PCB sales Rebound Strongly After Pandemic Slowdown
The North American printed circuit board (PCB) industry has experienced a significant rebound in sales and orders in 2021 following a challenging 2020 due to the global COVID-19 pandemic. According to recent data from the IPC (Association Connecting Electronics Industries), PCB sales have surged in the first half of 2021 compared to the same period last year.
Q1 2021 PCB Sales Up 15% Year-Over-Year
In the first quarter of 2021, North American PCB sales totaled $2.48 billion, representing a impressive 15% increase compared to Q1 2020 sales of $2.15 billion. This strong growth was driven by robust demand across key end markets such as automotive, medical, aerospace & defense, and 5G infrastructure.
| Quarter | 2020 PCB Sales (Billions) | 2021 PCB Sales (Billions) | Year-Over-Year Change |
|---|---|---|---|
| Q1 | $2.15 | $2.48 | +15.2% |
Q2 2021 Sales Maintain Momentum with 12% Growth
The positive momentum continued into the second quarter of 2021, with North American PCB sales reaching $2.53 billion, up 12% compared to Q2 2020’s $2.26 billion. While the year-over-year growth rate moderated slightly from Q1, it still represents a significant improvement from the declines seen in 2020.
| Quarter | 2020 PCB Sales (Billions) | 2021 PCB Sales (Billions) | Year-Over-Year Change |
|---|---|---|---|
| Q2 | $2.26 | $2.53 | +12.0% |
Strong Order Bookings Bode Well for Second Half of 2021
Book-to-Bill Ratio Exceeds 1.0 for Five Straight Months
One of the key indicators of the health of the PCB industry is the book-to-bill ratio, which compares the value of new orders (bookings) to the value of shipped products (billings). A ratio above 1.0 indicates that demand is outpacing supply, while a ratio below 1.0 suggests that supply is greater than demand.
In 2021, the North American PCB industry has consistently maintained a book-to-bill ratio above 1.0, signaling strong demand and a positive outlook for the remainder of the year. The ratio peaked at 1.18 in March 2021 and has remained above 1.10 through July.
| Month | Book-to-Bill Ratio |
|---|---|
| March | 1.18 |
| April | 1.15 |
| May | 1.12 |
| June | 1.14 |
| July | 1.11 |
Backlog of Unfilled Orders Grows as Demand Outpaces Capacity
The strong order bookings have led to a growing backlog of unfilled orders for North American PCB manufacturers. As of July 2021, the backlog had reached $3.2 billion, up from $2.8 billion at the end of 2020. This increasing backlog suggests that PCB makers will be busy fulfilling orders in the coming months, which should support continued sales growth.
| Month | Backlog (Billions) |
|---|---|
| Dec-20 | $2.8 |
| Mar-21 | $2.9 |
| Jul-21 | $3.2 |
Key End Markets Drive PCB Demand
Automotive Industry Ramps Up PCB Orders for Vehicle Electrification
The automotive industry has been a significant driver of PCB demand in 2021, as automakers invest heavily in vehicle electrification and advanced driver assistance systems (ADAS). PCBs are essential components in electric vehicles (EVs), hybrid electric vehicles (HEVs), and autonomous vehicles, powering everything from the motor control units to the infotainment systems.
According to a recent survey by IPC, 72% of North American PCB manufacturers reported an increase in orders from the automotive sector in Q2 2021 compared to the previous quarter. This trend is expected to continue as automakers ramp up production of EVs and HEVs to meet growing consumer demand and comply with tightening emissions regulations.
5G Infrastructure Rollout Boosts Telecom PCB Sales
Another key driver of PCB demand in 2021 has been the ongoing rollout of 5G wireless infrastructure. 5G networks require a significant number of PCBs for base stations, small cells, and other equipment, driving demand for both high-layer-count and High-Frequency PCBs.
In the first half of 2021, North American PCB sales to the telecom sector grew by 18% year-over-year, outpacing the overall industry growth rate. This trend is likely to continue as telecom operators accelerate their 5G deployment plans to meet growing demand for high-speed, low-latency wireless connectivity.
Medical and Aerospace & Defense Sectors Show Resilience
Despite the challenges posed by the COVID-19 pandemic, the medical and aerospace & defense sectors have remained relatively resilient in terms of PCB demand. Medical equipment manufacturers have seen strong demand for PCBs used in ventilators, patient monitors, and diagnostic devices, while the aerospace & defense industry has continued to invest in PCBs for avionics, radar systems, and satellite communications.
In Q2 2021, North American PCB sales to the medical sector grew by 9% year-over-year, while sales to the aerospace & defense sector were up 5%. These sectors are expected to continue providing a stable source of demand for PCBs in the coming quarters.
Supply Chain Challenges and Mitigation Strategies
Component Shortages and Price Increases
While the strong demand for PCBs is a positive development for the industry, it has also created some supply chain challenges. Many PCB manufacturers have reported difficulties in sourcing key components such as copper-clad laminates, epoxy resins, and certain types of capacitors and resistors.
These component shortages have led to longer lead times and higher prices for PCBs, which could potentially slow down the industry’s growth momentum. In response, PCB manufacturers are working closely with their suppliers to secure adequate supplies of critical components and are exploring alternative sourcing options to mitigate the impact of shortages.
Addressing Capacity Constraints
Another challenge facing the North American PCB industry is capacity constraints, as the strong demand has led to high utilization rates at many manufacturing facilities. To address this issue, some PCB makers are investing in capacity expansions and equipment upgrades to increase their production capabilities.
For example, in June 2021, TTM Technologies, one of the largest PCB manufacturers in North America, announced plans to invest $130 million in expanding its manufacturing facilities in the United States and Canada. The company aims to increase its capacity for high-layer-count PCBs and advanced technology products to meet the growing demand from key end markets.
Outlook for the North American PCB Industry
Continued Growth Expected in 2022
Looking ahead, the outlook for the North American PCB industry remains positive, with continued growth expected in 2022 and beyond. IPC forecasts that North American PCB sales will grow by 8-10% in 2022, driven by ongoing demand from the automotive, 5G, medical, and aerospace & defense sectors.
However, the industry will need to navigate the ongoing supply chain challenges and capacity constraints to fully capitalize on the growth opportunities. PCB manufacturers that can successfully manage their component supplies, expand their production capabilities, and maintain strong relationships with their customers will be well-positioned for success in the coming years.
Adoption of Advanced Technologies to Drive Long-Term Growth
In the longer term, the adoption of advanced technologies such as 5G, artificial intelligence (AI), and the Internet of Things (IoT) is expected to drive significant growth in the PCB industry. These technologies will require increasingly complex and high-performance PCBs, creating new opportunities for manufacturers that can deliver innovative and reliable products.
To stay competitive in this evolving landscape, North American PCB makers will need to invest in research and development, collaborate with their customers and suppliers, and continuously improve their manufacturing processes. By embracing advanced technologies and adapting to changing market demands, the industry can position itself for long-term growth and success.
Frequently Asked Questions (FAQ)
1. What is the current state of the North American PCB industry?
The North American PCB industry has experienced a strong rebound in sales and orders in 2021, driven by robust demand from key end markets such as automotive, 5G infrastructure, medical, and aerospace & defense. PCB sales grew by 15% year-over-year in Q1 2021 and 12% in Q2 2021, while the book-to-bill ratio has remained above 1.0 for five consecutive months, indicating strong demand.
2. What are the main drivers of PCB demand in North America?
The main drivers of PCB demand in North America include the automotive industry’s investment in vehicle electrification and ADAS, the ongoing rollout of 5G wireless infrastructure, and the resilience of the medical and aerospace & defense sectors. These end markets require increasingly complex and high-performance PCBs, creating significant growth opportunities for the industry.
3. What challenges is the North American PCB industry facing?
The North American PCB industry is facing supply chain challenges, including component shortages and price increases, as well as capacity constraints due to high demand. PCB manufacturers are working to mitigate these issues by securing adequate supplies of critical components, exploring alternative sourcing options, and investing in capacity expansions and equipment upgrades.
4. What is the outlook for the North American PCB industry?
The outlook for the North American PCB industry remains positive, with continued growth expected in 2022 and beyond. IPC forecasts that North American PCB sales will grow by 8-10% in 2022, driven by ongoing demand from key end markets. In the longer term, the adoption of advanced technologies such as 5G, AI, and IoT is expected to drive significant growth in the industry.
5. How can North American PCB manufacturers stay competitive in the evolving market?
To stay competitive in the evolving market, North American PCB manufacturers need to invest in research and development, collaborate with their customers and suppliers, and continuously improve their manufacturing processes. By embracing advanced technologies, adapting to changing market demands, and delivering innovative and reliable products, PCB makers can position themselves for long-term growth and success.
