PCB manufacturers suffered the problem of rising raw material costs

The printed circuit board (PCB) manufacturers resolve overcapacity and weak demand problems, when at the same time, Thin copper foil costs are also rising. Deutsche Bank Securities analyst Chris Whitmore said in a recent report: "the United States continued to decline in the price of PCB, however, the sheet copper prices are rising. PCB manufacturers will be difficult to pass on raw material prices to customers, which will eventually lead to further reduce the profits of manufacturers."


The magnitude of the current price increase is not clear. Whitmore pointed out that the current price of copper foil of copper foil manufacturer mainly from asia. Over the past few months, they have raised prices by 20%-40%. He said: "the Asian manufacturers are combined together to foil customers, increase product prices." Whitmore said that this change is affecting the printed circuit board manufacturer Huatong computer companies such as the largest in Taiwan, the company said that May only copper foil, copper foil, epoxy resin, glass prices rose 20% to 25%.


However, some North American PCB manufacturers believe that this is only a regional problem, and they did not find copper prices continue to rise. Brown Janie, chief financial officer Merix PCB said: "we know that Asian manufacturers and suppliers are improving sheet products such as price, but we are not buying sheet from Asian manufacturers, Merix company has been buying sheet from North America, has not found the supplier to improve the price." Sanmina-SCI PCB, senior vice president and chief technology officer Dudnikov George also pointed out: our global sourcing center is in Malaysia, and did not perceive the rise in the price of sheet." Swain TTM, vice president of sales and marketing at Clay, said: "we've heard rumors about price increases, but our suppliers are not taking action".


But Whitmore points out that many PCB manufacturers in the United States are buying copper and epoxy glass from a small number of Asian suppliers. The rise in raw material prices is only a matter of time. He said: "like copper foil manufacturing industry, epoxy glass industry is mainly controlled by the major manufacturers of a few, and they are the successful implementation of price strategy."


The reason for the price rise has also aroused public controversy. Some think this is a focus on the Asian metal sheet industry, while others believe that it is difficult to fund these suppliers, so the cost increase caused by the cost of their raw material suppliers is difficult to transfer out.


"The cost of copper is up," says Custer Custer, President of Walter consulting, a company that also wants to raise prices. PCB manufacturers generally have a loss, while the thin sheet is the largest of their purchases." Park electric chemical company senior vice president of finance Stamer Murray said the cost of the thin sheet accounted for 10%-15%. Stamer declined to discuss Park's price strategy, but said the company was struggling with the economic downturn. Park company mainly produces advanced electronic materials for multilayer PCB board. In March, Park closed its manufacturing plant in Cologne, Germany, after a customer turned to its S.A. Nelco manufacturing plant in Paris and ended its business relationship with another company. Last week, Park unveiled plans to restructure its US operations, including large manufacturing plants in Fullerton and Newburgh. Stamer said: "at present we do not have enough business in North America to support two major factories. Companies will be transferred to the West Coast manufacturing plant, in order to improve efficiency. We are based on the scale of production to continue Newburgh manufacturing plant."


Bouska Gerald, a former Marketing Manager at the sheet industry, points out that PCB firms will find themselves stuck in the rising price of raw materials as the whole region is under the same pressure. "Chip makers are trying to raise prices because they are in a state of loss," says Bouska. For PCB manufacturers, it is very difficult to transfer these increased costs to customers. Because of the large number of PCB manufacturers will not allow the price pressure to the original equipment manufacturers."

 

(Source: Inside information)

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