If it’s not Components... Then its PCB’s! Latest Trends & Challenges facing the PCB fabricators about to impact OEM’s & CEM’s alike.

22nd February 2021

Cost and Availability Challenges Impacting the Global PCB Market

Dear Business Partner,

We hope you, your colleagues and your families are safe and well.

At Fineline we pride ourselves on being your trusted partner and keeping open communication channels regarding circumstances which may impact our businesses.

It is now a year since the Covid-19 pandemic impacted our world. The PCB industry was no exception. February 2020 saw China PCB factories close as the pandemic gripped China; we then saw the impact on the rest of the world. Many factories in Europe and the US were forced to close as we went into Lockdown 1.0 and with no experience of the situation, we were uncertain what lay ahead.

As the world adjusted to living with Covid and the safety measures we have all put in place, business began to return to a new normal.

Today we continue with the challenges of Covid and hope that as the vaccine is rolled out globally, we will return to some form of normality, although we recognise many aspects of business will have changed for the long term.

Today we are facing further challenges in the global PCB world. Capacity and material shortages, along with commodity prices and exchange rates are coming together to create cost increases and extended lead-times. It is an unfortunate situation but one we must tackle together to minimise disruption.

Current Challenges: Lead-time and pricing
China’s economy, whilst struggled at the start of the pandemic, has recovered strong and today the manufacturing sector in China is running at the fast pace for several years. The local PCB market in China is exceeding the export market.

Copper Costs
Today the Copper Clad Laminate (CCL) market is experiencing shortages as a result of damaging events at two major resin factories and a global shortage of copper. The electronic vehicle market and green energy projects require significant volume of copper, an electric car typically uses around 30kg of copper, a wind turbine 5+ tonnes. Global stock levels of copper are at the lowest since 2014. This has pushed prices up more than 50% in the last year.

Gold Costs
Gold costs have also risen significantly (30%+) in the last year.

USD - CNY
Typically, European and US companies have bought in USD from China. Following the recovery of the Chinese economy, USD has weakened against the CNY(RMB) by around 10% impact on the cost of PCBs where bought in USD Currency.

Freight
As has been seen over the last six months, freight continues to be problematic. The lack of air cargo capacity has increased costs with airlines continuing to apply surcharges. Sea freight has experienced many challenges with the current situation being a lack of containers and availability in Asia and overloaded ports in Europe and the US. Surcharges are now being applied by the sea freight providers.

Pricing and Lead-Times
Pricing has reached a level that is unsustainable by the factories. For companies in Europe the strength of the EUR and GBP against the USD are helping to offset some of the increases, but they are unavoidable.
Lead-times are being extended due to the shortage of CCL, particularly for 2oz and greater requirements.

Fineline Supply Chain
We can work together to find solutions and minimise any impact. We have technical solutions and an extensive and fully audited supply base which we can utilise. Where supplier transfer options are appropriate, we have a proven and robust mechanism to create efficiency and accuracy.
We do have options available to help manage the current challenges.

How can you help?
The situation is likely to continue for the foreseeable future.
We urge our customers to look closely at forecast and future demand, review stock levels and consider
extended lead-times.

We also require your support in managing the price increases.

Please take the warning seriously and talk with the team at Fineline to help manage your demands, stock
levels, and pricing. We are there to support you.

Furthermore, if you require a meeting and more in-depth discussion, we are happy to present the data and talk further. But please do not wait. It is important that we work in partnership to overcome these challenges and smooth the path ahead.

Yours sincerely
Clive Wall