China today has become a global undefined mainly electronic components market, downstream terminal contract manufacturing also has more layout in mainland China, however, recently Chinese mainland coastal areas management environment and the increasingly harsh conditions, the local electronic components factory in technology and market power catch-up, for the global PCB industry caused a certain degree of pressure of competition; For this purpose, this paper analyzes the current situation and development trend of electronic circuit and related printed circuit board industry in mainland China.
With the cluster of downstream electronic terminal product manufacturing base, the Chinese mainland is undoubtedly the largest production area in the world, with its market share reaching 44.4% in 2013, and it is estimated that it will grow to 45.6% in 2017. The growth effect of PCB industry in South Korea is driven by the brand, and the production line in South Korea is mainly based on the local layout. Therefore, the regional market in South Korea accounted for 14.8% in 2013. It officially surpassed Taiwan’s 13.6 percent to become the world’s second largest production region. The ratio of production between Taiwan and mainland China reduces the proportion of production in Taiwan, but the output value of Taiwan will still grow by about 2% year by year.
In terms of PCB products, there are a large number of medium and low-order single-double, multi-layer products with undefined market demand in mainland China. In 2013, PCB products accounted for more than 60% of the total PCB production in mainland China. The main application areas are: PC, NB, communications, consumer electronics… And so on; HDI and soft board are the second and third largest products, mainly used in mobile devices such as mobile phones; And in IC board part still lag far behind Japan, Taiwan, Korea and so on area.
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In mainland China, the use of multi-layer board is undefined, and the use of consumer electronics is undefined. Secondly, communication products with more HDI and soft board accounted for about 25%.
According to the survey, there are about 2,500 PCB manufacturers in the world, while the number of PCB manufacturers in mainland China alone is over 1,200, accounting for half of the global total.
Based on the above data, it can be seen that the global PCB production in the Chinese mainland has been moving towards the Chinese mainland for value chain and layout, and the PCB output value in the Chinese mainland has ranked the first. However, the downstream application products are mainly concentrated in the middle and low order: including personal computer, NB, consumer electronics, etc., so the proportion of corresponding PCB products is also oriented to the middle and low order products, including traditional multi-layer hardboards are still relatively high compared with other advanced undefined products, and the proportion is over 50%.
Along with the development steps and policies of the Chinese mainland, the PCB industry follows the same steps in its layout, including the pearl river delta development zone in 1994, the elder triangle development zone in 2000, the development zone around the bohai sea in 2005 and the west triangle development zone where the central government started to promote the development of the western region in 2010. Since the establishment of the PCB plant in huizhou by huatong in 1994, the PCB manufacturers in Taiwan have also followed the policy of large-scale development in mainland China. At present, most of them are in south China and east China. Since 2010, Taiwan merchants have started to enter western cities such as chongqing and chengdu.
From the perspective of industry development, however, in the western region in China mainland due to the electronics manufacturing cluster is given priority to with notebook computer, PCB layout of supply chain have been completed, but from the perspective of cost and manpower to moderate relieve the operating pressure of the coastal areas, and considering the equipment and materials to support, in central China has become a important coastal manufacturers a redundant base, such as hubei, hunan, jiangxi and so on.
However, in consideration of market development potential, industrial chain and customer type, the local PCB industry in mainland China will challenge the previous cluster ecological development model of PCB industry in mainland China:
Limited by environmental emissions, production scale and market, it will be difficult to present the high-degree industrial clustering phenomenon of south China and east China in the future inland. On the other hand, coastal production conditions worsening situation still no obvious improvement, but the layout of the inland will have a high market risk, under the above factors being weighed, mainland China domestic PCB industry expansion planning are mostly choose not far from the site/headquarters (within 2 hours drive can reach), which both in jiangxi and anhui become the mainland domestic PCB industry layout is undefined, for producing a redundant, however this phenomenon will lead to the upstream and the support industry in the challenge of customer service.
Topics on the overall business environment of PCB industry in mainland China:
· continuous rise in cost and increased uncertainty in operating environment: industrial environment, requirements of the Chinese government on industrial layout and transformation, long-term trend of RMB appreciation, integration of tax and tax, labor contract law, and requirements on environmental protection; The operating area of the manufacturer continues to increase in enterprise management cost, human resource cost and social responsibility cost.
· huge fluctuations in the international economic environment: the degree of linkage with the international overall economic environment is increasingly high, including the rise of raw materials, exchange rate fluctuations, and pressure of RMB appreciation.
· fierce homogenization competition: the PCB industry in mainland China continues to expand in scale, forming a contention of hundreds of companies. The lack of emerging products has led to more and more homogeneous competition among PCB manufacturers.
· global PCB leadership layout: global PCB leaders such as Europe, the United States, Japan, Korea and Taiwan continue to deploy heavy troops to the Chinese mainland, resulting in the overlapping industrial competitive landscape.
Due to the diversification of consumer electronic products and the shorter life cycle, the products are moving towards less quantity and high customization. Therefore, all PCB factories in mainland China are actively engaged in this field to conduct niche competition. The advantages of one-stop service include: optimize the manufacturing of small and medium batches of PCB, reduce the human cost of customers’ input in PCB design, and make the central batch sample fast production; However, there are some limitations, including the production of medium and small batches in existing companies, but the large volume of production without capacity support must be transferred to other companies, resulting in the production line conversion costs; The number of customers that one-stop service deals with is large, the attributes are diverse and miscellaneous, which makes it difficult for PCB manufacturers to manage, and the application is also locking a small number of diversified applications. Including shennan circuit, xingsen express, jiesai technology, zhuhai founder, zhuhai yuansheng electronic, have actively arranged one-stop express services.
Starting in 2008 led by chongqing computer production base, is an important trend for electronic components, including HP, Dell and other international brand companies are layout in the west, thus drive the contract including hon hai, compal and wistron from coastal areas to move to the west, also indirectly led factory was conducted in the western Taiwan PCB layout, including: he yu baird, jian ding, super, huatong, etc.
Most land merchants have continued to invest in coastal layout, including founder, shantou ultrasound, yuansheng, quanbao, etc., while bomin electronics chose jiangsu dafeng for expansion, and jiangsu nantong and wuxi for establishment. The main considerations of the mainland merchants include whether the market demand can truly support the scale of the factory, problems in the flow and management of inland talents, as well as the overall operating environment including waste water discharge license.
The inland areas, though there is a gap between wages and coastal areas, but still to be strengthened in part personnel quality, and therefore produce management difficulties, for example, in coastal factories a certain period of production line needs to be done 10 human, but inland factory as a production line is needs to be done 15 human, although average wages are lower, but overall together human cost does not compare save; Another key point of the layout of the land business is the customer relationship. The main customers of lui are small and medium sized electronic factories of lui capital soil. Most of these electronic factories are located in south China and east China, and there is no internal migration demand. Therefore, lui PCB plant does not have much incentive to move inland. When it is really about to move, most of the deals are done by means of m&a. For example, the plants of zhuhai founder in chongqing are laid out through m&a, including guangdong shengyi group, rather than re-establishing new production lines in China as other manufacturers generally do.
According to the estimated global intelligent mobile phone market will be more than 1 billion, 2014, including mainland China more than 400 million, accounts for about 40%, thus the Chinese mainland in the intelligent mobile phone market has become a global electronic components manufacturer mohican, undefined future global intelligent mobile phone market growth momentum will come from mainland China, which in addition to international brands including Apple, Samsung, zte, huawei, lenovo will play in the future China local intelligent mobile phone brands such as crucial forces.
As zte, huawei, lenovo and other mainland Chinese brand manufacturers used to have deep and long-term cooperation with lu zi PCB, lu zi PCB will certainly not be spared when the smart phone market rises, or even seek further cooperation through official relations.
Although China has become a global production base of undefined electronic components, in terms of technology and product layout, mainland China’s domestic state-owned factories are still some distance from the world’s leading factories. However, due to long-term efforts in the small and medium sized, local brand market, it has gained a relatively niche market and does not need to participate in the highly competitive global electronic components industry. By means of SWOT analysis, this paper analyzes and summarizes the mainland Chinese mainland electronic component industry.