Since the beginning of the year, China has been vigorously implementing environmental protection regulations, and two things have caught the eye. Firstly, if the normal production of the Taiwanese PCB industry will be affected; secondly, if the mainland small and medium-sized PCB factories will find it so unbearable that they will have to shut down, resulting in a slow-down of the PCB industry on both sides of the strait.

 

Viewing from the current situation of strict inspections regarding environmental protection regulations in the mainland China market, it will only help the "law-abiding" large and medium-sized Taiwanese PCB industry operators take orders and improve the oversupply of production capacity in the market if the implementation of environmental inspections in the mainland is thoroughly carried out. Besides, the effect of the order transfer will not appear quickly in the short term.

 

The strict implementation of the mainland's environmental protection regulations has caused Topfaith of Shenzhen, a subsidiary of the Kingboard Chemical Holdings, to stop production due to unsatisfactory sewage discharge, and the factory will be disbanded and shut down before September 30. It should become the very first PCB factory that has been forced to shut down due to strict environmental protection inspections in mainland China. The Taiwanese industry has different views regarding the move by Kingboard, pointing out that Kingboard took the opportunity to close and disband its old factories that did not have operational benefits. However, it is a fact that the authorities in mainland China will carry out the strict implementation of environmental inspections, and it is expected that this will increase the cost of sewage and waste disposal for Taiwanese companies.  

 

As pointed out by the PCB industry, it is the origin of their current sewage discharge problems in the mainland and the solution to the problem that they need to think about. Taiwanese PCB factories have operated in the mainland market for many years, while their previously approved wastewater discharge has reached the critical limit of the authorized amount. With the expansion of the product over the years, waste-water generated during the intermediate process has increased significantly, and each plant is currently making every effort to improve the recovery of “middle water” generated, so as to effectively control the discharge of wastewater externally and come in line with the originally-approved emission standards and stipulated amounts. Of course, the increase of facilities treating "middle-water" will also increase the cost and burden.

 

In the past, local small and medium-sized PCB factories in the mainland have resorted to lowering their prices in order to compete for PCB orders, relying on saving on various costs, including environmental protection. If these small and medium-sized factories cannot afford to build further environmental protection facilities, they might choose to exit from the market, which should help facilitate the reconstruction of order in the market order and ease the oversupply of PCB capacity.

 

As for the currently well-discussed issue of the "order transfer-to-order" effect for PCB orders in the market, it takes one season for the faster factories but for the slower, one year in general, to be certified and get into mass production. As further noted by the PCB industry, PCB products are highly customized, unlike buying foods at the market. "If you cannot have the small cabbage at this stall today, you immediately change to another stall." Besides, credit checking and cross-certification by mutual parties (the buyer and seller) are very complicated, and it would usually take a season to a year. (Source of information: cnYes Network)