Fineline UK MD, Clive Wall, writes about factors affecting the PCB market
It is no great secret that the PCB market has been turbulent for some time now, with prices changing almost daily. Driven by a very real shortage of copper, due to the global growth of several key markets, it is impacting the PCB supply chain in ways we have not previously experienced and there is currently no end in sight to this instability.
The markets draining copper reserves include the electronic vehicle market, which is forecast to grow by 36% annually until 2030, placing a massive strain on the demand for lithium batteries. Global smartphone ownership is expected to grow from 60% to 79% by 2025. Green energy accounts for 13% of the world’s energy supply and it is expected to increase to more than 30%. The telecoms market and the expansion of 5G networks will see an increase in HDI technology printed circuit boards. These markets all consume huge quantities of copper adding pressure to an already stressed copper marke.
Additionally, copper foil used in PCBs is treated and prepared to exacting standards, to enable fine tracks and complex features. Many copper producers prefer to sell to the energy and lithium battery markets where the treatment of copper is not so demanding. Copper foil is currently increasing in cost at a higher rate than copper as a commodity.
A Copper foil capacity is increasing but this won’t happen overnight. At present two copper foil plants are being expanded, one for completion Q4 2021 and the other is scheduled for 2023. However, this will still not be enough to bridge the gap between supply and demand.
PCB Market Overview
The PCB market is changing as 2021 unfolds. The pricing wars of the past, along with production efficiency gains have driven down costs year on year. Now we are seeing the opposite: Lead-times are extending, and global PCB prices are rising rapidly as the market re-sets. Whilst costs may subside when the markets stabilise, it might be that they never return to the level we have enjoyed in recent years.
Supply chain and logistics are another area causing market instability. Both sea and air freight are areas of concern. Whilst air freight demand has returned to pre-pandemic levels, capacity is significantly down due to the reduced number of passenger flights. This is also elevating prices and is expected to continue until passenger flights increase in the future.
Sea freight is in equally high demand due to a post pandemic lockdown rebound, leading to a shortage of containers and routes Asia/USA routes being more profitable than Asia/Europe routes. And of course, Brexit caused additional congestion and delays through UK ports.
Clearly suppliers that control every aspect of the PCB supply chain are best placed to manage the challenges. And as 2021 progresses, organisations that benefit from strong, close partnerships with those PCB suppliers will be best placed to navigate any further upheaval.