Dec 2022

Supply Chain Challenges

As 2023 looms, the global economy faces a third year of unprecedented social and economic challenges.

The PCB Connect Group analyses the year ahead for global supply chains with Global Sourcing Manager Justin Olejnik.

The global impact of coronavirus remains a cause for concern, particularly in China, whose Zero-Covid policy has come under increased criticism from inside the country, with unprecedented civil unrest highlighting the social and economic cost the virus continues to exert on people’s daily lives at a time China tries to energize its economy.

What does 2023 hold for the PCB Industry?

Justin Olejnik, PCB Connect Group’s Global Sourcing Manager –

While China unequivocally remains the global shop floor for electronics manufacturing, the Zero-Covid policy has increased discussions about the country’s ability to limit outbreaks as it heads toward winter and mass mobilization ahead of the new year celebrations. With lower immunity levels than those seen in the west and a growing discourse inside China as to the effectiveness of the current policy, our commitment to monitoring supply chain output and assessing the local conditions to ensure the safety and efficiency of our factory teams remains the PCB Connect Group’s key priority.

We continue to monitor the domestic economy, and while China’s productivity has dropped again in recent months, we have a robust supplier risk management process in place, which allows us to identify any potential risk at the earliest stage and take sourcing and management decisions in conjunction with our supply chain partners.

While we anticipate that the challenges inside China will remain throughout the country’s current coronavirus policy, we expect to see the domestic economy recover in the second half of next year with excess capacity reducing, leading to improved factory trading conditions.

Does the PCB Connect Group see opportunities in the supply chain outside China?

For many years the PCB Connect Group has offered a balanced supply chain for its PCB technology, working with key partners in Taiwan, Korea, and across mainland Europe. As the global economy has reacted to a post covid reality, the impact of increased logistics costs and reduced airfreight capacity has increased interest in alternative sourcing geographies.

With supply chains increasingly interconnected and global geopolitical tensions rising, the PCB connect Group has continued its long-held supply chain diversification strategy. We have seen interest in our diversified supply chain increase, notes Justin Olejnik; our customers are looking to balance the use of our factories outside of China as a compliment to the more traditional China factory base.

Increases in freight, greater interest, and an understanding of the need for more sustainable sources of supply have created a corollary whereby alternative sourcing geographies can now compete with China prices when the total cost of supply and supply chain risk management is considered. During 2023, we have added additional supply chain capability in regions where historically, there has been a great investment in PCB technology but where the cost delta with China has never allowed a realistic opportunity for customers.

We expect interest in these regions to grow as customers and consumers continue to reflect on the world they live in and demand greater provenance in the products they use daily.

The PCB Connect Group is a supplier of Printed Circuits Boards serving some of the most demanding applications and industries globally.