Printed circuit boards are at the heart of modern electronics – quite literally. PCBs have radically changed the way that we approach the design and construction of both circuit boards and electronics more generally. Pretty much every electronic device you buy today contains a PCB. They are ubiquitous and they are clearly here to stay. It sounds like a great investment, right?
However, any experienced investor will tell you that some of the shakiest investments they ever made looked great on paper. The world of investing is fickle and sometimes fortunes are made and broken on the roll of a dice we aren’t even aware of. No investment is without risk, but the PCB industry is a solid market to invest in. You need to think carefully about precisely who and what you invest in, but if you make the right choice, the potential ROI is huge.
The Market in Numbers
The global PCB market is expected to maintain a compound annual growth rate of between 3 and 4 percent until 2020. Key factors in the ongoing growth of the market include rising demand for substrates and the galloping pace of technological advances in product types. PCBs are becoming more complex and sophisticated, meaning that the devices they power are also becoming capable of more.
The vast majority (more than 90%) of global PCB production occurs in the Asia Pacific region. It’s no coincidence that this is also the region that contains many of the world’s major electronics producing countries – South Korea, China, Taiwan, and Japan. Electronics titans like Panasonic, Sony, Samsung are the major drivers of growth in the PCB sector. Not only do they require a lot of PCBs, but their technology is also a major driver of advances in the market.
Investment Opportunities
Most of us would love to have shares in Sony, Samsung, and the like. These businesses are low-risk investments, it’s hard to envisage Sony’s stock going anywhere but up in the near future. However, if you’re looking for something with more risk and higher potential rewards (not to mention a lower share price), things get more complicated.
This is a highly fragmented marketplace with most power focused at the top. The top 10 suppliers of PCBs account for 33% of the market worldwide.
PCB Software
The PCBs themselves are not the entire story. Another crucial component of this industry is the design software. CAD software is also a huge global market, especially as CAM becomes cheaper and more accessible. One of the leaders in this part of the market is Altium. They turned heads last year when their chief executive claimed the business was on course for annual revenues of $500 million by 2020, but they are now on course to hit that goal. As well as their Altium Designer software for PCB design, they also offer CircuitStudio, a tool that can convert PCB schematics between different file formats.
The PCB market is a solid investment target for any investor looking to expand their portfolio and break into the manufacturing or electronics sectors. PCBs are only becoming more essential to the modern electronics market, and that’s unlikely to change anytime soon.
