Tension over PCB prices and lead times

Paris, May 17, 2017 – Printed circuit board manufacturers have been experiencing significant price increases for several months now. The pressure on copper is directly reflected in a 15-20% increase in the price of related consumables. Raw materials prices are up overall by 8%, with some items even more critical, such as laminates, which are up by 15 to 25% depending on the supplier, and gold salts, which are up by 10%. Unfortunately, these factors make an increase in finished PCB prices inevitable.

At the same time, several factors are contributing to longer lead times:

– After a decade of sharp decline, 2016 saw a return to growth for French manufacturers of around +6%, thanks to actions undertaken by them with the support of the public authorities and rising demand linked to healthy Mil/Aerospace markets,
– pressure from customers to meet ever tighter deadlines, combined with the growing complexity of the circuits to be manufactured, is having an impact on both manufacturers and subcontractors,
– As a result, PCB manufacturers are demanding longer lead times from their suppliers, with some materials manufacturers announcing an increase in supply lead times of 2 to 3 weeks, as well as a heavy load on these manufacturers’ production tools.

Numerous plant closures by manufacturers over the last fifteen years have led to a decline in capacity, despite investments in plant capacity and innovation.

Printed circuit boards are not off-the-shelf products, and the best way to limit difficulties or tensions is to communicate reliable forecasts and visibility to manufacturers, which is becoming increasingly difficult to obtain. This is particularly true for French production, which is mostly multi-unit products rather than recurring series.