What Should We Do When PCB Board Prices Continue To Rise

- Aug 18, 2020-

Copper foil shortage, CCL shortage, PCB delivery difficulties Copper Park, CCL prices continue to affect the entire PCB industry. Less than one month after entering 2017, PCB board has experienced a round of price rise. It is understood that the price of PCB board has increased by 5% again in this round of price rise. Compared with the previous no difference price increase, the difference is that the price increase of PCB board this time is mainly for products with thickness above 1.2 and higher grade.

For many small and medium-sized PCB factories, due to the lack of extra funds to prepare goods in advance, customers came to talk about price reduction at the end of last year, but the upstream material suppliers raised again. Rice is too expensive to be put into the pot. January February is the peak of downstream PCB shipment, and the limited working days are reduced, so it may be difficult for printed circuit board factories to deliver on time after the year. In fact, in recent years, the price of boards and raw materials has been declining, and the demand has been increasing year by year, which also leads to many PCB enterprises being squeezed out of the market because of the price war.

"Large enterprises purchase large quantities of raw materials and have certain bargaining chips. However, small enterprises do not have the opportunity to talk about it. We will increase the price as much as we say. Otherwise, we will not supply any more goods. In this way, the cost of small downstream enterprises will be increased, the difficulty of survival will be increased, and mergers and acquisitions, integration and shuffling will be accelerated. " A person in charge of a PCB raw material manufacturer said that CCL copper clad laminates and raw materials continued to rise, showing a state of price without market. Some small and medium-sized enterprises were more impacted, and they would face the risk of capital chain fracture in 2017.

Since the beginning of 2016, the price of PCB standard copper foil has increased by more than 50%. The processing cost of copper foil and the price of effective copper clad laminate are 100% and 50% higher than the original average level. At the beginning of November 2016, the original copper price soared to 48000 yuan / ton. Due to the 26% increase in the original copper price, the driving force for the price increase of electrolytic copper foil was transferred from processing cost to the original copper price, and the overall price of electrolytic copper foil has exceeded 110000 yuan / ton. According to Taiwan media reports, in January 2017, copper foil processing fees again experienced a small-scale price increase.

The general manager of a company in the industry said frankly, "copper clad laminate manufacturers have changed the habit of paying only after three or five months of arrival. When purchasing copper foil with cash, the price of copper foil has increased by 20-30%, and we have to queue up to order and supply limited quantity. " Generally, the board trade accounts are paid for 90 days to half a year. After the demand for copper foil of lithium battery appeared, some manufacturers used cash to buy materials, which indirectly caused the vicious competition of price rise, which was unprecedented in the development of PCB industry for more than 30 years.

Copper foil has been in short supply in the past year. In March last year, Jiantao, a large copper clad laminate factory with the highest market share and the largest influence, first issued a price increase notice. Then, other plate manufacturers followed suit, stimulating the upstream and downstream supply chain to follow up comprehensively.

The shortage of copper foil supply also led to the rapid rise of other raw materials. According to the news from the industry, another main material of CCL, glass fiber thick cloth is likely to rise to 7 yuan / m, aluminum substrate and light guide plate increase by more than 20%, FR-4 by more than 40%, plastic plate and plastic parts by more than 10%, and even cash transactions in cartons for loading.

Copper foil, CCL manufacturers make a lot of money, PCB manufacturers complain

In the past few years, due to the competition and price reduction of copper foil processing price, it was often carried out under the situation of loss break even point or below. As a result, some enterprises producing copper foil at home and abroad went bankrupt, closed down or changed production, resulting in the further increase of copper foil industry concentration.

Now, affected by price rise and shortage, Jinju Development Co., Ltd. of Taiwan copper foil factory has got rid of the predicament of continuous losses for five years, and its revenue has reached a new high in more than six years, and its share price has doubled several times. The net profit of domestic Kingboard in 2016 will reach HK $3.8 billion, an increase of more than 200% compared with the previous year's HK $1.3 billion; The annual net profit of Guoji Copper Co., Ltd. increased by 550-325 million yuan.

The production enterprises of printed circuit board generally give out the red light. Not long ago, a PCB Factory in China was in a financial dilemma. Before that, the PCB Factory placed an order to buy materials as usual. As the processing fee of electrolytic copper per ton soared from 18000 yuan to 36000 yuan, the material supplier told him that he had to pay the previous 20 million yuan before purchasing materials. The board factory bravely borrowed the usury and paid back the payment due, and then received the notice that the order could be placed only after the advance payment had been paid in. After some twists and turns, finally entered the link of placing orders, but found that they had to queue up for quotas. At this time, the company's capital chain was on the verge of breaking.

Because the downstream customers of PCB are relatively strong, except for a few board factories which have carried out a small price increase, most of the board factories have not successfully transferred the rising costs to the downstream customers, because the downstream customers of PCB generally have a large amount of material inventory. In order to alleviate the financial pressure, some board factories began to extend the payment and delivery period to PCB equipment manufacturers and PCB processing plants (such as PCB electroplating processing plants, PCB tin spraying processing plants, etc.).

As a result, PCB equipment manufacturers and PCB processing plants are affected, and their life is getting worse. Some small PCB factories are under pressure and shut down.

Although the price of copper foil is getting higher and higher, the copper foil factories are still full of customers. Many plate manufacturers and plate manufacturers are queuing up in the copper foil factories with cash to ask for goods, and they may not be able to return with the goods. A large number of plate factories with heavy financial burden are looking forward to the plate.

According to industry insiders, many PCB enterprises that have a good relationship with copper clad laminate factories have inventory of plates for two to three months. Some factories with a production capacity of only 230000 yuan have about 10% inventory