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To address the multiple risks arising from the intertwining of geopolitics, sustainable transformation, and the AI wave, the Taiwan Printed Circuit Association (TPCA) established the Sustainability and Risk Governance Committee. This committee brings together academic experts and industry representatives to regularly discuss issues such as the international situation, supply chain dynamics, and operational resilience, serving as a platform for risk observation and exchange within Taiwan's PCB industry. In March of this year, the committee released the "Taiwan PCB Industry Risk Governance Strategy," outlining a governance framework for the industry to cope with long-term changes, focusing on four key areas: "high-end low-carbon, digital transformation, global resilience, and talent development." A further meeting was held to review and exchange information on recent risk issues.
The TPCA points out that Taiwan's PCB industry is benefiting from the AI boom and demand growth driven by advanced packaging. It is estimated that the domestic and international output value of Taiwanese PCB manufacturers will increase by 15.1% year-on-year this year, reaching NT$1,053.2 billion, continuing its double-digit growth performance. However, the industry also faces multiple challenges. The committee urges the industry to seize the current prosperity while proactively strengthening risk management, adopting a disciplined approach of "saving for future opportunities" to steadily prepare for the next stage of development.
I. Escalating geopolitical risks and external uncertainties have become the norm for operations.
The committee stated that, based on recent international developments, geopolitics is the primary factor at play. While the US-Iran conflict has not directly impacted Taiwan's PCB production, energy, raw material, and logistics prices have already begun to rise, with some materials facing potential shortages. Furthermore, rebuilding energy infrastructure is a long-term process, and even if the conflict subsides, high energy prices and disruptions to shipping and delivery are likely to continue. External uncertainty has become the norm for operations.
II. Net zero and resource bottlenecks intertwine; industrial upgrading relies on policy coordination.
Regarding sustainable transformation, while existing PCB manufacturers can improve their overall carbon emissions in the short term through equipment replacement and process improvements after the implementation of carbon fees, the large-scale expansion of AI manufacturing and the investment in high-end energy-saving specifications for new plants mean that self-driven carbon reduction will face a bottleneck in the medium to long term. As companies increasingly rely on green electricity to meet international supply chain demands such as RE100, they also face pressure from insufficient green electricity supply and rising prices. In terms of the production environment, the simultaneous expansion of the AI and semiconductor industries has increased the pressure to recruit engineers and cross-disciplinary talent. Expansion in Taiwan is also limited by land, water, and electricity conditions. Without talent and infrastructure support, the speed of industrial upgrading will be directly affected. The committee calls on the government to address the weaknesses in industrial development and strengthen policy measures, working hand in hand with industries to "remain rooted in Taiwan," as structural issues such as energy, talent, and land cannot be solved by individual companies.
III. Compliance requirements have been comprehensively upgraded, with equal emphasis on labor, intellectual property, and export controls.
Compliance risks were another issue of great concern to the committee. The issue of forced labor audits in the global supply chain has received high attention from international customers. Companies at both domestic and international locations must address requirements regarding working hours, working conditions, migrant worker recruitment, and zero intermediary fees in advance. In addition, international supply chains continue to raise standards for human rights due diligence, and relevant legislation in Taiwan and internationally is also advancing in tandem. Companies need to respond to the dual requirements of customers and regulations with a more systematic governance approach.
In terms of intellectual property rights, the US Special Section 301 investigation continues to exert pressure, and the use of unauthorized software at overseas locations may also pose compliance risks. In addition, high-end or special application PCB manufacturers must pay attention to US export regulations such as ITAR (International Trade in Arms Regulations) and EAR (Export Administration Regulations) and strengthen the management of end users, uses, and product flow.
IV. New Opportunities and Challenges Brought by the AI Wave: Simultaneous Upgrading of Industrial K-Shaped Structure and AI Governance
AI was the topic the committee focused on most deeply. AI is currently in a period of rapid growth, with hardware supply falling short of demand. This boom is also reshaping the resource allocation of the electronics supply chain: the demand for computing power is driving overall growth in high-end PCBs, equipment, and materials, but it is also causing production capacity to concentrate on AI products. Non-AI products are facing pressure from weak demand, capacity constraints, and inflationary costs, resulting in a K-shaped industry development pattern. The committee reminds companies that while seizing AI opportunities, they must carefully assess their product mix and customer concentration, and anticipate the depreciation and financial pressures that may arise when demand cools. They should strengthen their financial resilience and investment discipline while the economy is performing well.
AI is not only changing industrial structures but also bringing new governance challenges to enterprises. If employees' daily use of generative AI tools lacks clear guidelines, sensitive information may be uploaded to external models, leading to the unwitting leakage of trade secrets. Enterprises should establish clear AI usage guidelines and ensure their implementation through education, training, and auditing mechanisms. Regarding external threats, enterprises must also pay attention to new attack methods such as "steal first, then decrypt" and assess the impact of future quantum computing on current encryption technologies. The committee emphasizes that AI adoption should not only focus on efficiency improvements but also require the simultaneous establishment of supporting mechanisms such as data governance and cybersecurity protection to prevent new tools from becoming new operational weaknesses.
From reactive response to proactive governance, laying the foundation for the long-term competitiveness of the PCB industry.
The core of this committee's discussion is that companies should shift from "passively responding to risks" to "proactively building governance capabilities." In the short term, this can begin with assessing risks such as raw material supply, green energy shortages, forced labor, and export controls. In the medium to long term, the focus can be on AI governance, cybersecurity resilience, financial discipline, and talent transformation to gradually build resilience for the next cycle.
In the face of the rapidly changing new landscape, the TPCA Sustainability and Risk Governance Committee will continue to serve as an industry risk observation and exchange platform, compiling first-hand observations from academic experts and member companies to help the industry identify risks early, seize opportunities steadily, and consolidate the long-term competitiveness of Taiwan's PCB industry in the global electronics supply chain.
