The rising cost of electronic components has become a dominant trend in the PCB market, as these boards serve as essential connectors for various parts. However, amid growing environmental regulations, PCB manufacturers in the Yangtze River Delta and Pearl River Delta regions are encountering new challenges.
From Kunshan in Jiangsu to Zhuhai, Shanghai, and Shenzhen, the PCB industry is entering a new phase following this wave of price increases. Many manufacturers are either relocating or adapting to the changing landscape. Industry insiders report that PCB prices have risen by 20–30% during this period. As a result of environmental restrictions, many older or non-compliant production facilities are being phased out, prompting companies to shift operations inland to provinces like Jiangxi, Hunan, Hubei, and Chongqing.
This relocation is driven by several factors: rising raw material costs, supply-demand imbalances, technological upgrades, tight production capacity, and stricter environmental regulations. These elements collectively contribute to a new pricing model within the PCB industry.
Environmental policies have also played a key role. In December 2017, Kunshan issued an emergency shutdown order affecting 270 companies, sparking significant concern within the industry. Although the directive was later revised, it highlighted the growing pressure on PCB manufacturers to comply with stricter environmental standards. Similar actions followed in Shanghai, Shenzhen, and other regions, leading to increased operational costs due to higher environmental taxes and more rigorous inspections.
PCB factories, which often involve chemical processes like electroplating and etching, are among the most polluting industries. As a result, those without proper environmental certifications face mandatory rectification or potential shutdowns. This trend is expected to spread from East China to South China in the coming years.
In addition to environmental regulations, rising copper foil and glass fiber prices have contributed to the price surge. Copper foil, which makes up about 37% of PCB manufacturing costs, saw a shortage starting in 2016, leading to higher PCB prices. The demand-driven increase in 2017, fueled by large smartphone orders, further exacerbated supply chain pressures.
The rise in mining activities, particularly Bitcoin-related mining, also placed additional strain on PCB production capacity. This led to extended delivery times and panic orders, creating a volatile market environment.
Currently, PCB prices range between 20–30%, with high-end models costing over 20 yuan. While some manufacturers have only raised prices by 10%, others are engaging in aggressive competition, contributing to market instability.
Looking ahead, new production capacities are expected to come online between March and June 2018, potentially easing supply constraints. However, the impact of environmental regulations could lead to the closure of non-compliant factories, resulting in a major reshuffling of the industry.
Industrial migration to inland regions like Jiangxi, Hubei, and Chongqing is becoming a strategic move for PCB manufacturers. These areas offer policy support and lower environmental scrutiny compared to traditional hubs. This shift is not just a relocation but a necessary step toward long-term sustainability.
Experts believe that the Chinese PCB industry is entering a golden age, with increasing global market share and investment opportunities. However, environmental compliance will remain a critical factor. As the industry evolves, only those who adapt to stricter regulations and improve efficiency will survive.
Overall, the PCB market remains highly dynamic, with both challenges and opportunities shaping its future. The next few years will determine which companies can thrive in this rapidly changing environment.
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