PCB manufacturers such as Tripod-tech, Unitech, Unimicron, and Dynamic have achieved a personal record-breaking high in their revenues in the third quarter of 2019. Compeq has even achieved a revenue of NT$16.2 billion, the highest revenue experienced in history. These PCB factories’ common feature is that their production capacity for HDI (high-density interconnection boards) has been excessively demanded by customers.

 

           The PCB industry has, therefore, shown that although the US-China trade war has affected the market with the uncertainty of orders for the HDI process, customers have been placing a significant amount of orders for HDI products. In the third quarter of 2019, customers have even requested short-term delivery and as we analyze the causes, it is likely that these customers would prevent the US-China trade confrontation from worsening. Also, it is possible that Taiwanese PCB factories are, on the one hand, experiencing a limited capacity in increasing new HDI processes in recent years. At the same, 3C products have, on the other hand, resorted to a PCB design with the HDI interface as its main component.

 

           Compeq, for example, has a significant number of orders for high-end HDI by P30, the largest mobile phone brand in mainland China, that increased in the second quarter of 2019. This timing was considered to be both the least promising and successful season, as well as the off-season for Apple orders. These orders helped Compeq generate up to RMB12 billion in revenue. This revenue has also set a record high compared to the same period from the previous year.

 

           This achievement becomes less coincidental when viewed from the case of Compeq. The company invested in HDI processes rather early, so that its technology is highly reliable. More importantly, Compeq has created a massive amount of HDI production capacity to undertake orders, showing that when PCB manufacturers increase, the company becomes larger and more capable.

 

           As far as the competition of the overall Taiwanese PCB industry is concerned, PCB investments remain to be persistently stronger. In terms of technology, each factory continues to employ HDI (high-density interconnection board), HDI Anylayer, rigid-flex board, SLP, and other innovative technologies to cope with the design trends of customers for 3C electronics while these products become lighter, thinner, shorter, and smaller and also heading towards new product applications such as semiconductors with COF development. The aim is to make use of technology to reduce the number of competitors including land-based PCB manufacturers to gain a share in the market. Even if these opponents are able to cross the threshold competition of high technology, they would still have to confront various challenges when technology is upgraded, which requires a large amount of funding to complete.

 

           Zhen Ding has already become the world's largest soft board manufacturing plant in terms of its output value. In addition to HDI processes, the company has also set up production lines with new technology such as SLP and others. As for Unitech, it has dominated the market with its yield rate and production capacity in terms of the rigid-flex board while Unimicron possesses the production niche and superiority in HDI and SLP.

 

 

        In fact, such a competitive advantage is achieved through large capital expenditure. For instance, since Unimicron is optimistic about the growth of IC substrates, the company has accelerated its planning for capital expenditure. The total capital expenditure has increased by nearly NT$2 billion since the second half of the year, increasing capital spending to as much as NT$26.45 billion for 2019 and 2020. Given this scale of investment, this has resulted in regular PCB factories being left behind. (News source: Cnyes network)