The US has recently kicked off imposing additional tariffs on roughly US$200 billion of imports from China, promoting Taiwan major assemblers of electronics products to seriously mull relocating their manufacturing operations from China back to Taiwan or to Southeast Asia. By contrast, PCB makers have stayed relatively quiet as they feel little impact from the tariff war between the world's two largest economies, according to industry sources.
The sources said that most PCB makers do not deliver shipments directly to the US but to downstream PCB assembly plants before the assembled PCBs are sent to the final assemblers of electronics products subject to extra tariffs imposed by the US.
PCB makers can only take a wait-and-see attitude before downstream assemblers move to discuss with them over how to adjust production capacity, quotes for orders and ways of delivery after negotiating with brand vendors. Accordingly, there is no need for PCB makers to worry about plant relocation or tax evasion issues for the moment, the sources continued.
The US has reduced the ratio of consumer electronics subject to extra tariffs, with Apple devices excluded from the latest tariff lists, mainly to reduce the burden on US consumers. With this, unless PCBs are supplied to makers of communication network equipment and servers associated with 5G applications, PCB makers will not feel the pinch of the ongoing tariff war in the short term.
In terms of cost structure, PCB commands an extremely low ratio of product costs, and even if it is subject to a 25% tariff, the overall cost increase is rather limited.
Industry sources said that the US tariff scheme is mainly to force manufacturing plants with high production value in China to move to the US, and therefore the PCB industry, which involves high energy consumption, high pollution and low production value, is the least concerned, let alone relocating to the US.
PCBs are seeing limited impact from the US and China trade tensions
Photo: Digitimes file photo
Article translated by Willis Ke
