Where is the Indian PCB Industry headed?

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Where does the Indian PCB industry stand today? What are the factors that will drive its growth and what will hinder it? We tried to figure out the answers to these questions, and here is a collation of our findings.

By the ComConnect Consulting research team

Printed circuit boards (PCBs)are made up of one or more layers of copper laminated non-conductive material. A PCB mechanically supports and electrically connects electronic and electrical components using conductive tracks, pads and other features etched on it.
Printed circuit boards (PCBs) are the backbone of all electronic products, ranging from consumer products such as PCs, tablets, smartphones and gaming consoles to industrial and high-tech products in the strategic and medical electronics domains.

The Indian electronics market is one of the fastest growing in the world, having crossed US$ 140 billion in 2016 and is anticipated to reach the magical figure of US$ 400 billion in 2022, with domestic electronics manufacturing climbing to over US$ 100 billion. This will create tremendous opportunities for PCB manufacturers. Considering this booming market as well as the recent government policies like ‘Make in India’ and ‘Smart Cities’, the PCB market in India is expected to reach new heights.

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Market opportunities
The global PCB market was valued at US$ 63.1 billion in 2017 and is expected to reach US$ 76.9 billion by 2024, at a CAGR of 3.1 per cent as per a report published by Energias Market Research. The key factors driving the growth of this market are:

  • The increasing adoption of automation in various end user industries
  • The growing demand for wireless devices
  • The miniaturisation of devices and the need for more efficient interconnect solutions
  • Higher demand for flexible circuits

With more processors and sensors being used in smart gadgets, the size of the PCBs has reduced by approximately 25 per cent, across devices. And the use of flame-retardant chemicals in PCBs has become mainstream, to comply with safety standards.

Overall, the increasing capital investments in this sector are augmenting the market’s growth. The dynamic growth in the PCB market is also due to the increasing demand for tablets and smartphones in the IT and consumer electronics sector. Growth in wearable electronics is also emerging as a key opportunity in the global PCB market.

According to an ELCINA study, in India, the demand for PCBs will grow at a CAGR of 20.56 per cent in the 2015-2020 period and will cross US$ 6 billion by 2020 (Figure 1).

Figure 1: Estimated demand for PCBs in India across different sectors (Source: ELCINA)

The growth of the Indian PCB market will most likely be driven by the consumer electronics, mobile phones and computer hardware products segment (Figure 2), followed by requirements from the industrial (Figure 3) and LED lighting segments (Figure 4).

Figure 2: Demand for PCBs by 2020 – for use in consumer electronics, mobile phones and computer hardware (Source: ELCINA)

The different types of PCBs required in the Indian electronics industry are:

  • Single-sided (SS) PCBs
  • Double-sided (DS) PCBs
  • Multi-layer ( ML) PCBs
  • Others (including flexible PCBs and LED PCBs)

The total demand for PCBs in the Indian market in 2020 is expected to touch 73.44 million sqm (Figure 5).

Miniaturisation of semiconductor devices and enhanced functionality in electronic products is expected to drive the demand for more complex PCBs, which have more layers, in large volumes. There is a possibility of demand arising out of advances in technology such as high-density interconnection (HDI). This enables more interconnection functions per unit area, which will positively impact the market for advanced-level applications. In addition, the recent thrust towards indigenisation in strategic electronics manufacturing is likely to fuel the demand for high-grade multi-layered PCBs.

Figure 3: Demand for PCBs by 2020 – for use in telecom, industrial and strategic/defence electronics sectors (Source: ELCINA)

Domestic capabilities
Currently, only 35 per cent of the demand for PCBs in India is met by local manufacturers. And for the remaining 65 per cent, India is still dependent on imports. The current demand of US$ 2.38 billion represents the combined demand for both the bare board PCBs and the populated PCBs. The current market size for bare board PCBs is US$ 1.2 billion – and only 30 per cent of this demand is being met by local PCB manufacturers, with the remaining 70 per cent being imported.

Figure 4: Demand for PCBs by 2020 – for use in automotive electronics and LED lighting (Source: ELCINA)

However, the Indian market is slightly different from the rest of the world. Globally, the market for flexible circuits is expected to grow much faster than that for rigid PCBs, since in the case of the former, sizes can be reduced and connectors eliminated. However, Indian PCB manufacturers are mostly focused on single-sided/double-sided PCBs and multi-layer PCBs (with a layer count of four-six, in most cases). Most Indian manufacturers adopt the ‘high mix – medium volume’ strategy, in which different types of PCBs are manufactured in low to medium volumes. There are around 200 PCB manufacturers in India, and more than 60 per cent of them are very small and in the unorganised sector.

Figure 5: Different types of PCBs in demand in the Indian market (Source: ELCINA)

PCB manufacturers in the country mostly fall into the following categories:

  1. Large-volume manufacturers (mostly double-sided PCB makers, and a few that produce a good amount of multi-layered PCBs)
  2. Small-volume manufacturers (both double-sided PCB makers and a few who produce multi-layered PCBs)
  3. Small-volume fast-delivery manufacturers (both double-sided PCB makers and a few who produce multi-layered PCBs)
  4. Small-volume complex-design PCB manufacturers

Emerging market trends
The global PCB market is evolving rapidly. Some of the trends that are going to shape the market are as follows*.

  • Multi-layer PCBs dominated the global market in 2017, and this segment is expected to grow at the fastest rate during the next few years.
  • With regard to the type of substrate, the HDI segment will continue to have the major market share. Rigid-flex PCBs are likely to register the highest CAGR during 2017-2024, owing to the increasing demand for display applications and the rising adoption of smartphones.
  • Regarding the type of PCB laminate, the FR-4 dominates the global PCB market in terms of value, at present. This material provides cost-effective and reliable solutions for various designs.
  • The communications segment used the most PCBs in 2017, owing to the increased adoption of digital devices such as mobiles, network equipment, power distribution systems, amplifiers, routers, etc. The automotive segment is expected to grow at the fastest rate during the next few years.

*(Source: Energias Market Research report)

What’s next?
The Indian PCB industry will be able to achieve sustainable growth if the government helps to create a level playing field and hastens growth by implementing the right duty structures, while ensuring the availability of infrastructural and logistics facilities.

Given that there is a huge domestic demand for electronics products, such moves by the government will help not just the PCB industry but the entire electronics ecosystem to achieve long-term sustainable growth in line with the Make in India initiative.

However, the industry needs to consider the growing concerns with respect to the environment, due to the use of toxic chemicals when manufacturing PCBs. The inability to recycle materials in the current manufacturing processes adds to these concerns. To bring down the release of toxic emissions into the environment, inkjet printing technology is now being used in the manufacture of PCBs. This technology enables the cost-effective manufacturing of thin, flexible and disposable electronic devices.

Key challenges faced by the Indian PCB industry
Currently, the output of the Indian PCB industry is less than 1 per cent of the total global market. Major challenges that PCB manufacturers in the country face are:

  • Inefficient supply chain for raw materials
  • High capex requirements
  • Lack of access to new technologies and state-of-art manufacturing facilities
  • Unfair playing field, since companies from competing countries have access to finance at a much lower cost
  • Logistics inefficiencies and infrastructural bottlenecks, resulting in greater turnaround time and costs
  • Conflicting policies that are in operation across the various levels within the electronics industry, from the components segment to finished products
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