Taiwan PCB Industry Adopts Cautious CapEx Strategy, Eyes AI and Southeast Asia for Growth

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Driven by the stabilization of the global electronics market and the strong demand for AI applications, although the Taiwan printed circuit (PCB) industry is facing a trend of capital expenditure convergence for three consecutive years, its output value and operating performance continue to rise, indicating that the industry is shifting from high investment to high added value development, and the industrial structure is undergoing a steady transformation.

According to the first survey of the capital expenditure trend of the Taiwan PCB industry released by the Taiwan Printed Circuit Association (TPCA) and the Industrial Technology Research Institute's International Institute of Industrial Science, at the end of 2022, affected by geopolitics and the shortage of ABF substrates, PCB manufacturers expanded their factories in the south at the end of the epidemic, causing the capital expenditure of that year to reach a historical peak of NT$128.2 billion. With the gradual implementation of investment plans and the increasing risk of uncertainty in the international situation, the capital expenditure of Taiwan's PCB industry is expected to drop to NT$81 billion in 2025, and the investment focus will be more obvious. Focus on the expansion of high-end production lines related to AI servers and the layout of new production capacity in Southeast Asia, reflecting that manufacturers are becoming more cautious about economic changes and more precise in resource allocation.

Looking back over the past few years, Taiwan's PCB industry has expanded production massively due to the shortage of ABF substrates. Capital expenditure hit a record high in 2022, and successfully drove the annual revenue to a peak. However, since 2023, weak global terminal demand and inventory adjustment pressure have emerged, forcing manufacturers to adjust their investment strategies and turn to emerging locations such as Southeast Asia to cope with geopolitical risks and tariff pressures. Despite conservative capital expenditures, Taiwan's PCB industry continues to perform well. In the first quarter of 2025, Taiwan's PCB industry continued its growth momentum from the previous quarter, with the continued expansion of terminal AI technology applications, high-performance computing and server upgrade needs. The total output value at home and abroad reached NT$205.4 billion, an annual growth rate of 13.2%, showing a strong high growth trend. Among them, the computer application category grew particularly strongly, with an annual increase of 29.7%, mainly because AI servers and AI PCs drove a surge in demand for high-end HDI and multilayer boards.

From the perspective of PCB products, benefiting from AI applications, the output value of multilayer boards reached NT$72.1 billion, with an annual growth rate of 17.6%; followed by HDI, which was driven by high-end applications such as AI servers and satellite communications, with an output value of NT$42.4 billion, an annual growth rate of 16.1%; the output value of carrier boards was NT$27.9 billion, an annual increase of 13.7%, and continued to grow for four consecutive seasons; the output value of flexible boards was NT$46.8 billion, an annual increase of 7.9% due to the recovery of demand for mobile phones and PCs. The only decline was in the rigid-flexible board, with an output value of NT$2.5 billion, a year-on-year decrease of 6.6%, affected by the slowdown in sales of high-end mobile phones, which also suppressed the order performance of related lens modules.

Although the global economy is still affected by the expectations of the US "Trump 2.0" tariff policy, exchange rate fluctuations and rising operating costs in the short term, Taiwan's PCB industry has gradually formed a regional layout structure of "Taiwan high-end manufacturing, mass production in mainland China, and expansion in Southeast Asia", which has the comprehensive effect of momentum continuation and risk diversification under the AI-driven growth wave. Although short-term capital expenditures are cautious and conservative, supported by high-end applications such as AI servers, high-speed computing platforms, satellite communications and memory applications, overall output value and added value are still expected to rise steadily. It is expected that moderate growth will be maintained in the second quarter. Taiwan's PCB industry is continuing to strengthen its supply chain resilience and global competitiveness, paving the way for growth in the second half of the year.