Taiwanese PCB Industry Emerges from Slump, Sees Quarterly Growth with Q1 Output at NT$181.4 Billion
In 2023, both the global and Taiwanese circuit board markets experienced an unprecedented downturn. Although the first quarter of 2024 did not show significant positive growth, it exceeded expectations. With continued demand for AI hardware and low-orbit satellites, and in the absence of worsening unfavorable conditions, the overall market is showing a gradual upward trend. In the first quarter of 2024, the global output value of Taiwanese circuit boards reached USD 5.725 billion, a slight decline of 4.3% compared to the same period last year. However, benefiting from the appreciation of the US dollar, this translates to NT$181.4 billion, a minimal decline of 0.2% year-on-year.
Despite five consecutive quarters of double-digit declines in global output value, the demand has not significantly deteriorated, indicating that the recession is nearing its end. Looking ahead, the recovery is expected to be gradual. During the late stages of a recession or the early stages of recovery, consumer and business spending tends to be conservative, and sales are often concentrated in specific products. For example, growth in AI servers outpaces that of general-purpose servers, and budget smartphones perform better than high-end models. Consequently, PCB manufacturers experience varying market conditions based on the products they serve.
Looking ahead to the second quarter of 2024, despite being a traditional off-season, several economic indicators are turning positive. Businesses and consumers are adopting a cautiously optimistic attitude, leading to more aggressive procurement and spending. This is expected to boost sales of mobile phones, computers, and personal consumer products. Additionally, the impact of AI on products began to emerge in the first quarter, and demand for related products is expected to increase quarterly. This suggests that the electronics industry may not experience the typical seasonal downturn, and PCB performance is expected to surpass that of the first quarter. The global output value of Taiwanese circuit boards in the second quarter is projected to reach USD 6.018 billion, a 5.1% increase from the first quarter, with an annual growth rate of 9.2%. In NT dollars, this equates to NT$194.7 billion, with quarterly and annual growth rates of 7.3% and 15.0%, respectively.
In the first quarter, the application markets for Taiwanese PCBs were, in order: communications (34.7%), computers (20.9%), semiconductors (13.5%), automotive (13.5%), consumer electronics (12.1%), and others (5.3%). Except for semiconductors, all other applications saw increases compared to the same period last year. In communications applications, despite poor sales of high-end mobile phones, overall mobile phone sales grew slightly. Supported by low-orbit satellites and network infrastructure, the year-on-year growth was 1.8%. In semiconductor applications, after four quarters of decline, the BT substrate market is experiencing a slight recovery in consumer products, while the overall recovery of ABF substrates is slower. However, thanks to high-performance computing chips driven by AI, the year-on-year decline in the first quarter narrowed to 13.2%. The computer sector grew by 2.6% year-on-year due to a rebound in business laptops and the establishment of AI servers. The automotive sector saw a 2.9% annual growth rate driven by the increase in electronic components, smart cockpits, and ADAS systems. Consumer electronics applications began to recover with the replenishment of end-product inventories, achieving a 1.5% annual growth rate.
In the first quarter, the product breakdown of Taiwanese PCBs was as follows: multi-layer boards with more than four layers (33.8%), flexible boards (23.9%), HDI boards (20.1%), IC substrates (13.5%), and others (8.7%). Flexible boards experienced a 3.3% decline in overall output value due to stagnant high-end smartphone sales, despite growth in automotive applications. HDI boards grew by 7.4% driven by demand for low-orbit satellites, AI servers, high-end laptops, and automotive electronics. Multi-layer boards saw a positive growth rate of 2.5% due to the replenishment of end-product inventories and an increase in the proportion of high-end products.
Looking ahead to the second half of 2024, assuming no major negative global factors, the electronics industry is expected to continue its recovery. With the arrival of the peak season and the growth of AI Edge (such as AI PCs or AI smartphones), the output value of Taiwanese circuit boards is expected to rise quarterly. The forecast for the full year is USD 25.933 billion and NT$824.5 billion, with annual growth rates of 5.2% and 7.1%, respectively, marking a return to positive growth.
