The booming development of the electronics industry in Taiwan has seen printed circuit boards (PCBs) become an essential part of the supply chain and one of the most important sectors. In the pandemic year of 2020, the Taiwan PCB industry posted a record-high production value of NT$690 billion and saw its collective market capitalization hitting the NT$700 billion mark.
Compared to their peers in Japan, Korea, and China, PCB companies in Taiwan enjoyed the highest net margin of 8.8% in 2020. The strong performance was primarily driven by 5G applications and semiconductor demand. An increase in shipments of high-end products further expanded the scale of the PCB industry in Taiwan.
The investment by the PCB makers in Taiwan reflects a shift away from China, which was previously prioritized as a production base. For Taiwanese PCB manufacturers, the production growth in Taiwan outpaced the growth in China in 2020, an indication of the focus shift. The investment in new and expanded facilities in Taiwan by the industry in 2020 exceeded NT$100 billion. This is expected to lead to the creation of over 10,000 jobs and an annual production value of NT$50 billion.
The reshoring of Taiwanese PCB makers aims to retain the manufacturing of high-end products at home. Digitalization and automation are the catalysts for innovation and growth for the Taiwanese PCB industry as well as being its challenges. For instance, the advancement of artificial intelligence requires high-speed transmission for servers or high-performance computers. As semiconductor nodes move to 5nm and 3nm, IC substrates need to accommodate finer pitches.
The application of 5G and 6G requires the processing of signals at higher frequencies for communication equipment and mobile devices. PBC materials need to reduce signal degradation. Meanwhile, the demand for new energy vehicles such as electric vehicles creates the need for compound semiconductors and high-power environments. This makes heat dissipation a major issue for printed circuit boards. To meet the technological requirements of the future, the PCB industry in Taiwan needs to make breakthroughs in order to avoid creating gaps in the supply chain.
The buzzwords for the migration from personal computers to mobile devices were standardization and mass production, as cost was the key consideration. This put Taiwanese PCB makers at a significant advantage. However, in the era of AIoT + 5G, the demand is for niche and customized PCBs. The importance of technology goes without saying. To meet the demand from end-market applications going forward, the PCB industry in Taiwan needs an R&D resource platform that integrates materials, equipment, manufacturing processes and testing. This will serve as a springboard for the development of high-end PCBs, the innovation of added value and the upgrade of the industry.
The PCB R&D Resources Platform is an industry initiative developed and promoted by the Taiwan Printed Circuit Association (TPCA). It is hoped the platform will evaluate the technological capabilities of the industry and identify inventory and demand gaps by coordinating with industry (companies and industry associations), academia (research institutions) and government, in order to determine the direction and the target of technological development for the PCB industry.
High-end IC substrates are one of the R&D focuses for the PCB industry. This will also affect the competitiveness of Taiwan’s semiconductor industry. The in-sourcing of PCB materials and equipment will not only help to accommodate the requirements and specifications of future products, but also create the foundations for a local supply chain. The development and introduction of smart manufacturing is key to the digitalization of PCB makers. It is also essential to achieving higher operating efficiency and stronger competitiveness.
With the increasing regulations and customers’ requirements, the bar for environmental and safety issues is getting progressively higher for the PCB industry. Improvement relies on technological innovations such as the increased use of recycled materials and the reduction of industrial safety events. The development of the PCB industry should go hand in hand with the cultivation of talent and the optimization of the workforce structure. These issues will be addressed by the PCB R&D Resources Platform. It is hoped that the policy support centering on technology R&D can continue to create new value for the PCB industry in Taiwan.