(January 19, 2021)
        Doubtlessly, the PCB industry must have been shocked and surprised by the just ended 2020. At the turn to 2021, the TPCA pointed out the five key factors constantly affecting PCB industry development. PCB businesses should keep close track of their future development trends.

1.    Misfortunes never come one at a time: COVID-19 and Trade Game
        According to Google’s top ten searches, “COVID-19” was ranked second. As mainland China was the severely affected country when COVID-19 broke out in early 2020, the cross-strait production portion of Taiwanese businesses in Q1 fell to 60.7%, the lowest in the last three years, when the mobility of labor and materials was limited by the lockdown policy of the PRC government. Although the worldwide spread of COVID-19 has traumatized the global economic market, it boosted the ongoing development of work from home and the stay-at-home economy. The spread continues, raising the demand for electronic products, including laptops tablets, game consoles, and bringing unexpected opportunities to the PCB industry. In 2021, despite the release of vaccines, new variants of COVID-19 arising one after another has brought the end of the pandemic to a new uncertainty. When globalization and co-existence with the pandemic are required, it is noteworthy to keep track of the effects brought to the PCB industry by the global economy. In addition to the pandemic, the “Regional Comprehensive Economic Partnership” (RCEP) signed in Q4 by 15 countries, including mainland China, Japan, South Korea, Australia, New Zealand, and the 10 ASEAN member countries, became another global issue. Although little impact on the PCB industry is noted so far, the true impacts will become clearer after the release of the tariff list. Following the continuing development of impacts from global issues like the US-China trade war and the COVID-19 pandemic, Taiwan’s PCB industry is forced to face the diversification of products and deployment of production bases in response to the macroeconomic challenges.

2.    COVID-19 accelerates digitization and boosts smart manufacturing
        Objectively speaking, although COVID-19 has traumatized the global economy, like water that can bear a boat but also swallow it, the pandemic has accelerated the digitization and smart manufacturing in different industries. For the PCB industry, as the virus is transmitted by human contacts, many production bases were shut down after workers got infected. Compared to the semiconductor industry with highly developed smart manufacturing, although smart manufacturing is difficult to apply in the PCB industry due to its complex production process, as it is an inevitable trend, the pandemic simply accelerated the smart manufacturing of industries.
        In addition, worldwide PCB-related exhibitions, fairs, and seminars in 2020 were postponed, cancelled, or digitized due to the pandemic. Things that have never been considered were all on their marks because of the pandemic. Although we still need to overcome many technical issues and habits, it is undeniable that digitization has brought another possibility of exhibitions and benefits in the future.

3.    Advice for Taiwan’s PCB industry guides sustainable development of industries
        The TPCA published two white papers in 2014 and 2017, respectively putting “empowering a highly value-added, eco-friendly, smart, and highly competitive PCB industry” as the vision to promote the industry’s development. To extend this spirit and prepare for future challenges, the TPCA published the “Advice for Taiwan’s PCB Industry” in 2020 to make recommendations for PCB industry development in terms of five aspects: product deployment, smart manufacturing, HSE, technology and materials, and human resources based on four issues: international trade game, 5G business opportunities, sustainable safety, and workforce, with focus on the global development trends. The Advice will become the guide for strategic planning and top-down collaboration of Taiwan’s PCB industry in the next three years. The TPCA will also continue to build a platform for industrial upgrading and stimulate industry-academia-research collaboration.

4.    Bigger deployment through semiconductors with IC substrates
        TSMC’s foundry business accounts for over 50% of the market, leading the global market. Although Samsung of South Korea endeavors to keep up with the TSMC in process technology and market share, the latest research of related institutions shows a 20% gap between Samsung and the TSMC in the 5nm process. In addition, according to the estimates of the IEK of the Industrial Technology Research Institute, the 2020 output of Taiwan’s semiconductor industry will increase by 20.7% to over NT$3 trillion for the first time to regain the world’s top second after three years (the USA and South Korea are ranked the top first and top third respectively). The IC substrate is a key component of chipsets. In terms of the production region, Taiwan is the world’s No. 1 in IC substrate production. To fulfill the future development and application of HPC, 5G, B5G, and AI, IC substrate as the key component must play a crucial part, making it a key investment item of Taiwan’s PCB industry in the last three years. To maintain Taiwan’s semiconductor leadership, facing the increasing keener competitions from global competitors, it is necessary to systematically make short-, medium-, and long-term comprehensive strategic planning to develop R&D capacity in areas covering chemicals for advanced PCB materials, smart manufacturing, materials circulation, and advanced processes, in order to facilitate Taiwan’s forward-looking technology and economic development.

5.    Unlimited 5G development drives investment heat
        If COVID-19 is the global catastrophe of 2020, 5G will absolutely be a ray of hope. According to TPCA estimates, the cross-strait PCB outputs of Taiwanese manufacturers will reach NT$678.5 billion, and a higher amount is expected. Although pessimism cast over the PCB industry in 2019 and 2020 due to the US-China trade war and COVID-19 pandemic, as the demand for products relating to 5G requiring advanced processes began to rise at the end of 2019 to 2020. The limited capacity could not fulfill the rising demand, and the IC substrate has become the drive of Taiwan’s PCB industry due to the ongoing demand from 5G-related applications. In addition, the advanced technology of Taiwanese manufacturers is one of the key factors maintaining a gap from PRC manufacturers chasing after in the game. Furthermore, while the development of business opportunities in 5G has begun, Taiwanese PCB manufacturers also accelerate their domestic and global deployment. According to the TPCA estimates, the total amount of domestic and global investments by Taiwanese PCB manufacturers and materials suppliers in 2020 will exceed NT$100 billion. For example, the Taoyuan plant construction projects of Unimicron and Tong Hsing, the merger and new plant construction plans of Zhen Ding Technology, and the PCB plant construction projects of Flexium Interconnect, Kinsus Interconnect, and Speedy Circuits will attract materials suppliers, such as NPC Copper Foil, Elite Material, Taiwan Union, and ITEQ, to increase investments in Taiwan to create huge business opportunities for peripheral industries such as advanced equipment and materials. Besides Taiwanese PCB manufacturers, worldwide PCB manufacturers also invest in advanced processes in response to the rise of 5G. Therefore, whether or not the suppliers of related chemicals and materials can keep up with PCB manufacturers' development or trigger another struggle for materials will also be a concern for the PCB industry.
        Positive growth in output has been noted in Taiwan’s PCB industry since 2016. Besides the technological advantages, the global industrial chain's key issues since 2019 have marked out that the resilience and capacity in product diversity of Taiwan’s PCB industry enabling Taiwan to cope with macroeconomic challenges with great flexibility. Looking ahead to 2021, although there are global obstacles including the COVID-19 pandemic and the international trade game in the front, and the catching up of PRC manufacturers at the back, the continual extension of business opportunities from advanced processes and 5G, Taiwanese PCB manufacturers should make well preparation to face the known ups and downs in 2021.