The PCB industry, known as the "mother of electronics", is suffering its third downward inflection point in more than 30 years of rapid growth.
"The first half of the year was very depressed, particularly in the second quarter, with orders across the PCB sector falling an average of 30 per cent."Xin guosheng, President of the shenzhen circuit board trade association, told reporters on July 20 that if the situation does not improve in the second half of the year, some enterprises will inevitably stop production and close down.
Printed Circuit Board (PCB) is the basic component that supports and connects Circuit components in electronic equipment.In 2011, the total output value of the global PCB industry was $55.409 billion, of which about 40% of the production capacity was in mainland China.
XinGuoSheng said the PCB industry is closely related to the macro economic environment, in the past 30 years, China's PCB industry to maintain the 25% average annual growth, only in the IT bubble burst in 2002, the global financial crisis in 2009 two serious decline, "worries about the year 2012 to now, the whole industry will not be a third trough"?
"It used to be almost a shortage of workers, but now we don't have to worry about hiring, and workers don't have to work overtime. In order to cope with the decline in orders, many PCB factories have changed two shifts into one."With the exception of high-end HDI boards and soft boards, most PCB companies had a tough second quarter, Mr. Singhong said.
China's PCB industry surpassed Japan in 2006 to become the world's largest producer.Although it accounts for about 40% of the global industry scale, China's PCB industry still lags behind Japan, Taiwan, South Korea, the United States and Europe in terms of overall technology level.In terms of product structure, 80% of the output value comes from multi-layer boards, most of which are medium and low-end products below 8 layers. However, high-end HDI and soft boards have a certain scale, but their technical content is far from the international advanced level, while few domestic enterprises can produce IC boards with the highest technical content.
Xu huan, President of bomin electronics co., LTD., said that with the trend of "light, thin, short and small" in electronic products such as smart phones and tablet computers, high-end PCB products such as HDI and soft board will not only be larger in size, but also have much higher gross margins than mid and low-end products.Now, Mr. Xu said, 'two ends of the board are moistening (the lowest end of the single-layer board is out because most manufacturers are out, and the days are good), and the pressure is on the middle,' but most Chinese companies are caught in the middle.
"The apples are good."Mr. Hsin said that apple's iPhone and iPad sales are still growing fast, giving suppliers decent gross margins, while other PCB vendors will either face a drop in sales as demand for their lower end products wanes or a drop in profit.
'in 2012, the PCB industry suffered a contraction in demand in both domestic and foreign markets,' Mr. Shin said.First of all, overseas markets are not only affected by the European debt crisis, many governments have reduced subsidies for energy-saving products. Meanwhile, Japan and the United States also face the problem of insufficient consumption.Second, in terms of the domestic market, the capacity stimulated by the last round of 4 trillion yuan investment and the household appliances going to the countryside has made the market relatively saturated with excess capacity, and the current stimulus power has been exhausted.
In fact, the reporter has seen many PCB enterprises seeking to transfer the advertisement on the PCB industry vertical website, PCB net city.
From the results of the first quarter of 2012 of several PCB listed companies in China, tianjin plin (002134.sz) had a revenue of 97.21 million yuan, down by 23.29% year-on-year, and its net profit was -4.67 million yuan, down by 1985.6% year-on-year.Both the revenue and net profit of Shanghai electric power company (002463.SZ) declined, with revenue of 695 million yuan, down 7.53 percent, and net profit of 65.25 million yuan, down 4.9 percent.Hsingsen technology (002436.sz) saw its net profit fall 2.65 per cent to 27.88 million yuan despite a 17.35 per cent rise in revenue to 230 million yuan in the quarter.
The logic of a declining order queue to go public
"It used to be 25 per cent average growth, but now some businesses are down as much as 30 per cent, and the contrast is really scary."'the second quarter of this year was comparable to 2009, after the global financial crisis,' Mr. Shin said. 'it was just a steep decline, and the signs of this downturn started in the second half of last year.'
Still, Mr. Shin believes June could be the trough.His reasoning: China, Europe and the United States have all recently adopted a "coordinated" monetary policy of quantitative easing to jointly cope with a global economic slowdown. "I believe that monetary policy will be transmitted to the real economy in the fourth quarter of this year, bringing the industry out of the doldrums," he said.
XinGuoSheng said China PCB industry after more than 30 years of rapid growth, has the stronger ability to resist risks, especially the domestic private enterprise vitality is very strong, such as the current by adjust the production line of two class as a group, can deal with orders fell in the crisis, there is no large-scale production, collapse phenomenon, also didn't see a panic situation.But he stressed that the decline in the fourth quarter of this year has not been reversed, and that bankruptcy, consolidation, mergers and acquisitions are likely to follow.
"There will be problems if some capital chains are tight, or if capacity expands aggressively, or if PCB enterprises fail in industrial chain partners.""Said xin.
XinGuoSheng said that in addition to the demand of shrinking orders, PCB enterprise is really affected by the fierce competition in the industry in recent years, stricter environmental regulation, the RMB exchange rate and rising labor costs, to the Midwest transfer capacity, and a series of challenges, "we feel more and more, the PCB industry intensive development towards the capital, technology, talent, such as the production of high-end products of HDI board, only one device investment is up to more than 200 ten thousand yuan".
In this case, in recent years, domestic PCB industry set off a wave of IPO.According to the reporter, chongda, zhengye, rongda, guanghua technology and other securities regulators in the early this year have submitted listing materials, pre-disclosure.
"More than a dozen companies, including bomin, are working hard to prepare for the reform."Xin guosheng told reporters that as a batch of private PCB enterprises in China have been listed in stock market to obtain financing, they will provide complete supporting facilities for downstream electronic equipment manufacturers such as zte, huawei, kangjia, skyworth, haier and hisense.After forming a more complete industrial chain with China's local electronic information industry and household appliances industry, the future prospect of China's PCB industry will be more worthy of expectation.