Source: humphery

As a result of surging coal prices, toughening emissions standards and other factors, China’s manufacturing hubs are gripped by a wave of power cuts, as the Chinese government introduced power rationing. The move is a significant blow to the ongoing global chip shortage crisis, especially when the world’s printed circuit boards (PCB) industry is mostly concentrated in Asia, specifically Taiwan, China, and Japan. 

Taiwan’s PCB industry leads the world with a 34% global market share, with China closely behind at 28.4%. Thanks to growth in its high-tech sector and policy supports, China’s PCB industry is continuously growing. In contrast, Japan, the world’s third largest PCB industry with a market share of 16.9%, has been seeing a steady decline of its global market share. Its high domestic production costs are driving its PCB industry offshore, mainly to Southeast Asian sites. 

With approximately 60% of its PCB production capacity in China, the latest wave of power cuts will certainly impact Taiwan’s PCB industry in the short term, delaying product deliveries. The global electronics industry should also brace for further supply chain disruptions in Q4, given the unstable nature of China’s power supply market.

Of the Taiwanese PCB production capacity in China, 37.3% of which are multilayer boards, 26.7% are flexible PCBs, and 19.1% are HDI PCBs. In contrast, Taiwan manufactures about 80% of its substrates in Taiwanese sites, with only 5.1% of them made in China. Despite the relatively less exposure, experts still see further strain on the already tightened global PCB supply chain. 

In the long term, Taiwan might move its PCB production sites away from China to mitigate the risks associated with power supply uncertainties.


Source: UDN, CNA