China could become world's largest producer of PCBs in 2024: Report

Taipei, Nov. 20 (CNA) China could surpass Taiwan to become the world's largest producer of printed circuit boards (PCBs) in 2024, according to a recent report by industry experts.

A study on PCB industry trends conducted by the Taiwan Printed Circuit Association (TPCA) and the Industrial Technology Research Institute projects that China's PCB output value could reach US$26.79 billion in 2024.

This would represent a 16.6 percent year-on-year increase, giving China a 32.8 percent share of the global market and securing its position as the world's leading PCB producer, the report said.

A PCB is a flat board that electrically connects and supports electronic components using conductive tracks, pads and other features.

Taiwan Institute of Economic Research senior analyst Chiu Shih-fang (邱昰芳) said high production levels tend to operate on large scales and influence the market. This connection is why Chinese industries seek to grow revenues and operations, she said.

According to Chiu, Taiwanese producers prioritize profitability, whereas Chinese companies are more inclined to align with their government's policies.

Because of Chinese government subsidies, producers there can engage in price-cutting, allowing them to scale up production and increase market share -- helping them achieve the government's goal of "domestic replacement"-- reducing reliance on imports by promoting domestic products.

Chiu said that to achieve this, producers may invest more funds into developing high-end products to replace components previously purchased from overseas.

The Chinese government may also require a certain percentage of components used in car production to be locally sourced, she added.

Apple began relying on China's supply chain after it invested heavily in high-density interconnector (HDI) PCBs and flexible printed circuits, which reduced the demand for similar products from Taiwan.

Fortunately, Chiu noted, many Taiwanese suppliers have shifted their focus from mobile phone applications to areas including artificial intelligence (AI) servers, low-Earth orbit satellites, and automotive HDIs.

Meanwhile, Chiu said that Taiwan, Japan and South Korea traditionally led the way in producing integrated circuit (IC) substrates -- an essential component in semiconductor manufacturing.

However, China has been excelling in recent years as part of its push for semiconductor independence, Chiu said, adding that while it still has a long way until it surpasses Taiwan, China could become increasingly competitive.

TPCA pointed out that as part of its efforts to achieve semiconductor independence, China has initiated the third phase of its China Integrated Circuit Industry Investment Fund project, focusing investments on AI chips and high-bandwidth memory.

China also has a market share of more than 60 percent in the electric vehicle domain. In addition to subsidies and tax exemptions, car manufacturers also are required to mainly rely on local supply chains, which will also raise China's market share in PCBs, the TCPA said.