What is causing the PCB shortage?

What is causing the PCB shortage ?

It’s easy to blame the COVID-19 pandemic for the PCB shortage—but that’s not the whole story.

It goes without saying that the COVID-19 pandemic is the primary driver behind the ongoing component shortage. But blaming the pandemic alone can’t explain the far-reaching and long-lasting struggles that many companies are dealing with. The pandemic triggered a number of major events that exacerbated the challenges of the early days and continue to affect global supply.

Here’s a quick guide to the additional causes of the PCB shortage.

Raw material shortages affecting PCB manufacturing and production.

Raw material shortages seem to be plaguing virtually every industry these days. Builders, for example, can’t get lumber, steel, and concrete, which is slowing down construction projects all over the world.

In the PCB industry, there are a few primary shortages causing problems:

• Copper foil. Lockdowns in China have depressed the country’s output, leading to price hikes and long lead times on procurement.
• Aluminum. Aluminum is especially important for metal-backed printed circuit boards (MPCBs). Between lockdowns in China and the conflict between Ukraine and Russia, the second largest aluminum producing country in the world, aluminum availability is very low.
• Semiconductors. The chip shortage has put major strain on many, many businesses, and experts don’t expect the supply to recover until 2023 at the earliest.

PCB manufacturing delays

In the early days of the COVID-19 pandemic, one of the first big changes to consumer behavior was a big slowdown in car purchases. The automotive industry, in turn, slowed down production, and PCB manufacturers were forced to look elsewhere for business opportunities to protect their bottom line. This, coupled with increased demand for consumer electronics, led to a pretty significant disruption in PCB production as a whole.

Now that people are buying cars again, demand for PCBs has skyrocketed—but global production capacity for PCBs has not grown at the same pace. In other words, the supply is not currently meeting the demand.

Some companies, especially in the automotive industry, are resorting to drastic measures to protect themselves from the implications of this shortage. Even with PCB manufacturers attempting to curb the effects of panic buying, manufacturing delays continue to be a major problem.

How other disasters exacerbated the PCB shortage

Unfortunately, the COVID-19 pandemic was not the only major disruptive factor in 2020 and 2021. A number of natural disasters and issues sent shockwaves through the global supply chain:

• The Texas Freeze. In early 2021, an unprecedented winter storm swept across the state of Texas, causing massive power outages. Multiple semiconductor and chip manufacturing facilities were forced to shut down operations for several days, including NXP, Samsung, and Infineon Technologies.
• The Suez Canal blockage. In March 2021, a 1,300-foot container ship got stuck in the Suez Canal, blocking all passage for six days. The logjam triggered price spikes in multiple industries and massive delays, exacerbating the already severe semiconductor and computer chip shortages.
• Other natural disasters. Wildfires across North America and a factory fire at Unimicron Technology Corp in Taiwan have caused multiple production and supply chain shutdowns. Additionally, a 7.3-magnitude earthquake in Japan forced multiple plants producing semiconductor chips and silicon wafers to shut down.

Each of these events had a noteworthy impact on the PCB supply chain. Coupled with the COVID-19 pandemic, the consequences were severe.

The Great Resignation and the PCB shortage

According to the Harvard Business Review, over 47 million Americans quit their jobs in 2021. Virtually every industry has been affected by the dramatic shift in the employment market, but the technology and manufacturing sectors were hit especially hard. Many of the slowdowns in PCB manufacturing and sourcing are due to the fact that there simply aren’t enough workers to meet demand.

While the labor market appears to be on the road to recovery, the data shows that the Great Resignation was part of a trend, rather than an isolated incident. Employee turnover has been steadily increasing for over a decade as people reconsider their relationship with work. So while the worst of the labor shortage may be behind us, there’s reason to believe that ongoing trends in the employment market may continue, forcing PCB manufacturers and other industry leaders to take a different approach to their workforce.

How to navigate the ongoing PCB shortage.

Because there are so many variables impacting the PCB shortage, there is no simple—or fast—solution. Most industry experts are predicting a few more years of delays and challenges. In fact, some believe the PCB supply chain may never fully return to its pre-pandemic state.

The best way to navigate the coming years is to partner with a PCB manufacturing and design firm like Henway Industries. Henway has been in the PCB business for over a decade, so we can help you find practical solutions for virtually any issue you might encounter. We can help you source hard-to-find raw materials and components and reconfigure your designs quickly if something you need goes out of stock. We also offer custom manufacturing services, with very low unit minimums, so you can stay on track to meet your production goals.

Talk to one of our experts about how we can help