EIPC Technical Snapshot: Factors Driving the Fluctuating Demand for PCBs

Estimated reading time: 5 minutes

EIPC continued its series of online Technical Snapshots with a webinar on Nov. 21 presented by Dr. Hayao Nakahara of N.T. Information Ltd, who summarised world PCB production and shared his vision of the market over the next five years. With information gathered from many sources, Nakahara examined factors driving the increasing demand for printed circuit boards. 

Eagerly awaited and extremely well attended by the executives and strategists of the European industry, the webinar was introduced and moderated by EIPC Technical Director Tarja Rapala-Virtanen.

Nakahara began by commenting upon the difficulties in making proper comparisons of PCB output data using U.S. dollars as the measure because of exchange-rate variations and different degrees of devaluation of the principal Asian currencies—Japanese Yen, Chinese Yuan, New Taiwan Dollars and South Korean Won—against the U.S. dollar.

Against a background of these complications, his overall growth assessment for 2024, based on the first nine months, was about 6%—from $90.1 billion in 2023 to $95.7 billion, with even greater growth expected for 2025. 

He was careful to explain that the figures for China, which had fallen from nearly $57 billion in 2022 to $54 billion in 2023, related to all circuit boards produced in China, of which only about 60% were manufactured by Chinese national companies. 

The industry in Thailand is growing strongly and he believes that its output will reach $10 billion in the next six to seven years, giving Thailand a world ranking of number 2 or 3. Vietnam is also becoming a significant contender.

The world’s top 30 PCB makers experienced a hard year in 2023; Nakahara described it as “disastrous,” with all but a few showing negative growth, some more than 25%, and particularly those whose principal business was in IC substrates. 

Comparing his own figures for 2023 with those prepared by Prismark, Nakahara commented upon the large difference in the totals for world PCB output $90 billion vs. Prismark’s $69.5 billion. He explained that the variance resulted from the assessment of China’s output, where his own data included bare boards plus the value of boards assembled by the PCB manufacturer. His estimate for the value of packaging substrates is considerably larger than Prismark’s.

He estimated that world has about 2,250 PCB manufacturers, of which about 1,500 PCB are in China. However, there were only 134 makers with annual output more than $100 million and their combined output amounted to $85 billion in 2022 and $78 billion in 2023. The output of manufacturers ranking 135 to 170 totalled about $8 billion. The remaining 2,100 manufacturers accounted for the rest of his $90 billion. There was no clear information about the number of PCB manufacturers in Russia.

Regarding forecasts of PCB value by application, although mobile phones currently took the largest share at $13 billion by Prismark’s figures, the biggest growth area is in AI servers, with a projected increase of 11% by 2028.  

Nakahara looked to semiconductor revenues as a point of reference for his rule-of-thumb: Over several years he observed that in order to provide the interconnect to make a semiconductor functional, each dollar’s-worth of semiconductor would need between 15 and 16 cents-worth of PCBs. In line with Gartner’s forecast that semiconductor revenue for 2024 would be $630 billion, this relationship gave a figure of between $95 billion and $100 billion for the 2024 PCB market, qualifying his own projection.   

He presented data for products that he described as “the locomotive for the global PCB industry in macro view” since they absorbed 75% of all PCBs made globally. These included PCs, tablets, wearables, smartphones and automotive, although he remarked that such products probably had little relevance to European PCB manufacturers.  

His summary of worldwide PC shipments comparing 2024 with 2023 indicated practically no growth for motherboards and CPUs. But AI PCs were the driving force of future PC shipment growth, with Gartner forecasting an increase from 43,000 units in 2024 to 114,000 units in 2025, with AI PCs becoming the mainstream within three years. 

Worldwide tablet shipments are expected to follow the PC trend, and the growth in wearable devices could be slightly better than PCs and tablets.

“Lukewarm” was his term describing the growth in smartphone shipments although, as with PCs, the main growth would be in GenAI smartphones. 

There will be steady growth in automotive electronics as vehicles became increasingly complex. The increasing sophistication of ADAS functions is driving the requirement for HDI PCBs, and battery management systems create a growing demand for flexible and flex-rigid circuits.

Nakahara recounted the story of a friend faced with a repair bill of $4,000 to replace a front bumper damaged in a minor shunt.

Worldwide, 94 million cars were made in 2023, and 93 million cars were sold. China was by far the biggest producer and also the biggest market, followed by the United States and India. Germany was the sixth biggest producer and the fifth biggest market. Toyota led the league table in units shipped, and BYD and Tesla were the fastest-growing. The world total’s revenue for automotive PCBs in 2023 was $9.4 billion, and the top three manufacturers were all Japanese companies. 

Sales of electric vehicles continued to grow, with China accounting for almost 65% of units sold worldwide. During a recent visit to Shenzen, Nakahara observed that charging stations outnumbered gas stations. He showed a graph indicating that “new-energy” vehicle sales accounted for more than 50% of total vehicle sales in China in July 2024. 

In that same month Germany suffered a hiccup, with battery car registrations slumping by 37% year-on-year following changes in government subsidies. German automotive manufacturers were suffering and some factories were being closed. It was hoped that these problems would be temporary but, although manufacturers of automotive PCBs for Chinese EVs were trading profitably, those supplying non-Chinese makers had problems. 

He concluded with concern over the strongly linked fields of global semiconductor revenue and IC substrate. His information was that semiconductor revenue would reach $1.2 trillion by 2030, and he forecast that the value of IC substrate production would be $18.5 billion in 2024 and $22.2 billion in 2025. 

But where will these substrates be made? His figures for 2022 to 2023 growth were significantly negative overall, with a world total of -17.1%, and the biggest negatives were Japan and Taiwan, with -18.9% and -21.1% respectively. He left us to ponder upon his question.

Nakahara has been the leading analyst of the global printed circuit board market for three decades and his presentation delivered a wealth of information and insight to an appreciative webinar audience. Having spent 59 years in PCBs, he commented that he didn’t know anyone still alive that had worked longer in the industry. It was nice to see him again at the electronica show in Munich earlier this month, still doing the rounds, talking to people, and gathering information. 

Thank you, Naka and EIPC, for giving us an opportunity to share a bit of his knowledge.