Market Analysis – 32101508 – Multilayer circuit cards

Market Analysis Brief: Multilayer Circuit Cards (UNSPSC 32101508)

1. Executive Summary

The global multilayer circuit card market is a large and growing segment, projected to reach $115.4B in 2024 with a 3-year CAGR of est. 5.2%. Growth is driven by secular trends in 5G, automotive electrification, and AI, which demand increasingly complex and high-density boards. The single greatest threat to supply continuity is the extreme geopolitical risk stemming from heavy manufacturing concentration in Taiwan and Mainland China. This necessitates an immediate focus on supply chain diversification and risk mitigation strategies.

2. Market Size & Growth

The global market for multilayer printed circuit boards (PCBs), a subset of the total PCB market, is robust and expanding steadily. The primary demand comes from communications, computer/server, and automotive end-markets. The three largest geographic markets are 1. China, 2. Taiwan, and 3. South Korea, which collectively account for over 75% of global production.

[Source - Prismark Partners, Q1 2024]

3. Key Drivers & Constraints

1. Demand Driver: 5G & IoT Proliferation. The rollout of 5G infrastructure and the explosion of Internet of Things (IoT) devices require high-frequency, low-loss multilayer PCBs with advanced signal integrity, driving demand for premium materials and fabrication processes.
2. Demand Driver: Automotive Electrification & ADAS. The shift to electric vehicles (EVs) and Advanced Driver-Assistance Systems (ADAS) has significantly increased the PCB content per vehicle. These applications demand high-reliability, high-power, and high-temperature boards.
3. Demand Driver: AI & High-Performance Computing (HPC). Data centers, AI accelerators, and servers require very high layer count (>20 layers), high-density interconnect (HDI) boards, and complex IC substrates to support next-generation processors and memory.
4. Cost Constraint: Raw Material Volatility. Pricing for key inputs like copper foil, glass fabric, and epoxy resins is highly volatile and linked to global commodity markets, energy prices, and chemical precursor supply.
5. Supply Constraint: Geopolitical Concentration. Over 50% of global PCB production value is concentrated in Mainland China and Taiwan, creating significant supply chain risk from trade disputes, tariffs, and regional instability.
6. Technical Constraint: Miniaturization & Yield. As trace-and-space dimensions shrink and layer counts increase, manufacturing complexity rises exponentially. This puts pressure on fabricator yields, particularly for leading-edge designs, directly impacting cost and lead times.

4. Competitive Landscape

Barriers to entry are High due to immense capital intensity for advanced fabrication facilities (often >$1B), extensive process IP, and stringent quality certifications required for key industries like automotive and aerospace.

⮕ Tier 1 Leaders * Zhen Ding Technology (ZDT): Taiwan-based giant with massive scale; key supplier to Apple, specializing in HDI, flexible, and substrate-like PCBs (SLPs). * TTM Technologies: Top North American producer with strong focus on high-reliability applications in the aerospace & defense, automotive, and medical sectors. * Unimicron Technology: Taiwanese firm, a leader in high-layer count boards, HDI, and advanced IC substrates for CPUs and GPUs. * Ibiden: Japanese leader specializing in high-end IC package substrates for major semiconductor firms like Intel.

⮕ Emerging/Niche Players * AT&S: Austrian-based European leader, strong in high-end HDI for mobile devices and IC substrates for global semiconductor clients. * Sanmina Corporation: US-based EMS provider with strong in-house capabilities for complex, high-reliability backplanes and multilayer boards. * Kingboard Holdings: Hong Kong-based, vertically integrated from laminate materials to finished PCBs, offering a competitive cost position. * WUS Printed Circuit: Taiwan-based supplier with a strong focus on RF boards for networking, satellite communications, and automotive radar.

5. Pricing Mechanics

The price of a multilayer PCB is a complex function of design specifications and manufacturing inputs. The primary cost build-up consists of: 1) Raw Materials (laminate, copper foil, prepreg), 2) Process Consumables (drilling, plating, etching chemicals), 3) Labor & Overhead, and 4) Amortization of capital equipment. A significant factor is manufacturing yield; a complex, 18-layer board with a 70% final yield will be substantially more expensive than a simpler 8-layer board with a 95% yield.

Pricing is typically quoted per panel or per piece, with non-recurring engineering (NRE) and tooling charges amortized or billed separately. The three most volatile cost elements are raw materials, which have seen significant fluctuation.

• Copper Foil: +18% (LME Copper, trailing 12 months)
• Epoxy Resin: est. +12% (Linked to Brent crude and precursor chemical costs, trailing 12 months)
• Glass Fabric: est. +9% (Driven by natural gas prices used in production, trailing 12 months)

6. Recent Trends & Innovation

• Increased Investment in Reshoring (Q2 2023): Spurred by geopolitical concerns and government incentives like the U.S. CHIPS and Science Act, several firms, including TTM Technologies, have announced plans to expand or modernize high-end PCB fabrication capacity in North America.
• Adoption of Advanced Materials (Ongoing): A clear trend toward using ultra-low loss and high-thermal-conductivity dielectric materials is underway to support 224 Gbps+ data rates in servers and high-frequency performance in 5G/6G and automotive radar systems.
• Rise of Substrate-Like PCBs (SLP) (Q4 2023): High-end smartphone and wearable manufacturers are increasingly adopting mSAP (modified semi-additive process) technology to create SLPs, which bridge the gap between traditional HDI boards and IC substrates, enabling further miniaturization.
• M&A for Capability Tuck-ins (Q1 2024): The market continues to see strategic acquisitions focused on specific technologies. For example, larger players are acquiring smaller shops with specialized expertise in RF/microwave, flex circuits, or thermal management to round out their portfolios.

7. Supplier Landscape

8. Regional Focus: North Carolina (USA)

North Carolina presents a mixed landscape for multilayer PCB sourcing. Demand is strong, driven by the Research Triangle Park's concentration of telecom, computing, and life sciences firms, alongside a growing automotive and defense presence. However, local manufacturing capacity for high-volume, complex multilayer boards is limited compared to global hubs. The state's supply base consists primarily of smaller, quick-turn prototype shops and Printed Circuit Board Assembly (PCBA) providers rather than large-scale fabricators. While North Carolina offers a favorable business climate and tax incentives, sourcing high-volume production locally remains a challenge, though it is a prime candidate for future investment under federal reshoring initiatives.

9. Risk Outlook

10. Actionable Sourcing Recommendations

1. Regional Diversification. Mitigate the High geopolitical risk by qualifying a secondary supplier in a different region (e.g., Southeast Asia, Mexico, or a U.S.-based TTM facility) for at least one high-volume program within 12 months. Target a 70/30 volume allocation to secure supply continuity while maintaining cost leverage with the primary Asian supplier. This action directly addresses the critical concentration risk in Taiwan/China.

2. Implement Indexed Pricing. Counteract High price volatility by negotiating indexed pricing clauses in the next contract renewal for the top 3 suppliers. Tie pricing for copper foil and resin directly to published indices (e.g., LME Copper, ICIS Resin). This provides cost transparency, protects against unsubstantiated price hikes, and creates a predictable, formula-based mechanism for adjustments, moving away from purely discretionary supplier increases.