News description
    In 2019, despite the slow global economic growth, international trade disputes, shrinking end product shipments, and other unfavorable factors, PCB manufacturers have not completely reduced their capital expenditure plans while some manufacturers have even expanded their capital expenditures. 

Impact analysis

    Taking the announced capital expenditures of seven manufacturers among Taiwan’s top 10 PCB factories as the observational targets, the total capital expenditures in 2018 was approximately NT$37.5 billion and the estimated capital expenditures in 2019 are NT$36.3 billion. This demonstrates a reduction of only 3.2% amounting to approximately NT$1.2 billion and indicating that the major large manufacturers tend to look at the overall prosperity conservatively and that this reduction will not fully reflect it in their capital expenditure planning. Some manufacturers have even planned to invest a historically high capital expenditure amount in 2020, showing that the operation of the PCB industry is becoming more diverged. 

 

    Generally, most of the detailed planning content in the capital expenditures of various manufacturers emphasizes the capacity expansion of high-end products or process optimization and improvement. Among the products include substrate-like PCBs (SLP), high-end carrier boards, flex-rigid circuit boards, HDI, etc. Since 2017, the trend appears to show that more terminal products are being introduced with high-end PCBs and this phenomenon can also be verified by the structural changes in Taiwan’s circuit board products. From 2017 to 2019, the proportion of HDI has grown from 17% to 19%, the flex-rigid circuit boards increased from 2.3% to 3.8%, and the carrier boards rose to 12.5% from a decline of 11% at one time. 

 
    In 2018, the capital expenditures of each manufacturer accounted for approximately 10% of the revenue. As a result of the trend of higher investments in high-end product lines, it will be challenging for small and medium-sized manufacturers to establish high-end product lines and these manufacturers also have to bear a high degree of operational leverage risk. However, in the face of structural changes in the market products, small and medium-sized manufacturers have to choose whether they will participate with the current trends or accept the challenges of industrial polarization development where large manufacturers will become more successful.