Analysis of the development status of PCB manufacturers
According to the global PCB revenue ranking of the company's registered place statistics, Taiwan, Japan and other PCB companies are in the forefront. In the past 12 years, the number of top 100 PCB companies in the mainland has increased from one to 46, and the market share has increased from less than 1%. In 2017, it ranked 21%, ranking third in the world. In 2017, the growth rate of output value reached 20.40%, ranking first. Mainland PCB companies are showing faster growth rates.
Among the top 10 PCB manufacturers in the world in 2017, there are 3 in Japan, 4 in Taiwan, 1 in the US and 1 in Korea, and domestic companies are not available. In the top 20 rankings, Shennan Circuit ranked in the top 20 rankings, ranking 19th. Dongshan Precision has completed the merger through the acquisition of Mflex, and has also entered the top 20. In the future, mainland PCB manufacturers still have a broader room for improvement.
The market concentration of the PCB industry is relatively low, giving Chinese companies a large room for improvement.
The concentration of competition among PCB manufacturers has been relatively slow. After several rounds of industry cycle screening, the market share of the top 10 PCB manufacturers in the world has increased to 34% in 2017, and has increased by 6 percentage points in 9 years. The market share of the top 10 PCB manufacturers in mainland China increased from 27% in 2009 to 40% in 2017, and 13% in 9 years. Chinese-funded enterprises have only entered the top 10 in China from the original one, and now three have entered the top 10. China's leading PCB companies have a global market share of less than 1%.
Rooted in the strong demand soil of China's own brands, using cost leadership, Chinese PCB companies get the opportunity of “import substitution”
Faced with the current competitive landscape of the PCB industry, Chinese companies have two core competitive advantages, namely “cost advantage” and “customer advantage”, thus further realizing domestic substitution.
1) Cost advantage: lower labor costs and manufacturing costs for Chinese companies.
2) Local customer advantage: The rise of China's own brand customers has driven strong demand for Chinese PCB companies.
In the early days, Chinese PCB companies entered the market with lower costs, gradually developed and accumulated capital, talents, and experience to build their own moat. In the early stage of industrial development, Chinese PCB companies rose with the booming development of China's electronics manufacturing industry, and entered the market with price advantage, and gradually developed and expanded.
By comparing the two leading faucets of Shennan Circuit and Pengding Holdings (Taiwan), the direct materials, labor costs and manufacturing costs of Shennan Circuit Unit products are even smaller when the price of the two terminal products differs by only 4%. Peng Ding Holdings can also verify that Chinese companies have an advantage in cost control. The lower labor costs are mainly due to China's labor cost advantage and Chinese enterprises are relatively more diligent, while the lower manufacturing costs are mainly due to lower depreciation and amortization expenses at the equipment cost end.
This advantage will continue in the future, but as China's labor costs increase, the advantage gap is shrinking. China's PCB companies are rooted in the strong demand for Chinese local brands. With the rise of downstream Chinese brand customers, China's domestic PCB companies will continue to grow.
According to the data of many well-known research institutions in the world, in recent years, in the global electronic products market, China's independent brands have risen all-round, including communications fields such as servers, mobile base stations, consumer electronics such as mobile phones, computers, home appliances, air conditioners, refrigerators, televisions, and Others such as security cameras and various electronic products, Chinese brands are all out of the world.
The rise and development of China's downstream electronic products has driven the process of PCB localization. Chinese brand companies have the need to reduce costs, and there is a demand to train local suppliers to get close to the service. With the increase in global sales and sales of Chinese branded companies, it continues to drive demand for PCB products from upstream Chinese companies, thus stimulating the continued growth momentum of Chinese PCB companies, thus surpassing foreign PCB companies.
China's PCB continues to “capacity expansion” + “R&D investment”, showing “firm determination” to achieve “import substitution”
After decades of development technology accumulation, Chinese PCB companies have been able to compete with leading foreign companies in terms of process capability and product specifications. For example, Shennan Circuit's high-multilayer high-speed backplane is second to none in China. In 2018, it became the first PCB company to release 50Gbps+ high-speed backplanes in China. At the same time, its layout of IC carrier boards also has a good market share. Jingwang Electronics and Chongda Technology can achieve line width/line spacing of 60~75um, laser aperture of 75~100um and mechanical aperture of 0.20~0.28mm in PCB products, which is similar to global leading companies. Dongshan Precision also owns FPC10um through acquisition of MFLX. 20um high precision machining capability. At present, overseas leading companies still have certain advantages in HDI and high-end FPC products, but their technological advantages are gradually narrowing.
At the same time, the capacity building of foreign regional foreign manufacturers is relatively small, and only some enterprises continue to maintain a certain production line upgrade, while Chinese enterprises have significantly faster capacity building than the rest of the world. The top 14 companies in China's listed PCB companies will have a compound growth rate of 17% in the next three years, contributing approximately 6 to 7% of China's overall PCB capacity expansion, while Chinese-funded PCB companies are relatively more active and have greater goals.
In industries where assets are heavily valued and technology continues to advance, the continued investment in equipment and R&D is at the core of greater and stronger, and the market share of mainland PCB companies can be expected to increase.