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PCB materials subject to price hike in April
Ingrid Lee, Taipei; Esther Lam, DIGITIMES [Tuesday 15 April 2008]
Key printed circuit board (PCB) materials, including glass yarn and copper clad laminate (CCL), are all subject to a price increase in April. As PCB demand is expected to remain weak in the second quarter amid the slow season, industry watchers commented that whether prices are successfully adjusted remains to be seen.
Some glass yarn makers have already raised their quotes, with quotes for the mainstream G75 growing to US$1.10-1.60, according to industry sources. Leading player Taiwan Glass is said to have raised its quotes by 5-8% in April, with rivals including Glotech Industrial already following the price hike, though the rate of adjustment by these vendors is not as big as Taiwan Glass. They noted that glass yarn makers are quoting prices in New Taiwan (NT) dollars and that this may put more pressure on downstream customers amid the strong NT dollar. The price of mainstream CCLs, in the meantime, have already risen by 10% in April, the sources added.
Despite prices of materials being on an uphill trend, negotiation with PCB customers are still underway, without any settlement being made yet. As the second quarter is still the slow season for the PCB sector with customers' order visibility being low, adjustment in prices is hard to make, as evident in the static quotes of leading CCL maker Nan Ya Plastics, the sources said.
However, according to a Chinese-language Economic Daily News (EDN) report, Nan Ya has already informed customers that it will raise CCL quotes by 10%, with smaller-scale rivals preparing for a price adjustment of about 15%. Fellow CCL makers thus deliver divergent views about a price adjustment, with some saying a price adjustment being necessary and some saying that Nan Ya raising prices has yet to be seen.
Since upstream materials account for about 80% of the cost of CCLs, further cost down is thus unlikely. Despite the market still having about three months worth of inventory, the intensifying cost pressure means that passing costs on to customers is the only way to protect the profitability of CCL makers, some industry watchers remarked.