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Reasons for the continued transfer of PCB production capacity to the mainland in Europe and America

  • Author:o-leading
  • Source:o-leading.com
  • Release on :2018-10-15


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First,Western countries have tightened their environmental protection policies, and the relatively high-emission PCB industry has been forced to shift. Printed circuit boards contain heavy metal contaminants, which inevitably cause local environmental pollution during the manufacturing process. In Europe and the United States, the government's environmental requirements for PCB manufacturers are higher than domestic. Under strict environmental standards, enterprises need to establish a more complete environmental protection system, which will lead to an increase in corporate environmental protection expenditures, which will increase management costs and thus affect corporate profit levels. Therefore, European and American manufacturers only retain high-tech and confidential PCB business such as military and aerospace, as well as small-volume fast-board business, and continuously reduce the high-pollution and low-margin PCB business. The capacity of this part of the business has shifted to Asia, where environmental protection requirements are relatively loose and environmental protection expenditures are relatively low. Strict environmental policies have also hindered the release of new capacity. PCB manufacturers typically expand their production capacity by expanding their existing plants or new plants. On the one hand, the restrictions on environmental protection clauses have increased the difficulty of site selection; on the other hand, the increase in cost has reduced the expected rate of return of the project, weakened the feasibility of the project and increased the difficulty of fundraising. The speed at which European and American manufacturers invest in new projects is limited by the above two reasons and is lower than that of Asian manufacturers, which in turn releases relatively little new capacity and continues to lag behind the Asian region in PCB production capacity.


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Second, the mainland market gains price advantage at relatively low labor costs, and Western manufacturers tend to be inferior in price wars. The labor cost in the mainland market has a relatively low advantage. Although it has gradually increased in recent years, it is still far below the level of developed countries in Europe and America, and is also lower than the level of Japan and South Korea. With their own advantages in environmental protection and labor costs, mainland manufacturers can gain competitive advantage at a lower price than manufacturers in other regions, thereby expanding market share.

Third, China has become the world's largest consumer electronics market, and the upstream and downstream industry chains are fully equipped with PCB industry demand. In the past ten years, China's electronic information industry has developed rapidly and the scale of the industry has continued to expand. In 2015, China's annual consumer electronics information manufacturing industry achieved a revenue of 11.1 trillion yuan, the highest in the world. PCB is one of the carriers closest to the end product, and the demand in the mainland will continue to grow with the popularity of downstream end products. Correspondingly, the supply end of the mainland has also formed a complete industrial chain of “from copper foil, glass fiber, resin, to copper clad laminate, and finally to PCB”, which can support the growing production demand. Therefore, driven by demand, the industry's production capacity has been smoothly transferred to the mainland.

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