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Impact of Foreign Exchange Fluctuations in Global PCB Industry

Post:2015.08.03 Hits:433

 Impact of Foreign Exchange Fluctuations in Global PCB Industry

The year 2014 was a bumper year for most PCB companies, with the total output value of the entire PCB industry reaching $12.5 billion, up by 10.5% from the previous year. This year, the prices of bulk commodities, particularly copper prices, plummeted—greatly reducing the raw material costs for PCB companies and thereby helping raise their profitability. This, according to a report titled "Global and China FPCB Industry Report, 2014-2015" by market analyst Research In China.

However, one factor greatly affecting the industry is the currency exchange. In 2014, the euro, the NTD (New Taiwan Dollar) and the yen significantly devalued, while the South Korean won appreciated—which not only hit a serious blow to the competitiveness of South Korean FPCB enterprises, but slashed the profits of South Korean PCB enterprises. Revenues and profit margins of all South Korean PCB companies declined; for example, Flexcom's sales slumped by more than 50%, and the giant Interflex's revenue dropped 33% and its operating margin was -14.2%--this reflects the power of the currency war, according to the report.

Benefiting from the currency depreciation, Taiwanese and European companies, meanwhile, witnessed soaring profit margins. Although more than half of Japanese companies did not benefit from the depreciation of the yen because they set up production bases overseas, they still fared better than their South Korean counterparts.