[Taiwan Chip News] AI Boom Lights Up PCB Industry... Growth Expected Through Next Year

Growth Phase This Year Due to Front Market Recovery
AI Expansion Benefits from Cloud to Edge
PCB Entire Supply Chain Expected to Grow 7.4%

The Taiwan printed circuit board (PCB) market is expected to overcome last year's sluggish business conditions and enter a recovery phase this year. With the increasing demand for artificial intelligence (AI) and electric vehicles, the PCB industry is expected to establish growth momentum and continue its growth trend until next year. As evaluations anticipating market recovery continue, stock prices of PCB and material suppliers in Taiwan are also showing an upward trend.

Taiwan PCB Industry's Expectations for Market Recovery Grow This Year

The Taiwan Printed Circuit Association (TPCA) released a report on the development of Taiwan's PCB industry on the 2nd. PCBs are key components used to form circuits in electronic products. They are used in the packaging process that allows manufactured semiconductor chips to be mounted on electronic products, serving to connect electrical signals and protect the chips.

According to the report, due to sluggishness in the three major core markets?mobile phones, computers, and semiconductors?the scale of Taiwan's PCB industry decreased by 16.7% compared to the previous year. Last year, the production value of Taiwan's PCB industry was 769.8 billion Taiwan dollars, significantly down from 900 billion Taiwan dollars the previous year. This was due to unfavorable market conditions such as high inflation and increased economic uncertainty. However, the automotive sector recorded a growth rate of 2.8%, showing resilience.

As of the fourth quarter of last year, about 65.6% of Taiwan's PCB production came from factories in China. The production share within Taiwan was 31.7%. During the peak season in the second half of last year, PCB production in China increased mainly for consumer electronics. The Taiwan PCB industry also expanded production sites to Southeast Asian regions such as Thailand, Malaysia, and Vietnam to address geopolitical tensions and global supply chain expansion.

TPCA forecasts that Taiwan's PCB industry will achieve an annual growth rate of 6.3% this year, with total production value reaching 818.2 billion Taiwan dollars. Including related industries such as PCB manufacturing, materials, and equipment, the supply chain scale of Taiwan's PCB industry is expected to grow to 1.21 trillion Taiwan dollars, with a growth rate of 7.4%. This is attributed to the expansion of AI applications and the increasing adoption rate of electric vehicles, which are expected to provide new growth drivers for the market.

This year, AI, which was implemented in the cloud, is expected to expand to various terminals through on-device AI (AI executed directly on devices), increasing demand for advanced PCBs. Additionally, as the global electric vehicle market develops actively, the rising adoption rate of electric vehicles is expected to increase PCB demand.

Recovery is also anticipated in the major markets of mobile phones, computers, and semiconductors. The easing of inventory pressure is expected to bring these markets into a recovery phase. Moreover, the emergence of new application fields such as satellite communications, virtual reality (VR), augmented reality (AR), and wearable devices is expected to provide new growth momentum for Taiwan's PCB industry, according to TPCA's forecast.

However, if the global economic recovery is delayed, high interest rate environments persist, geopolitical conflicts intensify, or economic risks originating from China increase, negative impacts on consumer markets may occur.

Positive Outlook for HOLLEY with TSMC Packaging and PCB Recovery

Along with the recovery of the PCB market, the stock price of HOLLEY, a Taiwanese company supplying semiconductor materials including PCBs, has been rising recently due to increased demand for advanced packaging from Taiwan foundry company TSMC. HOLLEY is a Taiwanese supplier of semiconductor materials including PCBs. On the morning of the 2nd, the company's stock price hit the daily limit at 130.5 Taiwan dollars during trading.

About 40% of HOLLEY's sales come from supplying various industrial materials, including advanced PCBs and semiconductors. The company is currently focusing on supplying materials necessary for advanced PCB manufacturing. As semiconductor process technology advances from 5 nanometers (nm; 1 nm = one billionth of a meter) to 4 nm, HOLLEY is also concentrating on supplying related materials. In Taiwan's semiconductor market, with rapidly increasing AI demand, HOLLEY is expected to benefit.