market continues to face pressure from to destock , resulting in the traditional electronics peak season in the second half of the year. Although some PCB factories still actively view the growth trend of operations in the second half of the year, there are also many conservative board factories that choose conservatively. Reflected to the upstream raw material operators of PCB, the Taiwan Circuit Board Association (TPCA) statistics showed that the revenue of PCB raw material in Taiwan's listed cabinet decreased by nearly 30% year-on-year in September.
TPCA statistics show that in September, the revenue of PCB raw materials on the listed counter in Taiwan decreased by 3.6% month-on-month and 28.01% year-on-year, and the cumulative revenue in the first nine months decreased by 5.01% year-on-year. Benefiting from the strong pull-in of new American machines, the revenue of soft copper foil substrates (FCCL) showed monthly growth, but overall demand declined, still recession compared with last year. Other raw materials such as copper foil substrates (CCL), glass fiber yarn/cloth, copper foil, PCB-related raw materials, etc., are facing headwinds in the market, and revenue in September still showed a double decrease year-on-month decline.
PCB manufacturer said that in the second half of the year, demand for Apple new products remains stable compared with other products, and most other products are still destocking. Even Netcom servers, automotive chips, etc. have always been in good demand, and it is also under pressure. Continuously lowering inventory in the second half of the year is the primary goal of most manufacturers.
Some other manufacturers also pointed out that since inflation and interest rate hikes, the consumer market has continued to shrink. Even if it enters the traditional peak season of the third quarter, the client has bluntly said that it wants to sell inventory and is also indifferent to the outlook for the fourth quarter. Even the subsequent European and American festival sales schedule is expected to be insufficient consumption power, and even the high-end inventory in the electronics industry will still take more than 6 months to digest.
Although the PCB raw material population generally did not have a strong momentum in September, many manufacturers' revenue stopped falling and rebounded in September. For example, most of the CCL factories showed monthly growth in September. Taiwan Optoelectronics and Lianmao continue to benefit from the relatively support of demand for related products such as Netcom and servers. Tenghui benefited from the end of the European summer break and shipments have recovered.
Copper Foil Factory Jinju's revenue in September also grew by more than 10% compared with the previous month. Jinju mentioned earlier that it is expected that the server inventory adjustment will only be short-term, and inventory sales should not be too long. Although consumer demand is not good, automotive shipments are gradually increasing, and the target will bottom out in the third quarter and gradually rebound in the future.
FCCL Taihong and AsiaDirector have achieved steady monthly growth in August and September due to the benefits of new American models. Although revenue has stopped falling and rebounded, the two companies still maintain a conservative view of the subsequent market. AsiaDivision said that due to China's weak domestic demand and high consumer electronic inventory, this wave of inventory adjustment is estimated to be in the first quarter of next year, and prudent response will be maintained in the future, focusing on new applications with high niche and high thresholds as the main growth momentum.
In fact, at the end of September, according to statistics from CINNO Research, the revenue scale of PCB products of the top 10 PCB companies in the world in the first half of 2022 was about US$13.8 billion, and increased by about 17.5% year-on-year. Among them, Zhending Technology continued to win the championship again, and Xinxing Electronics has the largest increase.
At present, global downstream PCB industries such as automotive electronics are in strong demand, and the performance of global leading PCB companies continues to hit new highs. According to CINNO Research statistics, the revenue scale of PCB products of the top 10 companies in the world in the first half of 2022 was approximately US$13.81 billion, an increase of about 17.5% year-on-year.
Among the top 10 PCB companies in the world this time, there are 5 Taiwanese companies in China, still accounting for half of the market; 2 Chinese mainland companies and Japanese companies each, and 1 American company. Among them, the selected PCB companies in mainland China are Dongshan Precision and Shennan Circuit , respectively, ranking third and tenth respectively.
Global Top 10 Enterprise PCB Revenue Ranking in the first half of 2022, Source: CINNO Research
Taiwan's Zhending Technology won the championship again with a scale of about US$2.38 billion, an increase of about 20.2% year-on-year, and is still the largest company in the world with the largest revenue scale of PCB products. The fastest-growing revenue of PCB products is Xinxing Electronics. Benefiting from the significant increase in demand for IC carrier boards, its revenue in the first half of 2022 was approximately US$2.31 billion, an increase of about 44.7% year-on-year. The revenue scale of PCB products is still second only to Zhending Technology, and the gap with Zhending Technology has further narrowed, and it is very likely to catch up in the future.
Affected by the tightening of monetary policy of the Federal Reserve , the global price of commodities , especially copper, has led to a decline in the cost of upstream raw materials for PCBs. In the first half of 2022, the gross profit of most global leading companies has improved.According to CINNO Research statistics, the gross profit scale of the top 10 PCB companies in the world in the first half of 2022 was about US$3.27 billion, a significant increase of about 46.2% year-on-year, far higher than the 17.5% revenue growth rate, and the overall gross profit margin reached 23.7%, an increase of about 4.6 percentage points year-on-year. Except for Japan's Qisheng's gross profit growth of negative year-on-year, the gross profit of the other nine companies has increased to varying degrees year-on-year.
In the first half of 2022, Xinxing Electronics' gross profit reached US$810 million, a significant increase of about 178.3% year-on-year, becoming the company with the highest gross profit of PCB products in the world. Its gross profit growth rate is far higher than its revenue growth rate of 44.7%, and its gross profit margin reached 35.3%, an increase of 16.9 percentage points year-on-year, almost doubled.
The company with the highest gross profit margin of PCB products in this Top 10 list is South Asia Circuit. Benefiting from the increase in demand for large sizes, high-rise numbers, and high-end IC carrier boards and the increase in product yield, the gross profit of South Asia Circuit PCB products in the first half of 2022 was nearly US$400 million, a significant increase of about 103.5% year-on-year, and its gross profit margin reached 38.1%, an increase of 14.3 percentage points year-on-year, ranking first.
Due to the rapid depreciation of the yen since March 2022, the cost of raw materials denominated in the yen has increased sharply, bringing huge pressure to the cost side of Japanese manufacturing companies. Japan's Qisheng PCB product revenue increased by 14.8% year-on-year in the first half of 2022, but gross profit decreased by 5.6% year-on-year. The gross profit margin also fell by 3.3 percentage points to 15.1%, becoming the company with the lowest gross profit margin among the top 10 PCB products.
, also a Japanese company, benefited from high-end IC carrier board products. In the first half of 2022, Yifeidian's PCB product revenue increased by about 19.6% year-on-year, gross profit increased by about 32.7% year-on-year, and gross profit margin increased by 30.4%, an increase of 3 percentage points year-on-year.
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