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The year 2014 was a bumper year for most PCB companies, with the total output value of the entire PCB industry reaching $12.5 billion, up by 10.5% from the previous year. This year, the prices of bulk commodities, particularly copper prices, plummeted—greatly reducing the raw material costs for PCB companies and thereby helping raise their profitability. This, according to a report titled "Global and China FPCB Industry Report, 2014-2015" by market analyst Research In China.
However, one factor greatly affecting the industry is the currency exchange. In 2014, the euro, the NTD (New Taiwan Dollar) and the yen significantly devalued, while the South Korean won appreciated—which not only hit a serious blow to the competitiveness of South Korean FPCB enterprises, but slashed the profits of South Korean PCB enterprises. Revenues and profit margins of all South Korean PCB companies declined; for example, Flexcom's sales slumped by more than 50%, and the giant Interflex's revenue dropped 33% and its operating margin was -14.2%--this reflects the power of the currency war, according to the report.
Benefiting from the currency depreciation, Taiwanese and European companies, meanwhile, witnessed soaring profit margins. Although more than half of Japanese companies did not benefit from the depreciation of the yen because they set up production bases overseas, they still fared better than their South Korean counterparts.
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Nolan Johnson, I-Connect007
The big news in the industry this week was the new bill introduced to the U.S. Congress in support of the PCB manufacturing industry. The Supporting American Printed Circuit Boards Act of 2022, which was introduced by Reps. Anna Eshoo (D-CA) and Blake Moore (R-UT), incentivizes “purchases of domestically produced PCBs as well as industry investments in factories, equipment, workforce training, and research and development.” The bill is a PCB-oriented complement to the semiconductor-oriented CHIPS Act of 2021.
I-Connect007 Editorial Team
There’s been a lot of talk among PCB manufacturers about the need to upskill their workforce. But where do you start—do you set up your own program or send staff to third-party training centers? We asked David Hernandez, IPC vice president of education, to weigh in on this topic, and the criteria that goes into creating IPC training programs. In addition to upskilling strategies, David also delves into the need for our industry to develop a labor pipeline, as well as the challenges we face in hiring, training, and retaining employees in this industry during a tight labor market.
Nolan Johnson, I-Connect007
It certainly seems that our times continue to be interesting, don’t they? Just how many different flavors of supply chain disruption can we come up with? Investment on the supply side needs to increase, but the size of the labor force needs to increase even more, if we want to accomplish the task of the buildout itself, let alone running the facilities properly.