2-1.China has become the fastest growing region of PCB output value and high-end HDI boards in the world
PCB industry is widely distributed in the world. Developed countries in Europe and America started early, developed and made full use of advanced technology and equipment, so PCB industry has made great progress. Since the end of 1990s, Asia, especially China, with its advantages in labor force, resources, policies, industrial agglomeration and other aspects, has continuously introduced advanced technology and equipment from abroad, becoming the region with the fastest growth in output value of PCB in the world. The PCB industry has gradually presented a new pattern with Asia, especially the China as the manufacturing center.
From the perspective of PCB industry development path, the global PCB industry has experienced three industrial transfer processes in recent years. The first transfer is Europe and America to Japan, the second transfer is Japan to South Korea and Taiwan of China, the third transfer is South Korea and Taiwan of China to the China mainland.
2-2. PCB product structure in China is constantly optimized, and the HDI market has a strong momentum of development
According to public information, in 2020, among many PCB products in China, multi-layer board is the product with the largest output value, accounting for 44.86% of the output value. The market share of HDI boards and flexible board increased rapidly, and the output value accounted for 17.34% and 17.37%, respectively. As the PCB application market develops towards the direction of intelligent, thin and high precision, the proportion of HDI boards, flexible boards and IC substrate with high technical content and high added value in the PCB industry will further increase, and the development of downstream demand will continuously promote the optimization of the PCB market structure and promote its rapid development.
5G infrastructure construction began at a rapid pace in 2019, with China having built more than 100,000 5G base stations by the end of 2019. Smartphones upgrade in the age of 5G, the Internet of things, as well as the ascension of automobile electronic complexity and a series of downstream industry change, make the RF circuit will occupy more space in 5G mobile phone, mobile phone motherboard and other components will be compressed to higher density and more miniaturization complete encapsulation, push the HDI thinner, smaller and more complex. In addition to smartphones, other consumer electronics and Internet of things applications will also drive a rapid increase in the demand for high-order HDI boards and RF boards.
In current trend of the overall consumer electronics is to develop to the direction of high intelligence, lightweight and portable, this trend of development for the PCB products in consumer electronics constantly improve. According to the public data, the largest proportion of PCB products in mobile terminals is HDI board, which accounts for more than 40%. At present, China is vigorously promoting 5G mobile phones, computers and other consumer electronic products, and it can be predicted that high-order HDI products will develop rapidly in the future and continue to increase the proportion. The trend of more integrated, lighter and space-saving components in mobile terminals will further promote the upgrade and development of HDI and RF boards.
2-3.The PCB downstream application market in China is widely distributed, generating a sustained driving force
The development of the downstream industry is the driving force for the growth of PCB industry. At present, the PCB downstream application market in China mainly includes communication, consumer electronics, computers, network equipment, industrial control, medical, automotive electronics, aerospace and other fields. As one of the strongest branches in PCB market, HDI boards has been applied deeply in the downstream market. At present, HDI products are mainly used in mobile phones, notebook computers, automotive electronics and other digital products, among which mobile phones are the most widely used. In recent years, the development momentum of RF board also shows a good trend, high integration and flexibility determine the high applicability of RF board, can be applied to all kinds of products, large and small, the current application is more small consumer electronics products, such as mobile phones, headphones, cameras and other products.
With the formal issuance of 5G commercial licenses, 5G construction has entered a phase of high-speed development, and the future market demand for communication multilayer board and high frequency high-speed board is huge. At the same time, China is vigorously promoting the “Internet plus” development strategy, new technologies and new products keep emerging, cloud computing, big data and other emerging technologies continue to innovate, AI equipment, automatic driving and other new generation of intelligent products continue to develop, which will vigorously stimulate the consumer electronics, automotive electronics and other PCB application market rapid development. The vigorous promotion of 5G mobile phones has also promoted the updating and upgrading of HDI boards and promoted the rapid development of the HDI market.
2-4. PCB regional structure adjustment in China, with a significant trend of coordinated development of multiple regions
Most PCB industries are built around the regions where the downstream industries are concentrated. Such distribution can save transportation costs on the one hand and make effective use of human resources in the downstream industries on the other hand. Domestic PCB industry enterprises are mainly distributed in pearl River Delta, Yangtze River Delta, Bohai Rim and other regions with strong economic advantages, location advantages and talent advantages, showing a cluster development mode. However, in recent years, affected by the rising labor costs, some PCB enterprises have gradually moved their production bases to inland regions, such as Hubei, Hunan, Anhui and Chongqing, in order to relieve the operating pressure brought by the rising labor costs.
In the future, the pearl River Delta, Yangtze River Delta, Bohai Rim and central and western regions may develop together. The common development of multiple regions will fully reduce labor costs, solve the problem of green development to a certain extent, and contribute to the long-term development of PCB industry.
2-5. As the HDI market in China is in short supply, domestic manufacturers welcome development opportunities
Since 2019, the government has strongly supported the construction of 5G base stations, and the number of base stations is larger than that of the 4G era. The massive construction of data centers, 5G and AI will increase the demand for high-end PCBS. Although the automotive sector has suffered a temporary slowdown due to COVID-19 this year, autonomous driving, V2X communication and automotive electronics will rapidly drive up demand for automotive electronic PCBS. In terms of consumer electronics, as the chip integration in 5G phones is higher than that in 4G phones, the ordinary HDI of traditional Android phones will be upgraded to high-end HDI, such as third-order, fourth-order or Any Layer HDI. HDI upgrade superposition of consumer electronics shipments recovery.It will be the driving force for increasing PCBS in consumer electronics. The trend of demand for higher integration, lighter and more space-saving in mobile terminals has promoted the upgrade of HDI on the main board of mobile phones. 5G consumer electronics, communications and automotive electronics have driven the growth of demand for higher-order HDI.
However, the supply growth of domestic high-order HDI market is slow. On the one hand, due to the capital and technical barriers of new entrants, HDI production line needs to purchase a large amount of capital, such as equipment, as well as a long time of technology accumulation, so the entry cost of new manufacturers is high, and the number of manufacturers is difficult to increase significantly in the short term. On the other hand, for existing PCB manufacturers, hierarchical upgrading needs to consume more capacity. For the original production capacity of low-order and low-layer HDI, if the production of high-order and multi-layer HDI is to be produced, the final output will be significantly reduced.
As 5G construction enters the high-speed development stage, the market demand for communication multilayer board and high frequency high-speed board is huge in the future. Although some manufacturers have made investment and production expansion, on the whole, the capacity growth of DOMESTIC HDI still cannot meet the rapidly growing demand. In this case, the domestic high-order HDI market will have imbalance between supply and demand in recent years. Therefore, the existing domestic high-order HDI manufacturers will welcome great development opportunities.
