei, Lenovo and other local brand manufacturers in Chinese Mainland have had deep and long-term cooperation with mainland PCB manufacturers in the past, mainland PCB manufacturers will certainly not miss the opportunity of the rise of this wave of smart phone market, and even seek further cooperation through official relations.
Although Chinese Mainland has become the world's largest production base of electronic components, in terms of technology and product layout, there is still a distance between local mainland Chinese funded factories and major global leading factories; However, due to long-term cultivation in small and medium-sized, local brand markets, it has also achieved a more niche market, and does not need to participate in the high competition in the global electronic component industry. Through the SWOT perspective, analyze and integrate the local electronic component industry of mainland Chinese Mainland.
Figure 5 - Analysis of the Electronic Components Industry in Chinese Mainland