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What has changed in the pcb industry

What has changed in the pcb industry
Judging from the current situation of strict inspections of environmental protection regulations in the domestic PCB market, it is indeed helpful for medium and large-scale PCB manufacturers that comply with environmental protection regulations to take orders and help improve the oversupply of market capacity. However, the premise is that environmental protection inspections are implemented in the mainland. Single effects will not appear quickly in the short term.

The reasons behind the increase in PCB prices, in addition to the increase in market demand, include environmental protection and the price increase of upstream raw materials. A reshuffle of the PCB industry focusing on environmental protection is now unfolding. This is undoubtedly good news for leading companies. At the same time, due to the high PCB requirements in the automotive and 5G communication markets, it will strengthen the benefits of leading companies. Driven by both, The PCB industry reshuffle is accelerated!

1. Supply-side reform and stricter environmental protection: small and medium-sized manufacturers cannot obtain waste control licenses

First, let’s take a look at environmental issues. Not long ago, Shenzhen Marsh, a subsidiary of PCB factory Kingboard Group, announced that it will close the factory before September 30. The reasons announced include the inability to continue production due to environmental protection policy factors.

Although the PCB industry has different interpretations of this matter, the strict implementation of environmental inspections in the Mainland is a fact, and the increase in the cost of sewage and waste disposal for Taiwanese companies is expected to increase as a result.


The PCB industry pointed out the origin of the current mainland sewage discharge problem and the search for a solution, and pointed out that since Taiwan’s PCB plants have entered the Chinese mainland market for many years, the originally approved sewage discharge volume has reached the critical point of the permitted volume. As a result of the expansion of production over the years, the waste water produced by the intermediate process has increased greatly. Therefore, the factories are currently making every effort to improve the recovery of the "reclaimed water" produced by the intermediate process, so as to effectively control the external sewage discharge and comply with the original approved discharge license discharge standard. And emissions. Of course, the increase in water treatment facilities will also increase costs and burdens.

The increase in the price of raw materials is most concerned with the price of copper. The increase in the price of copper has significantly increased the cost of copper foil substrate manufacturers and PCB manufacturers. According to industry statistics, the cost of PCB raw materials accounted for 33%. Among them, the raw material cost of thick copper foil substrates accounted for 18%-20%. In addition, copper foil accounted for 30% of the overall cost of thick copper foil substrates.

In addition, in recent years, the domestic market’s awareness of environmental protection has strengthened. From the emission limit in Kunshan, Jiangsu at the end of 2017, to the emission limit in Zhuhai and Shanghai, and to strict inspections in Shenzhen, based on the sewage discharge problem of the PCB industry, PCB factories at this stage, regardless of Taiwanese investment China, mainland capital, and even foreign capital are unpopular industries in the mainland. For this reason, the PCB industry has to face the pressure of rising costs and the continuous reduction of production capacity, and eventually the pressure to leave.

Therefore, after the PCB industry is under pressure to increase the cost of raw materials, and external environmental issues have caused the problem of limited production capacity, PCB companies in the palace have begun to notify customers of price increases since July. As for the Taiwanese factories, due to unsatisfactory demand, there are still a lot of restrictions on production capacity. In addition, the price increase of copper foil substrate factories in the second quarter of this year is not obvious. For this reason, the industry believes that it is too difficult to follow the price increase at this stage. high.

The reason for the basic price increase is mainly due to the above two. On the one hand, the increase in raw materials, on the other hand, is that the environmental protection department is restricting emissions very severely.

In addition, at the beginning of August, the Shenzhen Municipal Human Settlements Commission issued the "Notice on Not Accepting Applications for Strictly Controlled Waste Treatment Administrative Licensing". The notice stated that in accordance with the Guangdong Provincial People’s Government Order No. 242, the “Guangdong Provincial People’s Government And the Decision to Amend Some Provincial Government Regulations. From July 20, 2017, the “Guangdong Province Strict Control of Waste Treatment Administrative License Implementation Measures” was formally abolished, and the strict control of waste list and strict control of waste treatment administrative licensing matters were formally cancelled. The Shenzhen Municipal Human Settlements Committee will no longer accept applications for strict control of waste disposal permits since the effective date of Guangdong Provincial People's Government Order No. 242.

2. Strong demand for PCB: collective benefit from the industry chain

It is understood that the PCB industry will enter the peak season of market demand in the second half of the year, but the first to see strong in the third quarter is the upstream copper foil, fiberglass cloth and copper foil substrate (CCL) demand, especially the current fiberglass cloth factory still has raw material fiberglass Due to the dilemma of tight yarn supply, the product rally is on the verge; copper foil factories have accelerated their demand for copper foil due to electric vehicle lithium batteries and PCB factories, forming a boom in market demand.

Li Sixian, general manager of Jinju Development of Copper Foil Factory, pointed out that the processing fee of Jinju in the second quarter of this year will remain the same as that of the first quarter, and the third quarter will enter the PCB peak season. With the emergence of market demand, the processing fee will remain stable and beneficial. Push up the third quarter profit.

As for the supply of fiberglass cloth, the fourth quarter of last year has been showing a situation of tight supply of raw fiberglass yarn. This phenomenon has not been improved so far. In the off-season of the second quarter, the price of electronic grade fiberglass cloth is not strong. Rising trend, but including Fuqiao and Dehong are optimistic about the peak season effect of the third quarter, which will push up the demand and drive up prices.

As for PCB full-process plants, the third quarter is the beginning of the peak season, and the fourth quarter is the most prosperous season of the year. Relatively speaking, Apple’s iPhone 8 and iPhone X have changed their SLP designs since last year, including Xin Xing, Huatong and Zhending are all suppliers. They will be produced by Apple in the second year of this year. The yield rate should be greatly improved. The third quarter will help to make a profit. However, due to the consumption of too many intermediate processes for the similar substrates, the production capacity of HDI (High Density Interconnect Board) is squeezed; the legal person is optimistic that Tripod's expansion last year increased by 600,000 square feet per month, which will be enough to take orders for HDI boards.

As for the PCB equipment part, the third quarter was originally the peak season for delivery. After the monthly revenue of AOI equipment factory Mude hit a high for 13 consecutive months, the general manager Chen Fusheng is still optimistic about the prosperity of the third quarter; as for Xunde and Qun In the third quarter of Yi, there was a wave of exchanges to the new factory of Jialianyi Guanyin, a semiconductor and soft board manufacturer, which will significantly improve its performance.