The global PCB industry's output value is expected to decline in 2023

Affected by factors such as weak demand for traditional consumer electronics like smartphones and PCs, the overall demand for PCBs began to decline in 2022. According to Prismark's report for the first quarter of 2023, the global PCB industry's output value, measured in USD, is expected to decrease by 9.3% year-on-year in 2023, a decline of 5.2 percentage points compared to the forecast from the fourth quarter of the previous year.

In the first quarter of 2023, the overall PCB market declined by 13.1% compared to the fourth quarter of 2022, and dropped by 20.3% compared to the first quarter of 2022. Among them, the total revenue of the top 40 global PCB suppliers in the first quarter of 2023 decreased by 20.4% year-on-year.

According to Prismark's analysis, the global PCB output value is expected to experience significant fluctuations mainly due to intensified pressure from the slowing global macroeconomic growth in 2023. The market demand continues to weaken, and the effects of inventory adjustments across the entire electronic industry supply chain are persisting. Apart from substrate packaging, the projected output value of other PCB industry products is expected to decline by varying degrees ranging from 6% to 9% in 2023.

Furthermore, the global semiconductor market maintained a high level of prosperity throughout 2021. Starting from 2022, the global chip industry's supply-demand relationship gradually moved toward balance. Especially since the latter half of the year, industry demand has consistently declined, leading to a short-term impact on the demand for products in the substrate packaging sector. Taking Taiwan, China as an example, according to publicly available market data, the substrate packaging output value in the Taiwan region decreased by 35.33% year-on-year during the period from January to May in 2023.

As evident, the current industry development is facing challenges. However, in this challenging scenario, downstream sectors are exhibiting significant differentiation, and structural opportunities still exist. In the domain of data centers and servers, as the new generation of server platforms undergoes updates and iterations, coupled with the continuous increase in AI server penetration rates, the demand and prices of high-speed PCB products are expected to rise. In the automotive electronics sector, with the constant increase in the penetration rate of new energy vehicles, the demand for PCBs in the automotive field remains robust, thereby propelling the industry's long-term growth.

In the medium to long term, the PCB industry is expected to maintain a stable growth trajectory. According to Prismark's statistics, the projected compound annual growth rate (CAGR) of the global PCB output value from 2022 to 2027 is 3.8%. Among these, in terms of product structure, high-end products such as substrate packaging, HDI boards, and high-layer count boards with 18 layers or more are expected to sustain relatively higher growth rates, with compound annual growth rates for the next five years at 5.1%, 4.4%, and 4.4% respectively. Geographically, the PCB industries in various regions around the world are all demonstrating robust growth trends.

For substrate packaging products, the long-term growth of the global substrate packaging industry will be driven by the technological advancements and expanded application scenarios in products such as 5G communication, artificial intelligence, cloud computing, autonomous driving, smart wearables, smart homes, and the Internet of Things. These upgrades and expansions in technology and applications will result in a significant increase in demand for chips and advanced packaging within the electronics industry. Consequently, this will propel the substrate packaging industry to maintain a rapid and sustained growth trajectory on a global scale.

For PCB products, markets such as wireless communication, servers and data storage, new energy and intelligent driving, as well as consumer electronics, will remain important long-term growth drivers for the industry. With the emergence of new application scenarios like the Internet of Things (IoT), AI, and smart wearables in the era of 5G, various terminal applications are causing a surge in data traffic. This increase not only boosts the usage of PCBs in downstream electronic products but also drives the direction of PCB development towards high-speed, high-frequency, integration, miniaturization, and lightweight solutions. The demand for mid-to-high-end PCB products like high-layer count, high-frequency high-speed, and HDI boards will continue to experience healthy growth.