The Impact of Japan 311 Earthquake on Taiwan’s Electronics Industry and the Future Trend of PCB Industry in Taiwan
Date Issued
2011
Date
2011
Author(s)
Tsai, Shin-Hui
Abstract
This research studies the impact of 311 earthquake in Japan on high-tech industry and the consequent influence on worldwide development of PCB industry, topped off with the discussion of how PCB will evolve with the progress of electronic products. PCB is hailed as “the mother of electronic system products” for the reason that it is an indispensible key component in electronic products. Japan is the leading country in global PCB industry and it is the primary production country of high-end PCB materials.
The 311 earthquake’s biggest impact on high-tech industry in Taiwan is the semiconductor industry, while that on electronic key components mainly goes to PCB industry. Fortunately, PCB firms in Japan are able to deploy their capacity from plants in overseas to temporarily make up for the shortage. Besides, because the technology gap in flexible PCB between Taiwan and Japan is shortened and global business configuration is flexible, 311 earthquake in Japan is a propeller that drives firms in Taiwan entering global supply chain. However, facing the threat from Korean firms in flexible PCB industry, firms in Taiwan should actively enhance their technology and be certified. As far as the raw materials in the upstream concerned, firms in Taiwan have been developing high-end copper for a long time and many clients are willing to use products from Taiwan, leading to the phenomenon of order transfers in related high-end products. As for CCL, BT resin for IC substrate suffered the most from the 311 earthquake in Japan, makes the IC substrate firms realize the importance of increasing the number of suppliers and risk diversification. The order transfer phenomenon has gradually become long term supply relationship, wherein Nan Ya Corporation in Taiwan has been certified by international PCB company, wishing that firms in Taiwan should actively develop high-end products.
In the discussion of future development of PCB firms in Taiwan via the trend of thriving electronics products, because the competition among traditional cell phones, PDAs and PNDs erodes the market of smart phones and smart phone firms employ price-cutting strategy by lowering the cost of components. There are orders transferred from Japan to Taiwan, resulting in the tremendous increase in market share of PCB for smart phone use. As for laptops, PCB manufacturers in Taiwan are able to produce both HDI and MLB, and Taiwan accounts for approximately 65% of laptop PCBs, the largest worldwide. Recently, the Ultrabook models’ demand for HDI is a new business opportunity for firms in Taiwan and that can be regarded as a chance for these firms to increase the market share of PCB for laptops. In Taiwan, Hann Star Board Corporation and Gold Circuit Electronics account for 50% of global PCB for laptops and are cost efficient due to economies of production scale.
From 1998 to 2010, Taiwan PCB firms increase from 2 to 5 in global top 20 and production raises from US 0.9 billion to US 7 billion. Although several electronics parts and materials are procured from Japan, Japanese copper, glass fiber/yarn and CCL have set up capacity in Taiwan and thus lower Taiwan’s dependence on Japan.
This study suggests that Taiwan’s PCB industry has reached a very mature stage, not only the value ranking second worldwide, but the supply chain is complete. However, there are still several special materials rely on the import form Japan, and thus firms in Taiwan should enhance the production ability in key materials such as BT resin in an attempt to escape the constraints from foreign monopolistic suppliers. Thus the 311 earthquake in Japan offers the opportunity for Taiwan’s PCB industry to establish strategic alliance with Japanese suppliers in order to consolidate supply of those materials and also to learn their technology. Meanwhile, other than the enhancement of PCB technology, firms in Taiwan should keep an eye on the future development of end products to cater to their demand. This way, Taiwan PCB industry is expected to replace Japan as the leading PCB country in the near future.
Subjects
PCB, industry analysis, supply chain, 311 earthquake in Japan, electronic component, electronic parts and materials, electronics industry
Type
thesis
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