Short Term Outlook for PCB Industry & Supply Chain

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

Graph of Global Capacity Utilisation

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.

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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

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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

Graph of Semiconductor Growth Rates

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

Graph of World Semiconductor Growth Rates

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BPA Consulting Ltd
Dorset House, Regent Park
297 Kingston Road
Leatherhead, Surrey
KT22 7PL

Tel: +44 (0)1306 875500
bpa@bpaconsulting.com
www.bpaconsulting.com
Company No.: 3709460

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