The effect of the us tax increase on the PCB industry

- Aug 04, 2018-

The us tax bill consists of two sets of tax bills.

The first list was cut from the list of recommendations released in April, while the second list is related to made-in-china 2025, adding to the list.

The proposed list consists of 1,333 lines and 818 lines. The corresponding item will be subject to an additional 25% tariff on July 6, 2018.

The pcb-related parts of the tariff list are as follows:

1. Directly mentioned 5 products of PCB, including printed circuit boards and ceramic substrate for color TV sets;

2, referred to the use of printed circuit products directly to the end product list, a total of 28 products focused on the ATM, telecommunications equipment, transformers, static converter and inductors, color TV, TV camera, radar, radio navigation, connector components, the flight data recorder, radio broadcast equipment, flat panel display, electrocardiograph, electrocardiogram machine such as consumer, industrial, medical, and other products;

3. There are 38 products indirectly related to PCB (no guarantee of complete statistics), mainly including monitors and projectors;

4. Directly mention a total of 5 items related to pcb-related equipment;

5. There are 42 kinds of equipment indirectly related to PCB manufacturing (no guarantee statistics are completely included). The equipment is mainly machine tool, drilling machine, numerical control and other products.


In addition, some items are related to PCA (i.e., PCBA and SMT). As the PCA industry is located between PCB and terminal products, the performance of enterprises such as PCB and passive components will be affected in theory.

But we communicate with industry, the medical equipment, voltage regulator, and test equipment in areas such as PCA, mainly small factory doing basic didn't do this kind of order of listed companies (unit price is high, but the volume is small, the industry known as high mix small volumn) - even if the final tax increases by 25%, this kind of orders by comparison is not sensitive, eventually smaller influence on PCB, PCA related listed companies.

In our opinion, as the basic component of the global electronics industry, circuit board is the closest link to the electronic terminal and has a solid foundation position in the global electronics industry. Therefore, at present, countries around the world basically do not impose tariffs on PCB imports.

We believe that the us has imposed "punitive tariffs" this time, and that the final impact of components such as PCB is extremely limited.

The mainland has become the main production base of circuit boards worldwide. The latest data in 17 years shows that 50.5% of the circuit boards are produced in mainland China.

In addition to the rapid growth of the mainland's output value, technology and customers have also been followed by the development of the first, gradually exceeding.

At present, domestic - funded circuit boards have been exported to countries around the world, the world is obviously dependent on domestic circuit boards.

According to the tariff list, the direct tax on PCB products is mainly focused on consumer electronics, industrial control and medical products.

In addition, according to customs data, China's total PCB exports in 2017 were usd 13.96 billion, accounting for 46.1% of China's total value of usd 30.3 billion. That is to say, nearly 5 PCB products produced in China were exported.

We have contacted relevant companies in the industry and the export codes to the us are not affected (8529.90.05, 8529.90.06, 8529.90.33, 8529.90.46, 8529.90.89, etc.).

Some companies are highly qualified, the impact of the north American market is lower than expected, and trade war fears are unnecessarily amplified.

Appendix I: North America PCB consumption structure (NT Information)

For example, jingwang electronics, shenghong technology, chongda technology, etc., it is recommended to pay attention to the investment opportunities after the correction.