PCB Makers Need to Ramp up as AI Spurs Demand

With the growing interest in artificial intelligence (AI), the demand for PCBs (printed circuit boards) and other hardware components has also increased. As a result, PCB manufacturers must prepare to meet this rising demand.

AI Servers Require More PCBs
At the beginning of the year, Foxconn Chairman Liu Young-way predicted that while the company's business would improve this year, it would still face challenges due to shortages of AI server chips. He also noted that global uncertainties caused by geopolitical issues could dampen consumer demand for AI.

Since AI servers require more PCBs, these forecasts are critical for the PCB industry. A May 2023 market analysis report by QYResearch projected that the global PCB market for AI servers would reach $197.4 million from 2023 to 2029, with a compound annual growth rate (CAGR) of 12%. The report also highlighted that North America holds a significant share of the PCB market, partly due to its global leadership in AI research and development.

As the foundation for computing power chips and the pathway for signal transmission, PCBs are essential for enhancing server performance. They enable AI servers to perform inference and training tasks, thereby improving the efficiency of AI algorithms. As decision-makers continue exploring the best ways to utilize AI, they are increasingly likely to rely on AI servers equipped with these PCBs.

In June 2023, data from the Financial Times predicted that a Taiwanese PCB manufacturer's revenue from AI server components would soon account for 38% of its total revenue, up from less than 3% previously. The primary reason was a sevenfold increase in shipments of AI server PCBs compared to general-purpose server PCBs.

A market research report by Technavio on the overall PCB landscape estimated that the PCB market would grow at a CAGR of 5.05% from 2022 to 2027, reaching a total value of $19.05 billion. The report also identified AI as one of the key demand drivers for these components.

To cope with the rising demand, PCB manufacturers must now develop strategies. One approach is identifying shortcomings in current processes and implementing continuous improvements. For example, 3D printing and X-ray inspection have made PCB production more efficient.

AI Enhances Automation in PCB Production Lines
For South Korean PCB manufacturer Isu Petasys, 2023 was an exceptionally successful year. The company's stock price surged by 487%, making it one of the top performers on South Korea's benchmark stock index. Analyst Baik Gil-hyun from Yuanta Securities Korea attributed Isu Petasys' success largely to the AI boom. Additionally, the company's ability to supply directly to Google and Nvidia served as a significant driver for its business growth.

While Isu Petasys' primary customer base historically consisted of telecom companies, it recently diversified by adding more technology-centric clients. This strategic shift allowed the company to capitalize on the AI trend.

However, PCB manufacturers must proactively prepare for increased demand. During the PCB design process, selecting components with wider tolerances can expand material options, offering greater flexibility in production. This strategy helps companies manage large customer orders more effectively.

Although AI leads to higher order volumes and workloads for PCB manufacturers, it also aids them in tackling demanding environments. For instance, one company employs an AI-powered PCB routing and placement tool that automates previously manual tasks, reducing turnaround time to one-tenth of the original duration.

Some AI solutions also enhance quality control efficiency by detecting issues at the nanoscale. These solutions minimize the likelihood of customer dissatisfaction, helping businesses maintain strong reputations.

PCB manufacturers can achieve the best results by clearly identifying their primary challenges and exploring how AI can address them. While AI still requires human oversight, integrating it into factory workflows can alleviate employee workloads, freeing them to focus on other tasks.

At one company, leadership noticed that manual operations in repetitive and monotonous tasks resulted in numerous errors. They introduced collaborative robots (cobots) for PCB assembly, increasing production line speed by 25% while reducing risks. These robots are safe enough for humans to work alongside and help alleviate tedious tasks.

This approach—confronting challenges and finding AI-driven solutions—has proven effective for many industry leaders. It ensures they delve deeply into problems and carefully consider how AI can make these obstacles more manageable. Deploying this technology with clear objectives can save both time and money.

An Exciting Era for the PCB Industry
The potential of AI is vast, especially as industries actively explore how to leverage the technology and recognize its advantages. PCB manufacturers must remain vigilant, keeping an eye on industry trends to prepare for larger and more frequent orders from both new and existing customers. By adopting advanced technologies to optimize production and address long-standing issues, PCB manufacturers can maintain steady growth even amid rising demand.

These manufacturers must also think ahead. How can they strategize to mitigate material shortages? What training should employees receive to proficiently use new production tools and platforms? By considering these factors, PCB companies can effectively minimize potential disruptions and continue meeting market needs.