Does China Plus One Really Make a Difference? (Part 2)

Estimated reading time: 2 minutes

Editor’s note: This is the second of a two-part series. Part one established what China Plus One entails and the driving influences.

In this article, we consider the industrial regions benefiting from investment outside China, and what all this might mean to manufacturers and their customers.

Global PCB Production 2023

According to Prismark, more than half of the world’s $70 billion printed circuit boards were manufactured in China in 2023 (Figure 1). When you add Taiwan-headquartered companies to the huge manufacturing capacities in Mainland China, two-thirds of all PCBs are manufactured in greater China.

In Figure 1, the chart showing “rest of world” (ROW) refers mainly to Southeast Asia (Malaysia, Singapore, Thailand, Vietnam), and others, including India, etc. This graph also clearly shows that the U.S. and Europe manufacture just 7.1% of the world's PCBs. In the U.S., efforts are underway to bring back at least some of the “lost” PCB manufacturing capacities. However, it will take huge capital investments, trained PCB manufacturing engineers, and the goodwill of end users to pay higher prices than can be sourced from China.

For the 27 EU member states, the dependence on Chinese-manufactured PCBs is 65% of the EU’s total requirement—which increases to 75% when PCBs manufactured in Taiwan and Hong Kong are added1. It seems that de-risking makes sense, at least regarding China Plus One.

South Asia Manufacturing Locations
India really doesn’t feature yet as an emerging PCB manufacturer. AT&S is probably the largest manufacturer; most of the others are mostly involved in domestic aerospace and defense PCBs.

Malaysia is best explained using three examples of different approaches:

Austria-headquartered AT&S built a factory mainly to produce high-end IC substrates for high-performance processors. This approximately €1.7 billion plant has been open since the beginning of 2024, with the plan to start delivering high-end integrated circuit (IC) substrates for AMD's data center processors towards the end of 20242.

U.S.-headquartered TTM started volume production in its new facility in April 2024, with production ramping up throughout the year. An investment of $200 million will assist its customers in commercial markets such as networking/telecom, data center computing, medical, industrial, and instrumentation. Phase 2, a 25% capacity increase, is due to commence construction at year-end3.

A third example is China-headquartered Sunshine Circuits. In 2023, it acquired the long-established Malaysian PCB manufacturer Vision Industries, and there has been huge capacity and technology expansion in 20244.

The Main Focus for New PCB Factories on Thailand
Thailand was not known in the past as a PCB manufacturing country. For many years, the only Thai PCB shop known outside of Thailand was KCE, which also manufactures its own laminate.

This has changed in the past few years, as Thailand has become a major car manufacturer in the ASEAN region. For example, BYD, one of the largest EV manufacturers in the world, opened its first factory in Thailand in July 2024.

Continue reading this article in the December 2024 issue of PCB007 Magazine.

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