Market Expectations: With the recovery of the terminal market and the fermentation of new applications, the overall Taiwan PCB industry chain is expected to grow by 7.4% in 2024.

 

"Reviewing the development of the Taiwan PCB industry in 2023, amidst the lackluster performance in the three major application markets - smartphones, computers, and semiconductors, the industry experienced a decline of 16.7% for the year, with a total output value of 769.8 billion New Taiwan Dollars. This marked a significant drop from the historical high of over 900 billion achieved in 2022, falling substantially below the 800 billion mark.

Looking ahead to 2024, with the alleviation of inventory pressure in the terminal market, it is expected that the major application markets will enter a recovery phase. Supported by the low base effect, the overall Taiwan PCB industry is projected to resume growth, with an annual growth rate of 6.3%, reaching a total output value of 818.2 billion New Taiwan Dollars domestically and overseas. This recovery is expected to further drive the revival of the supply chain, with the estimated total output value of the Taiwan PCB industry chain (PCB manufacturing, materials, equipment) reaching 1.21 trillion New Taiwan Dollars, representing a growth rate of 7.4%."

"In 2023, the Taiwanese PCB industry faced headwinds, with the automotive application sector emerging as the focus of counter-trend growth.

Reviewing 2023, the overall product structure of the Taiwanese PCB industry comprised sequentially of multilayer boards (29.9%), flexible boards (26.0%), HDI (19.3%), substrate boards (15.6%), single/double-sided boards (7.6%), and other (1.6%). Apart from the momentum in automotive and AI-driven multilayer boards, all other products experienced comprehensive declines due to inventory clearance pressures in the terminal market. Terminal applications were as follows: communication (33.9%), computers (21.4%), semiconductors (15.6%), automotive (13.2%), consumer electronics (11.0%), and others (4.9%). Among these, automotive applications were the only sector to grow amidst the downturn, with an annual growth rate of 2.8%. Conversely, communication, computer, and consumer electronics applications were heavily impacted by multiple factors such as high inflation, high interest rates, and economic uncertainty, resulting in low consumer confidence and ongoing market demand suppression due to destocking strategies. Semiconductor application substrates, primarily focusing on the mobile phone and personal computer markets, were similarly affected by these unfavorable factors, compounded by a high base period, leading to the substrate being the product with the largest decline in 2023.

From a production base perspective, mainland China remained the primary manufacturing location for the Taiwanese PCB industry, accounting for approximately 65.6% of the fourth-quarter output value in 2023; Taiwan followed with approximately 31.7%. Over the past year, declining demand for substrate boards led to a sequential decline in output value in Taiwan, widening the gap in output value distribution between the two sides of the Taiwan Strait once again. Additionally, in the latter half of the previous year, with the arrival of the consumer peak season, the market's freight-pulling force began to strengthen, further boosting the output value of mainland China, which primarily manufactures consumer electronics products. Other overseas production sites for Taiwanese companies accounted for approximately 2.7%, concentrated in Southeast Asia (Thailand, Malaysia, and Vietnam), with a focus on multilayer boards and HDI, primarily for computer, consumer, and automotive applications. In the past year, geopolitical tensions and international customers' restructured supply chain strategies prompted Taiwanese factories to expand into Southeast Asia once again. However, barring major unforeseen events, mainland China and Taiwan are expected to remain the main production hubs for Taiwanese companies in the coming years."

"Looking ahead to the development of the Taiwanese PCB industry in 2024, positive factors include:

1. The continuous expansion of AI applications from the cloud to the terminal, further driving demand for high-end PCB products.
2. With policy support and mainland Chinese automakers actively expanding into overseas markets, the penetration rate of electric vehicles is expected to increase.
3. As inventory pressure in the terminal market eases, key markets such as smartphones, computers, and semiconductors are expected to enter a period of recovery.
4. The development of other emerging applications (satellite communication, VR/AR/MR, wearable devices) will bring new growth opportunities to the PCB industry.

Negative factors that need to be considered include:

1. Slow global economic recovery and a high-interest-rate environment, which will continue to affect consumer confidence.
2. Escalating geopolitical conflicts leading to international instability.
3. Economic risks in mainland China may impact the recovery of consumer markets.

Despite the uncertain global economic and political situation, with the easing of inventory pressure in the terminal market and the low base period in 2023, core markets such as smartphones, computers, and semiconductors are expected to enter a period of revival. Additionally, with continued demand in areas such as electric vehicles, AI servers, and satellite communication, it is anticipated that the Taiwanese PCB industry will resume growth in 2024, with an annual growth rate of 6.3%, reaching a total output value of 818.2 billion New Taiwan Dollars."

"In 2023, the PCB supply chain underwent a period of adjustment in response to the prevailing environment, gearing up for renewed business opportunities in 2024.

Taking stock of 2023, the first half of the year witnessed a significant impact on output value in the PCB materials segment due to oversupply, leading to price declines. However, the sustained increase in demand for high-frequency and high-speed materials from AI servers supported performance in the latter half of the year. On the equipment front, the subdued market compelled board manufacturers to reduce investments in equipment, thereby affecting the overall situation. Consequently, the output value of Taiwanese PCB materials in 2023 was approximately 305.3 billion New Taiwan Dollars, representing a decline of 14.7% from 2022; while the output value of Taiwanese PCB equipment was approximately 56 billion New Taiwan Dollars, reflecting a decline of 16.8% from 2022.

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