Short Term Outlook for PCB Industry & Supply Chain
In 2017, our PCB Information Service will be serving the industry for its fortieth year. To produce this outlook we take inputs directly from the supply chain (see figure 1 below).
Figure 1: SUMMARY OF GLOBAL CAPACITY UTILISATION TRENDS Q4 2015
Figure 1 shows the capacity utilisation for PCB and Flex producers by quarter and is one of the Key Performance Indicators (KPI’s) we use alongside Order Book Levels, Pricing, Raw Material Price Changes and a composite Activity Index along with others.
Certainly as far as the outlook for the first half of 2016 is concerned, almost all of the respondents are forecasting an improvement. It is fair to say this outlook is not shared by suppliers to the PCB industry with regards to equipment and consumables. The prognosis here is a flat first half of 2016 and in fact, this is the feeling for 2016 as a whole.
The demand has not been shared evenly on the various market sectors. The following is a summary:
Consumer – Falling levels of demand
Automotive – Healthy demand and a bright spot supported by new applications
High Speed Equipment – Steady demand
Computers – Flat or decline
Medical and Industrial – Steady demand growth
Handsets – Flat
Military – Flat
Aerospace – Steady demand
BPA has analysed the demand trends for semiconductors to see what the prognosis moving forward could be. Looking out to 2016, the SIA predicts modest market growth for 2016.
The following figures (Figures 2 and 3) shows BPA’s analysis of the trends for semiconductors. It should be remembered that these charts show the rate of change of growth. So below the zero is a market contraction and above, is a market expansion. The curve shows a slow-down from the end of 2014 into 2015. Figure 2 below illustrates all four regions, with the black line showing the aggregated world situation.
Figure 2: SEMICONDUCTOR GROWTH RATES 2000 – 2015
Figure 3 on the other hand, is BPA’s forecast. The forecast is suggesting that in 2016, we will see a single figure contraction (in semiconductor value terms) for shipments compared to 2015. With the macro economic factors as they are at the time of writing, the analysis would to conclude that 2016 is going to be a flat year. The less optimistic outcome (supported by the semiconductor forecasts), may well be a contraction of between 3-5% in 2016 compared to 2015.
However, such an outcome will be contingent upon the macro-economic stimuli particularly from China and the US in 2016. Such as of yet unannounced measures, could result in single digit growth for the PCB Laminate and Supply Industry.
The second key point is that the model shows our assumption that the historical demand cycle will be maintained, which forecasts a much stronger period of growth in the later part of 2017.
Figure 3: WORLD SEMICONDUCTOR GROWTH RATES 2000-2019