How trade war affects US/China PCB business

It was highlighted back in last Sept when Section 301 / List 03 was frequently mentioned .
So now, I listed somethings you cannot miss when doing PCB business with China in year 2019, so as to help you scale your PCB business in the coming time.

Are the US PCB customers going to pay an extra 10%~25% to buy from the old vendors? I bet the other side of the world has the answer.
Even without the tariff war, the exchange rate is another headache. In the previous presidencies, the exchange rate is also a powerful tool against China exporting business overall. This year we are looking at 650RMB=100USD in the coming months time. Means China factory may raise their prices despite all tariff wars and eventually, the selling price may go up a bit.
To embrace these changes, now more Chinese PCB manufacturers are considering alternative markets than just focus on the US.
According to the Industry report 2018, many China PCB giants are either move their plants to inland due to environmental restrictions or to cut some subsidiaries due to insufficient orders. Those who embrace the big changes invested new plants and equipment in flexible circuit board manufacture as well as HDI board and automobile application boards manufacruring technologies.

The logic is very clear, to embrace the change before its too late.

To demonstrate a better picture of the industry, we can tell more from the pics below

While the importers are

There is no other place than Asia, has such a complete supply chain and cost-effective massive production plants.

For those still wish to purchase from China or other places in Asia, we recommend you try the following:

  1. Be aware of the potential price change which is likely to come in the next couple of months. Negotiate a good deal with vendors or bank for a set exchange rate for some time, if possible.

  2. Optimize the implicit cost of your project. Like transportation/ inventories/ communication and other supporting services. You can save that with a right vendor who offers one-stop service and all risks can be shared if stock/ production scheduled well ahead of time.

  3. You may use drop shipment or trans-shipping if your products/ vendors allow that.

  4. Find out some backups if your original vendors cannot meet some of your requests.

From NCAB group Jan ~Sept,the report says: “ In August, a decision was taken to establish a company in Malaysia, and the recruitment of a local Managing Director is in progress.” Nor to mention, they are planning to set more alternative plans for the future supply chain management.

Ref links :

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