China’s pcb market
10 May 2007
China’s PCB market is the most talked about on a global level. Gordon Wong examines the market and some of the challenges it faces.
In 2003, China’s pcb output was US$6 billion, increasing by 2004 to US$8.15 billion and by 2005 to US$10.83 billion, close to Japan’s output. In 2006, China became the biggest pcb manufacturing centre in the world, with output of US$12.8 billion. During 2007, China’s pcb industry is projected to grow 9%, and similar growth trends are expected to continue to the year 2010 and beyond.
In terms of market sectors, China’s growth in pcbs is being driving by increased demand for digital consumer products, notebook and desktop computers, telecommunications and the demands from the rapidly expanding domestic automotive segment.
Challenges facing China’s pcb industry
China’s indigenous pcb technology research and development infrastructure is still relatively weak, and there is a need to upgrade product quality and technology, and place more emphasis on multilayer boards, HDI, multi-layer flex and rigid-flex boards, boards with special materials, and HDI high grade backplanes.
As a country, China historically has spent about 1.5% of its GDP on R&D, compared to 2.7% for the U.S. However, the near-term goal for the Chinese government is to boost that percentage to 2% of GDP by 2010 and 2.5% by 2020, and indeed according to a Dec 2006 report by the Organisation for Economic Co-operation and Development (OECD), China has for the first time spent more on R&D than Japan and so has become the world’s second highest investor in R&D after the US. China’s spending on R&D as a percentage of GDP more than doubled from 0.6% of GDP in 1995 to just over 1.2% in 2004, and it is growing even faster than the economy which is growing by between 9 and 10% a year.
As industrial demand continues to grow, there is a need in China’s pcb industry to strengthen and improve overall capacity in the supply infrastructure. China’s pcb industry needs to be able to produce everything from simple pcbs to complex electronic circuit components, including assembly of electronic components and electronic manufacturing services (EMS) development, and it is only through increased investment that this will take place.
Significant news from the region
According to the Taipei Times, Intel Corp’s first new computer-chip factory to be constructed in 15 years will be located in Dalian, China, representing an investment of US$2.5 billion.
China currently assembles around 50% of the world's personal computers, and this is a major factor in Intel’s decision to invest here. Construction will begin later this year and the factory will start production of computer chipsets in the first half of 2010, according to Intel chief executive officer Paul Otellini. The plant would boost Santa Clara, California-based Intel's investments in China to almost $4 billion. Other major chipmaker companies building factories in China include STMicroelectronics NV, Taiwan Semiconductor Manufacturing Co and South Korea's Hynix Semiconductor Inc.
Author: Dr Gordon Wong, Media Director, Techworks Asia Ltd
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