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The Laminate Market: What Will the Future Bring?

PCBs have been manufactured more or less the same way since we entered the industry in 1972, but the circumstances surrounding the boards have changed. The PCB Norsemen have addressed the copper situation several times in our columns as well as the component crisis affecting the PCB industry. Now, we’re experiencing external factors—such as Brexit and the trade restrictions between China and the U.S.—that are affecting the industry and causing delays due to raw material demand and prioritization by huge market players. The PCB market in China is experiencing a slower growth pace since the beginning of the year. Many factors have affected it, including the U.S.-China trade war and its increased tariff and the expectation of a big ramp-up from the automotive or electric vehicle (EV) industry, which did not happen this year.

Take a Step Back and Look at the Figures

We read and hear about factories moving out of China in view of the China and U.S. trade war.

There had been some increase in capacity in neighboring countries in South East Asia. However, in the next 3–5 years, China will probably continue to be the largest PCB manufacturing country, as the overall network of the supply chain for the PCB ecosystem had been built and improved over the last decades will not be gone overnight.

Let's move back one step and take a look at the PCB laminate supplies. There had been significant growth in the global laminate value between 2015 and 2016 from US$24.3 billion to $25.8 billion. However, from 2016–2018, the growth had been unsubstantial with $26.2 billion and $26.5 billion in 2017 and 2018. It has been estimated that 2019 will close at about $26.7 billion.

This year, we cannot ignore the impact of the change in strategy of major players toward the supply chain. The U.S. trade restrictions imposed on Huawei Technologies, one of the world’s leading networking and telecommunication manufacturers from China, have drastically affected Huawei’s access to U.S. technologies, which includes raw materials. The U.S. trade restriction and warning to its allied countries have forced Huawei’s products to face project bans, business contract restrictions, security scrutiny, and even pushback in some countries. Huawei continues to make changes to its strategy to continue doing business.

To read this column, which appeared in the October 2019 issue of PCB007 Magazine, click here.