PCB Industry Experiences Notable Rebound, Chinese Manufacturers Accelerate Southeast Asia Expansion

In the first half of this year, the printed circuit board (PCB) industry experienced a significant rebound. Among the 41 PCB-listed companies in the A-share market, 26 have disclosed their 2024 interim reports or performance forecasts, with 11 companies achieving year-on-year growth in both revenue and net profit, and another 7 companies forecasting year-on-year increases or turning losses into profits.

Composed of insulating substrates, connecting wires, and soldering pads for assembling and welding electronic components, PCBs serve the dual roles of conductive circuitry and insulating substrates. They function as the supporting structures for electronic components and carriers for their electrical interconnection. As a crucial component in the electronics industry, PCBs can replace complex wiring, enabling electrical connections among various components within a circuit.

Benefiting from the industry's cycle reaching a trough and a moderate recovery in demand, coupled with the upward trend in domestic companies' product mix driven by the high popularity of AI computing power and automotive electronics, the PCB sector has emerged as one of the better-performing sub-sectors in the electronics industry since the beginning of the year. CITIC Securities' research report notes that the PCB sector's performance is expected to continue growing positively in the future. Industry insiders believe that the PCB industry is poised for further recovery in the second half of the year, with the development of artificial intelligence and other fields serving as significant drivers for sustained growth in the PCB industry.

Chinese PCB manufacturers are driving an investment wave in Southeast Asia, particularly in Thailand. At least seven of China's top ten PCB manufacturers have established production facilities in Thailand.

During the first half of 2024, several Chinese PCB manufacturers, including Guangdong Shiyun Circuit, Shenghong Technology, and Guangdong Junya Electronics, set up factories in Southeast Asian countries such as Thailand and Vietnam. Other PCB companies like Sifu Technology, Aohong Electronics, Nanya New Materials, Jiangsu Benchuan Intelligence, and Shengyi Technology have also announced plans to establish regional factories.

Currently, 19 Chinese PCB manufacturers have established production facilities in Thailand, including Shennan Circuits, Hulusi Electronics, and Sunny Flextronics.

As an essential indicator of the development of the IT industry, the overseas expansion of Chinese PCB enterprises signifies a significant shift in China's IT supply chain. By the end of 2025, more than a quarter of Chinese PCB manufacturers are expected to establish production bases in Thailand, Vietnam, and Malaysia, with Thailand being the preferred location.

For Chinese PCB manufacturers facing economic growth and trade pressures, establishing production bases in Thailand and other Southeast Asian countries has become a necessity. In December 2023, India imposed a five-year anti-dumping duty on PCBs exported from China.

Furthermore, major equipment suppliers such as Apple, Dell, and HP have required their contract manufacturers to shift part of their production outside China.

In 2023, the global PCB industry experienced a notable decline, with output value falling by 15% year-on-year to US$69.5 billion, marking the largest decrease in 20 years. Nearly 70% of PCB manufacturers incurred losses during this period.