The history and future of China Shenzhen PCB manufacturing industry (part 1)

In 1978, China shenzhen was in the wave of market economy development and became the first attempter of Chinese enterprises market-oriented reform. As the high-end electronic components , the PCB manufacturing industry began to sprout here;In the 1990s, along with the rapid development of China electronics industry, especially in the Pearl River Delta region, Shenzhen PCB industry has become one of the region where PCB fabrication was developed the earliest in China; PCB factories were the most concentrated; industrial chain was the most perfect. Entering the new century, the global industry transfer is up to peak, and China PCB manufacturing industry has become the world’s largest production base. In shenzhen, from the military level to universal PCB, you can find the most cutting-edge, the most rapid development, the most competitive PCB manufacturers here. Now, in the cost consideration of the environmental protection, human resources and in industrial land, China shenzhen PCB factories begin to move to the Chian mainland and southeast Asia. Another wave of industrial transfer has been started.Where should the China Shenzhen PCB industry go? where is the future opportunities? We enumerate the past experience and lessons, and hope to find the road of sustainable development of the industry in the future.

Three decades’ Industry development,from catching up to surpassing

In the economic structure of Shenzhen, the status of the electronic manufacturing industry is important. Among them, PCB manufacturing industry is the core engine that once pushed the development of Shenzhen electronics industry. At the same time it also reflects the whole development of manufacturing industry. After experiencing the glory of processing and technology Introduction, PCB manufacturing industry has to face the concerns of industrial relocation and transformation .

In the early 1980s, Shenzhen decided to develop the electronic industry .Then, more than 20 processing factories were born in Shenzhen. Most of the money of these enterprises was from Hong Kong, and those technologies were from Japan, and in this way, the first batch of PCB manufacturers in shenzhen establishied the industry foundation. On October 20, 1980, the city government approved industry of shenzhen, China zhenhua electronic company and Hongkong Lushi Industrial Co. Ltd established a joint venture company,Huafeng Electronics CO.,LTD, including the TV production line and PCB production line. In 1984, with the backgroud of military enterprise, Shenzhen shennan circuit co., LTD was set up, and joined in printed circuit board manufacturing industry. In May 1985, the pcb business division of the Japanese sanyo (shekou) co., LTD., was formally established and put into production.In 1986, kingfung started the project and they put into PCB production in the following year, which push the trend of importing PCB production line, and at the period ,the technology introduction made the foundation of PCB’s development of Shenzhen.

After entering the 90 s, the international electronic information industry began to mass transfer to developing countries and regions. Shenzhen seized this historic opportunity, and directly led to the “strong position of electronics manufacturing”, and driven by the electronic information industry, The industry star enterprises of Shenzhen PCB industry have started the stage. Not only the large-scale enterprises based on Hong Kong and Taiwan-funded invested in the construction of building factories, the domestic Shennan Circuits, Wuzhou Circuit, JingWang electronics, Suntak, Bomin began to grow up rapidly.

After 2000, China PCB industry ushered the period of the prosperity development, while the PCB industry of shenzhen entered The scene of prosperity that had a beautiful future.In 2006, China became the world’s largest PCB production base, and industry malaise began to emerge:environmental issues, rising costs, heated market competition.The small profit era was coming.After the 2008 financial crisis, the coastal city has plan to moved out manufacturing industy. the pattern of China PCB industry changed. Shenzhen also inevitably faced with the pains and choices of transformation.

30 years, from the catch-up to transcendence, China PCB manufacturing industry growed to the prosperity.The Pearl River Delta region is one of the zones where China PCB industry was earliest developped; the industries is most gathered; machines was most perfect.Under the promising situation of strong order demand in both domestic and foreign markets, the pcb industry also obtained the unprecedented opportunities, especially the private PCB factories developped with the incredible speed of expansion, doubled the output value,from several million to tens of millions to hundreds of millions, billions.They have become China’s leading PCB enterprises. Some also went to public markets.

The history and future of China Shenzhen PCB manufacturing industry (part 2)

The industry’s cross and reconstruction in the next decade

Entering the second decade of the 21th century, with the sustainable development of the electronic information industry, especially  a new generation of information technology industry, the global PCB industry has been in a steady rise .According to data of Prismark which is a  electronics industry consulting company in the United States, the value of global electronic products in 2011 was 1.597 trillion, the growth rate of 9.5%. Among them, computer, communication and consumer electronics accounted for two-thirds of the market.In 2012,global electronics production growth rate was flat and picked up.In 2016, the value of global electronic product output  will reach $2.099 trillion.From 2011 to 2016, the compound average annual growth rate is 5.6%, it is the key to predict  the developping trend of PCB market in the future. Prismark predicted the global semiconductor growth rate would be  4.7% in 2016, and  the global PCB growth rate would be  6.5%.That is to say, the PCB production value will reach $72 billion in 2016, which  is the continuation of a new economic cycle.

With the development of a new generation of information technology industry, all kinds of electronic information products demand gradually strengthen and new electronic products constantly emerge, which make the usage and market of PCB products constantly expand.The emerging 4G mobile phones, automotive electronics, LCD, IPTV and digital TV, cloud computing, brings high-end PCB industry huge market space.Looking back to the development path of the whole PCB industry ,strong momentum maked high-end PCB market full of unlimited business opportunities.The development of  PCB industry of the pearl river delta ,shenzhen as a center, is gradually mature, which marks the industry need  the transformation and upgrading into the high-end  development.Thus they take the advantage under the situation of global restructuring and become  powerful engine of a new generation of information technology industry and important manufactur base.The stable groth with good quality and sustainable development comprehensively are becoming the new concept of development of Shenzhen. Output of GDP per unit area, energy consumption and water consumption per unit GDP, industry structure of GDP, they all become the new connotation for economic quality. At present, Shenzhen is speeding up to high-end industrial upgrading and transformation, and strengthen the development of industrial clusters, forming a number of hundreds of billions of industrial clusters,including communication equipment and terminals, semiconductor lighting, flat panel display, computers and peripherals. Shenzhen PCB industry will also obtain promotion and development in the new round of industrial reconstruction.

The rise of the western region, the structure change of PCB industry

As the largest PCB fabrication industry cluster area in China or even the world and with the most perfect industry development chain, the Pearl River Delta region accounted for half of the China PCB output value. However, in recent years, under the pressure of environmental protection, energy, resources, etc, the government increase efforts to manage the PCB industry. A  big transfer of the industry is quietly changing the China PCB industry structure. The Pearl River Delta Region itself is well equipped on the information indusry.The convenience of the drainage and transportation makes the number of PCB manufacturers more nostalgia with the rigional facility. But the fact that PCB production will pollute the environment makes the government “push ” it out. Choose inland regions to invest, for the enterprise itself, which is passive and reluctant action. Because at present , shenzhen is still the most suitable area of developping PCB industry .But the shift is inevitable. The enterprise must  look for a way out from long-term development.

“Anyway,the advantage of Shenzhen is very obvious.”The size of Shenzhen PCB industry accounts for 30% to 30% of the country .There are  more than 1000 enterprises, and some enterprises develop rapidly.In shenzhen,in the situation of shortage of land resources, their production base must be denotative expansion and layout. But shenzhen PCB industry has a complete industrial chain,and there are about 30% to 40% of all PCB enterprises in shenzhen.The  advantages of  talent and market are huge.we believe in the future the corporate headquarters, research and development and financial settlement will be in shenzhen. Several of PCB manufacturing business executives also expressed they hoped that eventually form a “front shop, back factory” model, namely the factory is built in inland region and the headquarters is set up in the Pearl River Delta region, for example: Shenzhen.

“Industrial transfer must be gradient and hierarchic.”The personage inside course of study says. American industry transferred many times, while it did not appear hollowing out. There are still labor-intensive enterprises in the United States. As first developed eastern coastal areas, it will ultimately form headquarters economy.It mainly develops technology intensive industries with ability of global radiation and high-end service industries. While  the west  undertakes industrial transfer, and it is mainly labor-intensive, and has some high-end services. So in the end the west forms  reasonable division of labor and the organic link with the east, and coastal area industry will not be hollowing out.

The history and future of China Shenzhen PCB manufacturing industry (Part 3)

Transformation Explore : high-end manufacturing and R & D base

In the 1980 s, China began to implement new policies of reform and opening-up. The central gave many special and flexible policy to Guangdong province . in the Pearl River Delta region, especially shenzhen, played so many advantages such as adjacent to Hong Kong and Macao, and vigorously carry out the business. Under this background, Shenzhen PCB industry rapidly completed the original capital and technology accumulation,which has laid a solid material foundation for the later high speed development and the current industrial upgrading . After 30 years of development, shenzhen has considerable scale of PCB Fabrication industry. According to top 100 list of China PCB manufacturer released by CPCA in 2011,there were 24 Shenzhen enterprises on it, whose enterprise output are all over hundred million RMB. For industries, from large to strong, from low-end to high-end,they laid a solid foundation. Business model innovation is the key to the success of small and medium-sized enterprises innovation entrepreneurship.Over the years, with the containment of “encouraging innovation and tolerance failure”, shenzhen attracted many entrepreneurs. And with more efficient economic development and advocating innovation,shenzhen is in the leading position. after 30 years, through hard work and innovation, at present, shenzhen PCB industry has good foundation in the all aspects: comprehensive strength in the industry, the industrial chain, professional talent base, product technology research and development, the laboratory construction and international cooperation, etc. Deepenning the reform and transforming development patterns, after the changes shenzhen PCB manufacturing industry will usher a new stage of development.

Shenzhen is an export-oriented economy. At the beginning, industrialization joins the international industry chain. With the change and transfer of international industry chain, shenzhen industrial upgrading and adjustment will be affected correspondly.Now shenzhen industrial upgrading is facing a real change. After entering the 21st century, developed countries see China not only as a processing base, but also as the target market and main source of profit, which will bring new opportunities for China’s industry.the transfer of domestic manufacturing creates chance for shenzhen’s creating high-end manufacturing base. Shenzhen is urgent to develop advanced manufacturing industry of research and development , and advanced service industry.The key to the success of the future economic development in shenzhen , is to transfer the added value of the assembly line to the added value of office building, and to transfer the past “blue-collar” industry to “white-collar” industry.

During the orderly transfer of PCB industry, bomin and Wuzhu circuit have transferred its gravity to Meizhou and Dongguan City. their shenzhen-based factories is increasingly losing the position in their groups. Meanwhile JingWang electronic, Chongda circuit, Yongjie electronic, Jinbaize electronic, Xingsen technology , they all set up factories in the city outside of shenzhen , and they faces the important choice of how to upgrade transformation.Transferring labor-intensive common products to the inland , shenzhen will quickly turn into high-end manufacturing and r&d base of PCB industry to achieve the transformation and upgrading of industry. In addition, from scale expansion to the personalized development, balance the benefits and risks, form unique core competitiveness, which is also a good development path for China PCB manufacturing

Improve the ndustry service and global electronics manufacturing

Shenzhen is in the vanguard of the national electronic information industry development, and it has been cluster advantage in the field: the computer, communications, software, electronic components, digital audio and video, and other fields .Shenzhen is also the area where the PCB is earliest industrialized. We can clearly see the development path of industrial upgrading transformation – from simple processing to advanced manufacturing, from labor-intensive industries to strategic emerging industries, from high energy consumption low output to a low energy yield.Shenzhen has become the purchasing center of global electronic components and lectronic information products.It is close to the advantage of the market and makes the prosperity of the pearl river delta PCB industry. In the new historical stage, when under cost pressure , production base is transferred,shenzhen will remain a PCB market distributing center and it is likely to become a global sourcing center.As the basis components of the whole electronic industry , building global PCB procurement center has a good industrial base,which is pertinent to the trend of transformation into high-end services ,and is also a new industry growth point under the trend of industry transfer,and is the best ways from ordinary manufacturing PCB industry to high-end information services.Building global PCB procurement center has the characteristics:high tech content, high added value, high industrial driving force, and low resource consumption, low pollution of the environment.The construction of the procurement center will make up for industry empty created by PCB industry transfer,and continues to lead the global PCB market development.

The era that China relies on cheap labor for the development has ended. The Chinese enterprise management are facing not only the challenge of customer-centric market competition,but more increasing strength in the technical, cost, quality, service. Shenzhen has the largest electronic information industry group, the most convenient transportation port, and the best talent.In the case of a low-end manufacturing transferring to hinterland, shenzhen PCB industry has the need and strength to the high-end service industry to explore new growth space.Under the policy of supporting headquarters economy, we should encourage and support the PCB enterprises set up design center, purchase center, logistics center, financial settlement center, operations center for the integration of headquarters economy in shenzhen, and build purchase index and price index with global industrial bellwether significance ,which makes shenzhen PCB tansform from passive processing manufacturing industry to modern service industry, and create advanced manufacturing industry cluster,and promote green GDP in line with international standards.