The global flexible printed circuit board (FPCB) market valued US $11.321 billion with a YoY growth rate of 9.4% in 2013, and will be worth US $12.008 billion in 2014 and US $12.686 billion in 2015.
FPCB is mainly used in display (LCD Panel and Touch screen), computing (HDD and ODD) and communication (mobile phones). In 2013, FPCB applied to the computer field occupied 25%, of which 80% was dominated by Japanese companies; however, this market is gradually shrinking.
In the field of mobile phones and tablet PCs, only the vendors such as Samsung, Apple, LG, Sony, HTC and Nokia who have high quality requirements like to adopt FPCB, while other ones may replace FPCB with FFC or common connectors. The FPCB purchase amount of Samsung and Apple is equivalent to over 50% of the global FPCB market.
In 2013, the most significant change of the FPCB industry lay in the slumping profit margin of veterans and the soaring profit margin of new entrants. Veterans lagged behind new entrants in equipment and technical R&D strength. After a high starting point and early difficulties, new entrants witnessed a significant increase in profit margin. In addition, the production bases of veterans were mostly located in Mainland China, where RMB appreciation and rising labor costs led to the substantial fall of profits.
The world's largest FPCB company Mektron suffered its first loss since the establishment, because of three main reasons: First, HDD and ODD markets contracted; second, Mektron began to intervene in the price war; third, Mektron's 45% output came from China where RMB appreciation and rising labor costs eroded profits. Mektron has increased the capacity in Taiwan, and Panasonic has also invested USD100 million in building a new FPCB base in Taiwan.
The gross margin of South Korea's largest FPCB company Interflex fell by nearly 50% in 2013, and its operating margin plummeted from 6.2% to 1.2%. The only FPCB company in the United States, MFLEX, whose manufacturing bases were in Mainland China also faced loss for the first time. Fast-growing companies such as Flexcom and BHflex transferred their main production bases to Vietnam.
Hon Hai Group's ZDT obtained more orders from Apple with the advantages of the parent company, so that its profit margin went up substantially. ZDT's main base is located in Shenzhen, but it has also transferred part of its bases to low-cost regions: Its second base is in Qinhuangdao, and the third base is in Huai'an.
