Global PCB & Laminate Industries Outlook 2017
Most of the developed economies have seen a GDP growth between 1.2 and 2% during 2016 and 2017 is not forecast to show any improvements on these levels. In fact, there is a greater probability that averages will fall slightly. Of the developed leading nations, Japans GDP is set to fall below even this forecasted minimum with GDP growth likely to remain below 1% in 2017.
Commodity prices globally are strengthening and indeed there are price rises in the pipeline for copper – a key material for the electronics industry, of course. This will help to fuel the GDP of economies that rely on natural resources, many of which are emerging economies.
The Conference Board (based in the US) provide projections for the output growth of the world economy. Their figures would signpost Chinese GDP to grow by 3.8% in 2017, down slightly from 3.9% in 2016.
This prognosis is not at odds with the forecasts for the PCB industry which is illustrated in Figures 1 – 4 shown below. It too, reflects a period of muted growth for 2017. However, the charts ( Figures 1 – 4 are in value terms) do not factor in the proposed laminate price increases for 2017 whose levels have been influenced by the proposed rise in copper foil prices.
Figure 1: US PCB INDUSTRY GROWTH RATES 2000-2020
Figure 2: TAIWAN PCB INDUSTRY GROWTH RATES 2000-2020
Figure 3: JAPAN PCB INDUSTRY GROWTH RATES 2000-2020
Figure 4: EUROPEAN PCB INDUSTRY GROWTH RATES 2000-2020
Several copper suppliers have decided to switch part or their entire capacity to the production of Battery Foils for Electrical Cars. (There is a particularly strong demand in China). As a result, there is a shortage of standard foils for the electronics market. This situation is unlikely to change over the next 6 months.
In addition, during the third quarter, a number of companies have been trying to raise their prices as many report unsustainable margins for 2016. With the advent of small feature sizes and quality requirements in many of the end markets going forward, PCB companies are going to have to invest even more in up to date equipment and will need a sufficient margin to re-invest.
This may well be beyond some manufacturers in 2017. Therefore much of the increased demand value in 2017 is likely to come mainly from this potential price increase, rather than any uptick in underlying demand.