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![](https://iconnect007.com/application/files/6316/3125/2012/Dom_Numakura-300.jpg)
New Champ of the PCB Industry
The global PCB industry continues to grow as business shifts from Western countries to Far Eastern countries. Japan was the leader in the industry for a number of years in terms of output value, but business continues to move to Taiwan. This business trend began a few years ago and helped Taiwan transition into a major player in the industry.
The Taiwan Printed Circuit Association (TPCA) has not released the 2013 manufacturers’ ranking for Taiwan, but I am sure the top spot will go to a newcomer this year. In 2012, Unimicron was ranked number one by producing an assortment of high-end products including IC substrates and rigid-flex. Revenue for Unimicron in 2013 declined by 10% compared with the previous year due to lackluster sales of personal computers. That leaves the door wide open for Zhen Ding Technology (ZDT) to grab the top spot. The company increased revenue in 2013 by more than 18% compared to the previous year. Annual revenue for 2013 could reachNT $65 billion (roughly US $2 billion). Not only will the company grab the Taiwanese title, but also the worldwide championship with this type of performance.
Zhen Ding Technology (ZDT) is not a well known company. It was founded in 2006 and formed to compliment a strategic manufacturing subsidiary of Hon Hai Precision, an EMS giant in Taiwan that supplies printed circuits for smart phones and tablet PCs. Its primary customer is Apple, so the major products manufactured are flex circuits. Prior to the formation of ZDT, Hon Hai purchased huge amount of flex circuits from Taiwanese and Japanese manufacturers. The demand was so high that ZDT built five large plants in China. Early on ZDT had growing pains due to low quality and low process yields. The company worked out the problems and improved quickly. Unsubstantiated data suggests the company hired over 100 Japanese engineers to support improvement projects. Currently, ZDT has extra capacities and now supplies circuits to other assembly companies.
ZDT became a publicly-traded company in December 2011. It made a huge splash in the industry by increasing monthly revenue so much that it caused the entire PCB industry in Taiwan to increase by more than 10%. In October 2012, ZDT shocked the industry again by switching their primary revenue producing category from general printed circuits to flexible circuits. And it worked. ZDT’s revenue was more than the total for all other manufacturers. This doubled the size of the flex circuit industry. For this reason, I expect ZDT will wear the crown as the new world champion of the global industry in 2013.
The short term business plan for ZDT is a success. Its aggressive and strategic business plan elevated it to the number-one position of the industry in just seven years. However, it is a marathon and not a sprint. Share holders have a short memory span and are interested in “what have you done for me lately.” Next year will be a pivotal on for ZDT. Let's see if they have any more surprises up their sleeves.
Dominique K. Numakura, dnumakura@dknresearch.com
DKN Research, www.dknresearchllc.com
*To view past issues of the newsletter, click here.
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