NTI-100 Report 2022

Once again we present the legendary NTI-100 report by Dr. Hayao Nakahara, who began documenting global PCB production every year 26 years ago. His comprehensive and detailed data is second to none. Dr. Nakahara's report for the year 2022 is also full of surprises.

Introduction

This is the 26th NTI-100 report. As in previous years, one broad conclusion is that 'big will get bigger and faster'. Due to the favorable exchange rates for the dollar in 2022, the author expected some changes in the ranking, but it was roughly similar to that of 2021.

Japanese manufacturers surprised the author

Japanese manufacturers surprised the author. Their position remains almost unchanged compared to 2021 despite a 20% fall in the value of the yen against the dollar in the world. Domestic customers wanted to source PCBs from their own country due to the supply chain disruption in China, which led to a good order intake.

As in the past, the author would like to thank various trade organizations and many companies and friends who provided important information that made the preparation of this report possible. The author is fully responsible for any errors in this report.

Exchange rates

As can be seen in Table 1, there were wild currency fluctuations in 2022. Five currencies lost more than 10% of their value against the dollar. The Japanese yen lost 20% of its value. At the time of writing, the exchange rate is 146 ¥ / $. Due to the lower exchange rate of the yen, the number of foreign tourists traveling to Japan is higher than at its peak before the Covid-19 pandemic.

The author started investigating NTI-100 26 years ago

The author began researching NTI-100 26 years ago to learn more about global PCB production. NTI-100 is a by-product of this study. The author has grown weary of it because there are many mergers and acquisitions around the world and it is becoming increasingly difficult to capture all of this mergers and acquisitions (M&A) activity that is important to the compilation of NTI-100.

The most difficult area is China. They may not be that complicated for Chinese, but for this writer, many manufacturers in China are difficult to assess when it comes to financial reports.

Targeted guessing was necessary, and the need for such targeted guessing becomes a source of error. Ranking is relative. So don't take it too seriously.

Ranking

This year's NTI 100 report contains rankings for the largest manufacturers. If you look closely, you can see the trend of big getting bigger and faster.

... big gets bigger and faster ...

IC-PKG substrate manufacturers performed well in 2022, with the exception of Ibiden and Shinko Electric, as these two manufacturers were heavily dependent on Intel, which performed poorly in the last half of 2022 due to poor PC sales. In the first half of 2023, the semiconductor business was still poor. There are signs of recovery in July, but the increase in sales is moderate. However, the semiconductor business is expected to increase in 2024 and be stronger in 2025.

Good news for the manufacturers of IC-PKG substrates

In 2022, IC-PKG substrates accounted for just over 20% of total PCB production in terms of value. Manufacturers of printed circuit boards for the automotive industry also enjoyed good business in 2022, as sales of electric vehicles increased sharply. However, the price war in China is said to have been almost 'ugly'. New entrants to the sector are cutting prices to capture the market, cutting into the profits of traditional PCB manufacturers. Strong sales of PCs, tablets, smartphones, etc., triggered by pandemic-related remote working and studying in 2020-2021, led to a mini-boom in these products. However, the boom ended in 2022 and as a result, motherboard manufacturers for these products performed poorly in 2022.

There are several manufacturers that 'disappeared' between 2021 to 2022. Please compare NTI-100 2021 and 2022. Some lost revenue in local currencies, others because of exchange rates.

(Unit: million $ / annual average 2022 exchange rates)
(Dr. Hayao Nakahara/N.T. Information Ltd, August 2023)

(Unit: million $ / annual average 2022 exchange rates)
(Dr. Hayao Nakahara/N.T. Information Ltd, August 2023)

(Unit: million $ / annual average 2022 exchange rates)
(Dr. Hayao Nakahara/N.T. Information Ltd, August 2023)

(Unit: million $ / annual average 2022 exchange rates)
(Dr. Hayao Nakahara/N.T. Information Ltd, August 2023)

(Unit: million $ / annual average 2022 exchange rates)
(Dr. Hayao Nakahara/N.T. Information Ltd, August 2023)

(Unit: million $ / annual average 2022 exchange rates)
(Dr. Hayao Nakahara/N.T. Information Ltd, August 2023)

2022 Average exchange rate 131.43 Yen/$
(N.T. Information Ltd, August 2023)

Ceramic circuits are not included in these tables.

Brief analysis

There are nine manufacturers spending more than $2,000 million in 2022 and 28 manufacturers with sales of more than $1,000 million, three more than in 2021. This is despite the currency losses of all countries against the dollar, with the exception of the US.

Taiwan's production of $30,306 million and China's $26,085 million account for 65% of the total production of 139 manufacturers in 2022. As recently as the 1980s, the combined production of these two countries was negligible. They will continue to increase their share of global production, considering their continuous investment, much of which is in Thailand. In fact, all of Taiwan's leading PCB manufacturers are building new factories in Thailand, although a few are also investing in Malaysia and Vietnam.

Zhen Ding Tech accounts for 6% of global production. The company's chairman stated that ZDT aims to account for 10% of global PCB production by 2030.

(N.T. Information Ltd)

(N.T. Information Ltd, March 2023)

Zhen Ding Technology or ZDT for short (瑧鼎科技) is listed on the Taiwan Stock Exchange. The turnover shown here is the consolidated turnover of the company. ZDT is also listed on the Shenzhen Stock Exchange and is called Avary Holdings (鵬鼎控股). Avary Holdings only reports revenue generated in China and does not include its IC PKG substrate subsidiary Leading Tech (礼鼎半導体). Its website is www.leadingics.com. Leading Tech is to be listed separately. ZDT has another subsidiary, Boardtek in Taiwan, which ZDT bought a few years ago. Boardtek specializes in high-frequency PCBs and is one of the leading manufacturers of automotive PCBs for radars. Leading Tech achieved a turnover of 180 million dollars (exclusively with ICPKG substrates). LG Innotek suffered a drop in sales. The author does not know why.

The 139 largest manufacturers will produce $87,000 million in 2022. The author estimates that the remaining 2,400 manufacturers will produce about $10,000 million. Therefore, the total output in 2022 is estimated to be about $97,000 million, of which $9,000 million comes from the PCB manufacturers' assembly business, i.e. the total 'bare board' output in 2022 is $89,000 million, of which $17,700 million comes from IC PKG substrates. In other words, the share of IC PKG substrates in total PCB production in 2022 was about 20%.

IC PKG substrate manufacturers are investing around $30 billion over the next few years. If these investments are channeled into the production of substrates, it is conceivable that IC PKG substrates will account for up to 25% of total PCB production in the future.

Japan's production appears low because the conversion from Japanese yen to $ was made using the exchange rate of 131.43 ¥/$.

Taiwan and China (61,600) together account for 63.2% of global production
(N.T. Information Ltd, March 2023)

(unit: million $)
(N.T. Information Ltd)

Using the 2021 exchange rate, the $4,100 million would have become $5,020 million. To compare the production of different countries, it is necessary to use a common currency. Traditionally, the comparison is made using the dollar, which unfortunately distorts the picture.

The following table shows the author's forecast for the production of IC PKG substrates according to the 2022 exchange rate. If exchange rates return to the 2021 rate level, $22,000 million in 2025 could then become $25,000. The author often wonders what exchange rates forecasters around the world are using!

(N.T. Information Ltd, August 2023)

Translation: Markolf Hoffmann