GEORGE TOWN: Local and multinational printed circuit board (PCB) product companies are increasing production to meet the rising global demand despite a lower growth forecast this year.
According to the latest Global and China PCB Industry Report published in March, the growth of the PCB industry is expected at 5.1% this year, compared with 10.5% in 2010.
“PCB is the cornerstone of the electronics industry, and the circuit of all electronics requires PCB. The PCB industry has been very mature, with limited growth rate or decline margin,” the report said.
“In 2008 and 2009, the output value of the PCB industry decreased due to the fierce price competition.
“In 2010, the electronics industry rebounded, but the PCB industry only grew by 10.5%. In 2011, the growth is expected to be merely 5.1%.”
Late last year, Chiang Shiuh-Kao, managing partner of Prismark Partners, a market research firm, had also forecast that the global PCB production would grow by about 6% and had cautioned manufacturers on expanding capacity to boost market share with lower prices.
The companies that are currently raising their output with new investments include Ibiden Co Ltd, Kontron Design Manufacturing Services (M) Sdn Bhd (KDMS), GUH Holdings Bhd and NationGate Technology (M) Sdn Bhd.
They intend to meet the growing demand for light-emitting diode (LED) TVs, mobile phone displays and mobile computing products.
According to California-based research house IHS iSuppli, global shipment of LED TVs is expected to increase to 495.6 million units in 2011 from 283.3 million units in 2010.
As for the mobile phone display industry, Display Search, headquartered in Santa Clara, California, projects in its latest report that revenues for the industry would increase by about 47% from US$12.8bil in 2010.
It also projects the global market size for the mobile computers to increase by about 27% to 277 million units in 2011.
Although the increase in PCB products growth is expected to be single digit, German company KDMS is projecting a double-digit growth of about 36% for 2011.
“We are spending about US$5mil this year to expand and upgrade our production facility to raise output of PCB assembled products to 350,000 pieces this year, compared with 310,000 pieces in 2010.
“The products are used in the telecommunications, industrial, automotive and medical industries,” KDMS chief executive officer Michael Riegert said.
On the shortage of raw materials from Japan, Riegert said so far KDSM had not encountered any problems.
Ibiden is also increasing its PCB bare board output at its operations in Penang with an additional investment of RM1bil in a second plant. Its products are used in high-end smart phones.
The company had invested RM1.2bil in its first plant in 2008, which produces 40,000 sq m of PCB bare boards per month.
Ibiden president and chief executive officer Hiroki Takenaka said construction of the second plant would begin soon and it was expected to start operations by October next year. Upon completion, the second plant will produce 40,000 sq m of PCB bare boards per month.
GUH is also increasing its monthly production of its double-sided and six-layered PCB bare boards to 50,000 sq m in the second half from 40,000 sq m presently.
“We are investing about RM16mil this year to expand our production facility in Penang and Suzhou, China. For the first quarter of 2011, the group is expected to achieve more or less the same sales revenue registered in the previous corresponding quarter,” managing director Datuk Kenneth H'ng said.
Meanwhile, NationGate Technology is targeting to raise the sales of its PCB assembled products by 20% this year from the RM181mil revenue it recorded in 2010.