By Terry Costlow, IPC online editor
Oct 24, 2014
Things are looking up for the North American printed circuit board (PCB) market. Research and development (R&D) spending and production are rising, and the military/aerospace segment is coming back after some down years.
IPC’s just-published 2013-2014 Analysis & Forecast for the PCB Industry in North America is more upbeat than previous years. Though the overall market dipped slightly in 2013, the North American printed circuit board production forecast is one of the positive aspects. The report predicts moderate, steady growth through 2017. That’s partially because one of the major markets is bouncing back after a slowdown.
“In the last couple years, the military/aerospace market has fallen off because of the cuts in military spending,” said Sharon Starr, IPC director of market research. “That’s coming back now.”
Military spending in the United States is picking up, as are commercial aircraft markets. Noted aircraft analyst Richard Aboulafia of Teal Group predicts solid growth in jetliners and regional aircraft over the next few years, although other commercial aircraft market segments will hit a plateau. However, even a flat market is a big improvement over declines seen in the past few years.
The resurgence in military spending and rising jetliner sales are helping make the military/aerospace market the largest vertical market for PCBs in North America. This year, it’s predicted to surpass the communications market, which has seen a decline. Together, communications and military/aerospace are the two largest printed circuit board markets in North America, accounting for approximately 57 percent of the North American PCB market in 2013, Starr noted.
Increased R&D spending is another driver behind the upbeat outlook for the PCB market.
“R&D has been stagnant for the last few years, but R&D spending for both rigid and flexible circuits is going up,” said Starr.
In 2012 and 2013, R&D for rigid PCBs in North America was approximately 3.5 percent of sales. The flexible circuit industry invested 2.2 percent of sales in 2012 and 2.8 percent last year.
“Both are expected to rise by at least 0.7 percentage points in 2014,” Starr added. “As a percentage of the industry’s total revenue, that rise accounts for a lot of new spending.”
Growth was quite solid for flexible circuit sales, which increased 2.1 percent in 2013. Among PCB product types, HDI/microvia boards enjoyed the highest growth rate in 2013.
The North American market is seeing an increased flow across borders. Last year, more than half of U.S. rigid PCB exports went to Mexico. That follows the trend of the past few years, with steadily increasing exports to Mexico.
“Mexico’s assembly business is big and growing,” Starr said. “A lot of North American OEMs and EMS companies have operations in Mexico. Many of the products assembled there come back to the United States.”