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BPA: China's Demand for PCBs, Laminates on the Rise

by: May 07,2014 2080 Views 0 Comments Posted in News

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BPA use growth rates to forecast the near and medium term future prospects of the world's PCB and laminate industry. We track the demand for semiconductors which are in many instances aproximately 25% the value of an electronics assembly. The PCB can be typically 2 to 8% of the cost of the electronics assembly although even higher for some specialist boards such as those used in military and medical applications.

Figure 1 shows the forecasted growth in demand for semiconductors. The cycle is approximately four to four and a half years and this can be seen in Figure 1 notably with significant troughs in 2001, 2005, 2009 and again for 2013/14. Most would not have seen this last trough as a downturn (as is the case for 2005). In these years the industry experienced a slowing in the growth rate rather than a large contraction as in 2001 and 2009. The shape of the cycle influences the growth rates and it can be seen from Figure 1 that the deeper the trough, the higher the peak will be when growth resumes.

Conversely the shallower the trough, the lower the peak. Such a characteristic would be indicative of what would be considered a more stable period than the boom to bust period we have seen between the late 1990s and 2012. It is on that basis we forecast more stable growth out to 2017.

Figure 1: Semiconductor Shipments Historical & Forecast Growth, 12/12

BPA looks at a number of indicators besides semiconductor demand curves. We not unsurprisingly analyse electronics equipment production trends to forecast the demand for PCBs and laminate. Figure 2 below shows this for China and would indicate a potential uptick in China for 2016/17 mainly due to the previously identified cyclical nature of the industry.

Figure 2: China Electronic Equiment Production Forecast

Our latest forecasts PCB and Laminate forecasts would indicate over the period to 2017 a flat U.S. and European mart with a CAAGR of 0.2 and -0.2%, respectively. For China, BPA forecasts a market CAAGR of 5.5% and a production CAAGR of 6.2% resulting in output reaching $33.2 billion by 2017. For laminate demand for China by 2017 we see this reaching an annual demand of 375 million square meters.

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