At the World Mobile Communications Conference in 2019, Huawei released the signal of leading a global 5G business, and the development of the 5G industry will bring stable growth momentum to relevant industries. PCB ink is used as an adhesive coating for printed circuit board (PCB), and its market scale and industrial development are inseparable from the PCB industry. The PCB ink market is expected to grow steadily as demand for the downstream industry of PCB—5G industry is rising.
Communication industry is influential with its market share
Photosensitive inks are more frequently used among all PCB inks, and are mainly used in various PCB products. Different types of PCB inks have slightly different functions, and main functions are transfer electronic circuit diagrams, covering precision electronic circuits and protecting them, preventing short circuits and preventing other metals from adhering.
PCB ink itself is a fine chemical product, which is inseparable from the electronic information industry in its use. It spans two industries and has high technical barrier. Like in other industries, PCB ink companies have to go through a process of small supply to a large-volume supply before establishing a cooperative relationship with downstream companies. Only after a long period of investigation, PCB inks enterprises may have the chance to be promoted to a supplier. Such customer resource barrier is the obstacle to the development of newly-entered and low-end enterprises.
The rapid changes in the downstream industry have put forward higher requirements for the PCB ink industry, and the industry concentration of PCB ink will gradually increase in the survival of the fittest. The development of science and technology is accelerating, and the industries of communication products, consumer electronics, and automotive electronics are changing with each passing day. And the upstream products of these industries are also constantly upgrading.
With the development of PCB in the direction of high density, high precision, high reliability, and light weight, PCB manufacturers are increasingly demanding ink quality, and customizing special inks for certain PCB products has become a common phenomenon in the industry. For PCB ink companies, only meeting the need on both quality and efficiency of PCB manufacturers can they continue to develop.
In 2018, the global market value of PCB ink exceeded $3 billion, and more than 90% of the market share was dominated by the top four companies. Among them, the Japanese Company Taiyo accounted for about 51%, and OTC from Taiwan accounted for 18%. And there are two enterprises from mainland China also ranked in the top four, namely Guangxin New Materials and Rongda.
Taiyo has dominated the PCB ink market for years
Since the industrial transfer in the 1980s, Japan's PCB industry has been a global leader with its technological advantages, which has made Japan a monopoly in the PCB ink industry. As a leading company in PCB inks, Taiyo has expanded globally since the 1990s. Through the establishment of subsidiaries in Korea, the United States, Taiwan, mainland China, Singapore, Thailand and other regions, Taiyo's overseas business has continued to expand and has gradually developed into a global enterprise.
In recent years, China's market share in the PCB industry has continued to increase, and Taiyo has seized the mainland China’s PCB ink market through several local subsidiaries. At present, the expansion of the Taiyo in mainland China has achieved remarkable results, and the proportion of regional business income in total operating income has been increasing continuously.
In 2018, the global PCB production value reached 63.6 billion US dollars. And China Taiwan still ranks first with a global market share of 31.3%. Under the high-speed growth, mainland China's share of the market has reached 23%, and it is expected to surpass China Taiwan in the next few years.
Mainland China has the potential to lead the PCB market
At present, mainland China has become the largest PCB market in the world, and it has an absolute advantage in the number of global top 100 PCB companies. These favorable conditions are helpful for the development of PCB ink companies in mainland China. However, despite its local advantages, mainland China’s enterprises will be subject to the leading companies that have seized the market through subsidiaries–Taiyo and OTC. Moreover, in the geographical comparison of the total operating revenue of the world's top 100 PCB ink companies, mainland China lags behind China Taiwan and Japan with a proportion of 20.4%.
Most of PCB ink TOP 100 are from Mainland China
As China's environmental protection policy is gradually overweight, the production of PCB ink, a fine chemical product, will face many restrictions. In the 5G era, the expansion of downstream demand directly led to an increase in demand for PCB inks. However, for a large number of small PCB ink companies that lack scientific research capabilities, environmental supervision will greatly affect their production.
Both Guangxin and Rongda have the capability to carry independent research and development. Therefore, these two enterprises are all able to increase production. Guangxin is advancing the project of “producing 8000 tons of photosensitive new materials annually”, and Rongda’s annual project of “outputing 10000 tons of PCB photosensitive ink” is also in process. These two mainland China’s leading enterprises may expand their market share in the construction of the 5G era.
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