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 What's happening in the PCB Market...

The printed circuit board (PCB) industry’s supply chain is wide-ranging, covering metals, solder, chemicals, assembly equipment, laminates, and more. It also covers a variety of regions from Asia to North America. According to IPC, a global trade association, rigid PCB shipments are down 23.2 percent and bookings are down 35.5 percent in February 2009 from February 2008. Interestingly though, flexible circuit shipments in February 2009 are up 3.6 percent mostly due to the large digital camera and cell phone market. Many manufacturers increased production in 2005 and 2006 expecting 25% – 30% growth, but as we know now, that didn’t happen.

Average pricing for Printed Circuit Boards (PCBs) is expected to decline until the third quarter of 2009, in concert with declining costs for a key PCB raw material: copper, according to iSuppli Corp. They also noted that weak demand is negatively impacting PCB demand and that PCB pricing trends now are being dictated by copper costs. The price of copper reached a peak level of $4.10 per pound in the second quarter of 2008 and then began to drop, falling to $1.50 per pound in February. This drop, combined with falling pricing for another key raw material, laminate, has helped PCB suppliers to reduce costs. PCB demand is expected to return as a factor driving PCB pricing in the third quarter, with a slight increase in sales helping to boost rates.

Many manufacturers are realizing that there’s never been a better time to look into ways to reduce the costs in new and existing PCB designs. Several key factors radically affect the manufacturing cost of a PCB such as choice of base material and solder mask that might reduce the manufacturing cost by 10%-50%, but the consequence of utilizing lower grade materials might come at the expense of the increasing cost of assembling the resultant PCB, the long term reliability of the finished product and the potential for reduced yield that could actually increase the final real cost of the equipment.

Reducing the complexity of the PCB can make it possible to reduce the overall cost by the greatest amount. This can be achieved by more extensive use of surface mount components that could also reduce the overall board size and number of plated through holes thus saving on material cost. Reducing waste is another big cost saver. Complex shaped boards have large waste areas that can be utilized for smaller boards.

The PCB industry is heavily labor dependant. For this reason, the UK and the USA have seen a steady shift of volume PCB work to the Far East where labor rates are lower and the manufacturing scale is larger. The cost benefits for moving to the Far East can be considerable (20%-50% cheaper for multi-layer work) and the quality levels are generally comparable or in many cases better than high-end UK manufacturers. The scale of PCB manufacture in China, Taiwan and Korea dwarfs the volumes of the competitive European manufacturers and consequently the cumulative buying power of these companies will result in much lower material and chemical expense that would be passed on to end-users as a cost saving.

PCB manufactures require the use of numerous chemical processes and materials, many of which contain chemicals that are potentially harmful to the environment and costly and difficult to dispose of and treat. According to the Sustainable Technologies Initiative (STI), a study is being conducted to recover the valuable tin, copper, and nitric acid so they can be re-used. The goal is to eliminate PCB waste and reduce costs for manufacturers by recycling valuable raw materials. Waste avoidance or reduction may result in increased facility efficiencies as well as significant savings from lowered waste management costs, raw materials costs, reduced insurance and worker safety costs.


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