Strong enemies arise; Taiwan PCB industry encounters tough challenges

Although as mentioned above, Taiwan PCB industry still need to face strong competitions from other countries, for example, South Korean and Japan put a lot of effort on PCB areas while Mainland China tried hard to catch up. Jiang Bo Feng, the senior industry analyst of ITRI IEK electronics and system research group, components research department mentioned, PCB can be divided into several categories as: IC carrier board, soft board, HDI (High Density Interconnect) board and multi layer rigid board.

Furthermore, Japan and South Korean focus on IC carrier board and soft board, while Mainland China still concentrate on large volume products, like multilayer rigid boards, the most common products.

Jiang has noticed that Japan reached the 4th transition period for PCB application since 2007 in order to compete with Mainland China’s strategy to lower cost via huge quantity. Japan industry had locked areas like medical treatment or innovated applications to pursue higher profit instead of large market share as in ICT area to prevent price competition.

In addtion, Panasonic had announced at 2012 Nov to close lots of smart phone related PCB production lines, only reserved factory in Minami Alps of Yamanashi, Japan to continue automobile and equipment area developments, thus we know the transition is still on-going.

As for South Korean industry, beneficial from the outstanding performance of Korean brands in global market, PCB industry grows significantly. However, Jiang also addressed that although Taiwan PCB production value had reached No.1 worldwide, also with the downside trend of global traditional information communication market, Taiwan industry’s future growth is concerned and that is why another round of transition is a must.

Figure I: Medical and automobile electronics might be the possible option (Source: usa.healthcare.siemens.com).

Smart phone supports PCB developments

All electronic products need PCB for components carrying and PCB varies on specs to fulfill demands from different products. Eli Mahal, the PCB sales vice president of Orbotech expresses, take iPhone as an example, line spacing 40μm had became basic requirements and Samsung already prepared to phase in that spec also. In the near future, iPhone 6 will upgrade to 30μm line spacing per assumption but cost will increase in the initial stage for low yield rate.

Orbotech will release updated solutions correspond with high-end demands this year in advance as well. ITRI IEK data also predict that in 2013 smart phone shipping quantity will officially exceeds the amount of feature phone, also, high-end smart phones will not be the main driver but middle/low class Android will, as in Mainland China or other emerging countries.

Coincidentally, Eli Mahal mentions that 40μm demand is not very obvious currently for the increasing size of cell phones lead to less space concerns on PCB area. However, on the long term, in order to maintain competitiveness of even open the gap with competitors, the updated line spacing spec will be the first target for leading companies. As for mobile industries in Mainland China, like Huawei, ZTE and Lenovo, common line spacing will be chosen for product design and local PCB supplier will be qualified enough.

On the other hand, Eli Mahal predicts that along with the increasing of mobile functions, soft boards and PCB coordinating with main system will be applied to improve system design flexibility as in camera modules. Thus, overall soft board usage on smart phone will increase rapidly.

Line spacing challenge on Flip Chip Substrate exists

Besides, the “IC carrier board” between PCB and chip develops to another level that even Qualcomm as one leading company on application processor applied Flip Chip Substrate in their own product line to shorten the signal transmission distance and improve system performance.

Common Flip Chip Substrate technology divided into FCBGA and FCCSP applied massively on wireless baseband or application processor, the spec demand is a lot stricter than smart phone. Eli Mahal believes that tier one application processor company will lock the spec between 10 to 20μm, while Taiwan industry focus on 30 to 40μm.

Worldwide semiconductor leader Intel set up line width 9μm and line spacing 12μm as current target, but 8μm for both in 2015. In another word, relative equipment industries have to prepare in advance to fulfill the demands coming from indicating companies. However, Eli Maha also confess that any line spacing or width lower than 9μm leads to highly technical difficulties for Taiwan or Japan industries.

Figure II: As the competition becomes more intense, the request turns stricter on line spacing for electronic components and chips itself. (Source: en.wikipedia.org)

Another climax for PCB: Wearing device and automobile electronics

Except for the success on production value and high-end PCB areas, ITRI points out two development options for Taiwan PCB industry: Wearing devices and automobile electronics.

Jiang address that wearing devices own four distinguishing features as wireless, light weight, integration and generic. The application areas include watches, glasses and rings. For the common application in PCB industry now as HDI, flexible material or the Sip and 3D IC in testing stages will be the weapons for market access.

Moreover, wearing device market is in its embryonic stage now, production value in 2014 estimated to be US$6 million only, but probably reaches to US$2.06 million in 2018. Taiwan PCB industry has to seize this chance before too late. As for automobile PCB market, it also shows great potential of growth for the rapid increase on auto electronic systems. ITRI IEK predict that the market size will be 4,540 million US dollars in 2014, prompt arrangement should prepared ahead.

Figure III: Compare with consumer electronics, auto electronics owns higher entry barrier but higher profit exists at the same time (Source: automotiveit.com).

Actually, compare with other areas, there are less innovated applications or extremely high entry barriers in PCB industry. However, as an integral part of electronic industry, system integration cannot fulfill merging different chips without PCB. Furthermore, Taiwan information and communication industry had faced a lot of challenges in the rapid changing market and that leave a lot of obstacles for Taiwan PCB industry to overcome.

One thing is for sure, arrange ahead and technology development are still one of the unchanging laws of technology industry, as well as apply to PCB. We believe Taiwan will still keep its competition advantages in the future.