AI Servers and EVs Drive China's PCB to $26.79B in 2024

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The Taiwan Printed Circuit Association (TPCA) and the Industrial Technology Research Institute (ITRI) recently released the 2024 China PCB Industry Dynamics Report. It reveals that China’s PCB industry accounted for approximately 30.5% of the global market in 2023, with an output value of $22.98 billion, ranking second worldwide. The main product categories were multilayer boards (39.3%), HDI boards (27.8%), and flexible boards (24.2%). By application, communications (28.9%) led the market, followed by automotive (26.9%), computers (23.8%), and consumer electronics (12.1%).

In the first half of 2024, listed Chinese PCB companies showed revenue growth but faced declining profit margins, indicating pressure on profitability. Overall, gross margins dropped by 0.1 percentage points, while net margins slightly increased by 0.4 percentage points compared to the same period last year. Small companies with annual revenue under RMB 1 billion struggled, with gross and net margins falling by 0.8 and 1.8 percentage points, respectively. In contrast, companies focused on networking, servers, and automotive markets performed better in profitability.

Looking ahead to 2024, China’s PCB industry is expected to grow rapidly to $26.79 billion, with a 16.6% annual growth rate, raising its global market share to 32.8%. The rising demand for AI servers and automotive electronics, driven by AI applications and the EV boom, has become a key growth driver.

China remains the world’s largest PCB production base, accounting for 51% of global output in 2023. However, in response to geopolitical changes and the need for supply chain diversification, Chinese PCB manufacturers are accelerating overseas investments. Thailand has emerged as the top destination, benefiting from robust infrastructure, a mature supply chain, and investment incentives. As the world’s ninth-largest automotive manufacturing hub with a strong domestic market, Thailand offers an ideal environment. By the end of 2024, 27 Chinese or Hong Kong-based PCB manufacturers are expected to invest in Thailand, fostering the formation of a red supply chain cluster.

China is also pushing semiconductor self-reliance through the third phase of its National IC Fund, prioritizing AI chips and high-bandwidth memory (HBM). This will further boost the growth of its IC substrate business. In the EV sector, China-produced EVs now account for over 60% of global market share. Policies supporting EV adoption, tax incentives, and mandates for local supply chains are enhancing Chinese PCB makers' competitiveness.

As Chinese PCB companies rise, Taiwan’s manufacturers face similar product portfolios but differ in key clients and end-market positioning. To adapt to the new competitive landscape, Taiwanese companies must enhance technological innovation and product upgrades to strengthen their global competitiveness.