'In the current disrupted supply market, it is vital to choose a supplier that is flexible and has the resources necessary to not only offer you good value but also provide an uninterrupted supply of PCBs.'
The PCB market is expected to grow at a rate of 4.3% (CAGR) over the next five years. The current disrupted PCB supply market demonstrates a need for technology businesses to investigate alternative supply options to maintain stability and a continuous, uninterrupted supply of PCBs.
Contributing factors - cost and supply
The recent increases in the price of raw materials have certainly had their effect on finished board costs. These increases are, of course, impossible to avoid when you look at the cost rises of Copper, CCL, Prepegs, Gold for ENIG and other production materials. In some cases, percentage increases of these raw materials are reported to be as much as 35%. The finished PCB cost is dependent on the type of PCB, and the industry is seeing cost increases range from 10% -15%, dependent on the number of layers required.
The industry may still see further finished board price increases, with yet more material price rises and the greater demand for PCBs being the driving force behind it. Asian manufacturers are increasing lead times. The Chinese economy has recovered strongly from the pandemic, and production is increasing month on month. Manufacturing for Chinese domestic PCBs currently exceeds export orders. This goes on to further the uncertainty around the supply chain, with lead times extending beyond expectations. Accompany this with a delayed freight clearance into Europe and the UK, which culminates in further delay; you do have numerous contributing factors that all serve to disrupt and create a sense of nervousness for the global technology sector.
Price increases due to raw material costs are an evolving inevitability, and of course, that affects the whole market. However, the disruption in the supply of PCBs shouldn't be something technology companies should accept as a given. Choosing the right partner and reducing exposure is now a priority for many businesses.
In this market, benchmarking price/lead time comparison exercises are becoming more common. It is a scenario that is very typical of a disrupted market with businesses looking to make sure they are getting the best deal from their PCBs procurement. However, the desire for flexibility and continuity means that those suppliers who can demonstrate value and a solid and broad infrastructure towards fulfilling a demanding supply chain are the PCB manufacturers many technology companies are migrating towards. The technology sector is always looking for value, and that value is based on cost and stability. Indeed, the desire is for as little disruption as possible where business continuity is concerned.
So how can DK-Daleba alleviate the disruption for our customers?
With our UK and global manufacturing base and vast network of Asian production partners, we have provided that much-needed continuity. In turn, this delivers the very best value for our customers with the assurance we can meet their lead times. The continuity we have injected, along with an attractive price point and added value of having a robust stock management process, has allowed DK-Daleba to instil some respite into a nervous market. It is a market that is increasingly becoming saddled with uncertainty due to the issues raised in this article. This is very much in line with the conversation we are having with new customers.
Holding 6 million boards in stock for customers at any one time and the flexibility of a global manufacturing network provides that level of stability technology companies need in a market that has not yet indicated it will settle anytime soon.
Date : 15-04-2021