Following four years of declining sales, the North American printed circuit board (PCB) market is expected to improve in 2015 and grow modestly through 2017, according to the IPC. The decline, which has been linked to slowing sales of rigid PCBs, has not been offset by increased demand for flexible PCBs, which has grown steadily over the past three years.
In 2014 the North American PCB market was estimated at $3.24 billion, according to IPC's 2015 Analysis and Forecast for the North American PCB Industry report. Like the rest of the electronics market, North American PCB makers have been challenged by offshore production. In the last 15 years, worldwide production of PCBs has increased approximately 41 percent, while North American production has shrunk by 75 percent. The North American share of world PCB production has decreased from 28 percent to 5 percent since 2000.
Relocation of production to Asia, as well as fast organic growth of the industry in Asia, has contributed to North America’s loss of share. Worldwide production of PCBs in 2014 is valued at an estimated $60.2 billion.
Growth in North American PCB production was -1.8 percent in nominal terms in 2014, the IPC reports. The size of the industry in the region, measured by the value of production, appears to have plateaued at around $3 billion. The steady decline seen in the first decade of this century was driven by the shift of high-volume manufacturing to low-cost regions, mainly in Asia, and by competition from low-cost producers abroad.
However, that trend appears to have run its course, according to IPC. The North American PCB industry is now focusing on niche markets and the production of high-reliability electronics. Customers in these markets are willing to pay more for high-quality products.
The North American PCB market has also experienced a shift in the vertical markets it serves, which may have impacted 2014 sales. The military and aerospace market is now the largest vertical PCB market segment in North America, accounting for 27 percent of PCB sales in 2014. The U.S. Department of Defense budget has been subject to sequestration over the past few years, which negatively affected many contractors to the U.S government.
The communications market is the second largest vertical in North America, IPC reports, capturing 24 percent of PCB sales; and the third largest vertical market for PCBs in North America is the medical and instrumentation market, which accounts for around 17 percent of sales. According to the IPC, PCB companies expect slight increases in shares of the military/aerospace and communications markets in 2015, and decreases in automotive and computer shares of the North American PCB market.
Overall, though, the medical/healthcare market is expected to show the most significant growth over the next few years as equipment becomes smaller and more portable. The wearables market, which is expected to surge along with the Internet of Things (IoT), is expected to have numerous applications in healthcare as breathing, heart rates, body temperature and other functions are monitored by wearable devices.
Domestic production to increase
U.S. imports of PCBs held steady in 2014, while PCB exports increased. A slight decrease in on-shore PCB production was seen in 2014, but the forecast is for modest growth of domestic PCB production in 2015 through 2017.
In 2014, rigid PCB production growth in North America was -0.9 percent and flexible circuit production growth was -8.1 percent. Rigid PCB production in North America represents an estimated 88.2 percent of the region’s production. Flexible circuits make up 11.8 percent of total PCB production value in North America as of 2014. (It should be noted that flexible circuit value includes some assembly.)
For more information or to purchase the 2015 Analysis and Forecast for the North American PCB Industry, visit www.ipc.org/PCB-Study-2015.