The rising cost of electronic components is becoming a dominant trend in the market, and PCBs, which serve as the backbone for component connections, are also experiencing price hikes. However, along with the "green wave" of environmental protection policies, PCB manufacturers in the Yangtze River Delta and Pearl River Delta regions are now facing new challenges.
From Kunshan in Jiangsu Province to Zhuhai, Shanghai, and Shenzhen, the PCB industry is entering a new phase following this round of price increases, with many manufacturers either relocating or adjusting their strategies. The "wind" of change has started to spread across these regions.
According to a report by Micro-Grid, the current price increase for PCBs is between 20% and 30%. In response to the limited number of PCB factories in the Yangtze River Delta and Pearl River Delta, many companies are accelerating their expansion into inland areas such as Jiangxi, Hunan, Hubei, and Chongqing. This regional shift is leading to the gradual elimination of outdated or non-compliant production capacities.
For the emerging market in the PCB industry, it appears that the recent price surge is a result of multiple factors, including rising raw material costs, supply-demand imbalances, technological upgrades, tight production capacity, and stricter environmental regulations. This represents a new model of price increases driven by industry disruptions.
Kunshan's emission restrictions have spread to Shanghai and Shenzhen, increasing operating costs for PCB plants due to higher environmental taxes. On December 24, 2017, Kunshan issued an emergency notice requiring all 270 local companies to halt production entirely. The news caused significant concern in the industry, especially among Taiwanese manufacturers. Two days later, the city announced that the shutdown was not fully implemented and instead introduced a restricted emissions schedule.
Industry sources revealed that Kunshan did not enforce a full shutdown but instead required companies to rectify their operations. This decision came after consultations between the Kunshan Taiwanese Businessmen Association and the municipal government. A complete shutdown could have led to the collapse of many companies in the industrial chain, along with potential job losses. Approximately half of the affected companies were Taiwanese, and PCB factories were particularly hard hit due to their high pollution levels.
Liu Sheng, General Manager of Shenzhen Qianhai Xinsi Road Science & Technology Co., Ltd., explained that improving environmental standards for PCB manufacturers is an inevitable industry trend. Current environmental regulations classify PCB manufacturers into "green card" and "blue card" categories, both of which represent high environmental standards. Those without these certifications will be investigated and must undergo rectification.
Liu added that the focus on environmental compliance in East China is just the beginning, and similar changes are expected in South China soon. While PCB manufacturers may not be able to comply immediately, doing so suddenly would have a major impact on the entire industry chain.
Zhuhai followed Kunshan’s lead with its own emission restrictions, and Shanghai began reorganizing its PCB sector, eventually spreading to Shenzhen. On January 5, 2018, Shanghai released a list of key polluters, conducting investigations into water, air, soil, and noise pollution. Since early 2018, major industrial parks in Shenzhen Bao’an have been inspected, with some areas cutting off power and water to force production halts.
Shenzhen Circuit Board Industry Association confirmed that PCB manufacturers in Bao’an have been investigated and ordered to rectify if they don’t meet standards. PCB factories are known for heavy pollution due to processes like electroplating, etching, and developing, which use various chemicals.
In addition to emission restrictions, the introduction of the Environmental Protection Tax in 2018 has increased operational costs for PCB manufacturers. Wastewater and waste gas discharge fees have risen by 3–5 times, further pressuring the industry.
The price increase can be traced back to 2016, when rising copper foil prices played a key role. Copper foil accounts for about 37% of PCB manufacturing costs. Supply shortages intensified in late 2016, pushing up PCB prices. The demand-driven price rise in 2017 was fueled by increased orders from smartphone manufacturers.
Large orders can cause problems, as low-end PCBs may be shifted to smaller manufacturers, who then pass them to even lower-tier factories. This creates a ripple effect, increasing costs outside the main factories. With limited production capacity, delivery cycles have extended, causing panic orders.
Additionally, the mining boom in 2017, driven by Bitcoin, consumed a large portion of PCB production capacity, further tightening the market.
Currently, PCB prices have risen by 20–30%, with multiple rounds of adjustments. Prices vary depending on the type of phone, with high-end models costing more than 20 yuan per board. Despite this, the overall increase is seen as reasonable in the industry.
With tighter production capacity in late 2017, delivery cycles reached up to 90 days, causing chaos in the market. Many terminal manufacturers cut orders in early 2018, leading to uncertainty in the supply chain.
New PCB production capacity is expected to come online between March and June 2018, which could significantly impact the market. If Kunshan’s production isn’t halted, PCB prices may start to decline after March, but the combination of environmental policies and overcapacity could lead to the closure of unprofitable companies.
Behind the industrial migration, domestic PCB companies are poised for growth. As environmental regulations tighten and raw material costs rise, small and medium-sized PCB manufacturers may be eliminated or acquired, leading to greater market concentration.
This year, PCB manufacturers are shifting their expansion efforts to central regions like Jiangxi, Hubei, and Chongqing, where governments offer policy support. This marks a shift in the industry’s development path.
Industry experts believe that the global PCB market is expected to grow to $70 billion in the coming years, with Chinese manufacturers gaining more market share. The next few years are seen as a golden period for the domestic PCB industry.
While challenges remain, the opportunities outweigh the risks. With increased investment and competition, the industry will continue to evolve, with mergers and acquisitions becoming more common. Only those with strong capabilities will survive and thrive.
Environmental protection remains a key consideration for new PCB factories in inland areas. Companies must ensure compliance to avoid future issues. Industrial migration is not just relocation, but a step toward sustainable development.
Overall, the PCB industry is undergoing significant changes, with 2018 set to bring more transformations. The future of the industry depends on how well companies adapt to these shifts.
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