PCB, with stable industry growth and increased concentration, has ushered in a peak demand season in the second and third quarters.
PCB is the mother of electronic products, widely used, and the global PCB industry is growing steadily. It grew by 8.6% in 2017 and is expected to grow by 7.3% in 2018. The global PCB market size will reach 68.8 billion US dollars in 2022, with a compound annual growth rate of 4.0% from 2017 to 2022. Communication base stations, automobiles, and consumer electronics will grow rapidly, and the compound annual growth rate from 2017 to 2022 will reach 4.9%, 4.8%, and 4.7%, respectively. The advent of the 5G era will drive a new round of development of the electronic industry, benefit from the demand of emerging industries, continue to transfer the global PCB industry to Chinese Mainland and further enhance the industry concentration. We are optimistic about the high-quality leading companies in the PCB industry.
Driven by emerging demand, the growth momentum of the PCB industry is sufficient: the upgrading of 5G base station structure is expected to increase the PCB demand area of base stations by 4-5 times. It is predicted that the composite growth rate of PCB for communication base stations will reach 6.9% from 2017 to 2021; The value of electric vehicle PCBs per vehicle is several times that of traditional fuel vehicles. Traditional fuel vehicles have a PCB value of $60 per vehicle, while electric vehicle PCBs have a value of $400 per vehicle. It is predicted that the global production of electric vehicles will reach 6 million by 2022; The innovation of smartphones drives the continuous increase in the value of individual PCBs. The usage of iPhone Xs Max circuit boards is as high as 27, including 3 SLP motherboards and 24 soft boards, with a predicted value exceeding $70; The number of PCBs used in mobile phones with three cameras/four cameras, 5G phones, foldable phones, wearable devices, etc. will significantly increase, and the industry will have sufficient growth momentum in the future.
The market concentration has further increased, with the Big Evergrande and the Strong Evergrande: According to Prismark data, the total global share of the top 30 PCB board companies in 2011 was 49.8%, and in 2017 it increased to 60.5%, indicating a significant increase in market concentration. The market share of China's leading PCB companies has significantly increased, with Pengding Holdings increasing from 2.7% in 2011 to 6.1% in 2017, Shennan Circuit increasing from 0.6% in 2011 to 1.4% in 2017, and Shennan Circuit increasing from 0.37% in 2011 to 1.06% in 2017. The PCB industry has obvious advantages in latecomer development, with new production lines featuring high automation, fewer personnel, advanced technology, and high production efficiency. The production capacity of old production lines will naturally be phased out. We believe that in the future, with the tightening of environmental policies and financial pressure, the survival environment for small and medium-sized enterprises will become increasingly difficult, resources will be tilted towards leading companies in the industry, and market concentration will further increase.
The global PCB industry continues to shift to the Chinese Mainland: China, as the largest producer of the global PCB industry, has increased its proportion in the total output value of the global PCB industry from 31.18% in 2008 to 50.53% in 2017. It is predicted that there will be further transfer to China in the future. It is expected that China's PCB output value will reach 35.6 billion US dollars in 2022, accounting for 51.9% of the global market. The output value of the Americas, Europe, and Japan will account for the same proportion nn