Thomas Index Report: Printed Circuit Board Sourcing Trends
Shawn Fitzgerald July 27, 2017
More B2B buying activity takes place on THOMASNET.com than any other resource on the planet. In fact, a buyer evaluates a supplier every 2 seconds on our platform.
To help buyers and suppliers stay ahead of the latest shifts and emerging trends in the digital industrial economy, we constantly analyze all of the buying activity taking place on the platform. This powerful, proprietary data fuels the Thomas Industrial Index.
Here’s what we’re seeing on the Index this week:
Our data shows that sourcing activity for Printed Circuit Boards has increased sharply in recent months. In fact, over the last 90 days alone, buyers and engineers have evaluated suppliers 25% more than the all-time average.
The trend shows no signs of slowing down – just last week, supplier evaluation activity reached an all-time high of 78% above the all-time average!
What’s contributing to the surge in PCB sourcing? Let’s take a look at the details behind the data.
There are five main components used in the manufacturing of PCBs: aluminum, glass fabric, resin, solvent and copper foil. That last item – copper foil – is currently in short supply around the globe. According to industry reports, global demand for copper foil sheets is greater than 516,000 tons per year. Unfortunately, just 480,000 tons are manufactured annually. This equates to a shortage of 36,000 tons of copper foil a year, or 2.8 million copper foil sheets every month.
To put this shortage in perspective, Mark Goodwin, COO of Ventec International Group, said that “this is approximately 2x the total rigid demand of USA and Europe combined.”
Manufacturers are having a tough time sourcing the copper they need to make PCBs in a timely and cost-efficient manner. Unfortunately, this is a trend that’s likely to continue.
That’s because copper foil is a key component in the production of lithium ion batteries, which are used in electric vehicles. With companies like Tesla and Volvo committing more money and more production capacity to electric vehicles, along with new electric car manufacturers entering the market, and the Chinese government incentivizing production, the demand for lithium ion batteries (and, in turn, copper foil) will continue to rise.
Furthermore, because these batteries require a higher quality of copper foil than PCBs, suppliers can sell to the electric vehicle market at higher margins. Not surprisingly, that’s where they are focusing their efforts – and their inventory.
This is a classic example of scarcity driving the market, and PCBs manufacturers are being forced to adapt in order to meet production demands.
To find out how the copper foil shortage is impacting manufacturers, we caught up with Stephen Gillissie, Marketing Director at VR Industries, a full-service electronic contract manufacturer based in Rhode Island.
He pointed out that the growing popularity of electronic vehicles isn’t the only factor contributing to the shortage of copper foil. The material is also used in another booming sector of the economy – renewable energy.
As a result of the copper shortfall, Stephen says that industry lead times for PCBs have increased from 4 weeks to an average of 8-10 weeks. He believes the spike in buying activity is a sign that buyers are looking for faster lead times.
To help close the gap, Stephen suggests that manufacturers leverage their creative engineering and design skills in order to minimize the total amount of copper foil needed for each board.
“Electrical engineers and designers will need to get creative in how they design PCBs in the future,” he said. “As copper continues to be a sparse high-demand resource, boards need to be designed to use less copper or alternative metals. Printed circuit boards are a necessary component for electric cars, solar energy and wind panels. The demand for renewable energy is not going away.”
Take Advantage Of The Trend
Thanks to the copper foil shortage, the market is primed for PCB suppliers who can meet capacity. If you’re one of them, the time to take advantage of the opportunity is now. Put your business in front of the buyers who need you — get listed on THOMASNET.com.
If you are a PCB buyer or are looking for new additions to your supply chain, register for free full access to the THOMASNET.com platform or start using it now by clicking the button below!
Did you find this useful?