For European PCB manufacturers, Chinese New Year 2022 is the key to success

European PCB manufacturers are particularly affected by the Chinese New Year, which can have a significant impact on production schedules and delivery times. It will be under the sign of the tiger and, according to the stars, it should be one of spontaneity, novelty and the granting of secret wishes. For people working in manufacturing, however, the arrival of the Chinese New Year, which in the calendar fluctuates between 21 January and 20 February, marks an absolutely crucial milestone in the season.

It is often here that it is decided whether and how successful the following year will be. In fact, the Chinese New Year is also associated with the term “Chunyun”, when people travel en masse to see their families and fifteen days of celebrations break out across the country. For two weeks, most Chinese factories are unable to produce anything, and all orders go back to Europe, at least for a while.

“Chinese New Year is always the start of the main season for us,” confirms Zdenek Capal, Chairman of the Board of Gatema PCB, which is now the largest manufacturer of printed circuit boards in Czechia according to current data.

We Have the Raw Materials, Now We’ll See

However, the traditional New Year’s positive swing that many European PCB manufacturers rely on has another unusual story this year: the raw materials crisis. Last year showed just how dependent the world’s material supplies are on a few regions and how little it takes to put the entire global supply chain in a bind. As soon as traditional supply and demand faltered, a whole host of problems immediately emerged: material shortages, competition from other industries and a logistics crisis.

Gatema PCB has tried to prepare carefully for this year as well. “The strength of our company is shown, among other things, in the fact that even in the event of a crisis, it is able to procure materials. I am very curious to see what this February will bring.

Whether the Chinese New Year will use up our stock and we will have to compete for more material, or whether we will make it through the year with the materials we already have in stock. We will see how the suppliers react and whether prices fall because there will not be enough demand. However, the current signals do not suggest this,” adds Radim Vitek, who is responsible for PCB production management.

For European PCB manufacturers, the situation is further complicated by the political environment. “The market is interested in everything we produce: copper, laminate, fiberglass, resin and copper foil. Unfortunately for us, big players often enter the picture and are able to influence the entire market. We have been greatly affected by the wind power industry, which consumes huge amounts of copper. Most recently, there has also been growing demand for car batteries. These are factors that cannot be influenced easily and that interfere with the standard market,” explains Zdenek Capal.

Reducing dependence on Asian suppliers is therefore becoming an increasingly important topic for European PCB manufacturers. “We are already talking in Europe about the need to reduce our dependence on Asian suppliers, but that is a horizon of several years, certainly not something that will change in the next few months,” adds Capal.

European PCB Manufacturers: Priority Is Given to Existing Customers

The prices of basic raw materials have risen by tens of percent in the last year alone, which is reflected in the final prices of products. Instead of looking for ways to pass these increases on to customers, we are trying to further optimise our own processes.

“We need to stay competitive, which we can only do by maintaining our key benefit – the extraordinary speed at which we produce prototype boards. Today, however, we are in a situation where we have virtually no room to cut back. Last year, we purchased a double-sided spray coating system for the solder mask, which saves one drying cycle and ultimately takes several minutes off the process.

Therefore, we have been addressing production bottlenecks and trying to increase our production capacity. If we shorten each process by a small amount, we will have more capacity for urgent orders. This enables us to offer our customers assistance in emergency situations,” says Zdenek Capal.

Existing customers play a primary role in Gatema PCB’s thinking. “Last year brought a lot of non-standard moments. The combination of the coronavirus, the raw materials crisis and price increases caused some European PCB manufacturers to go under. As a result, dozens of new enquiries started coming to us in some months. At the same time, however, we found ourselves in a situation where our existing clients were also increasing their orders, as European PCB manufacturers faced growing challenges across the market.”

We also had cases where some companies placed more than 100 percent more orders with us than in previous years. At such times, we have to assess the situation with a clear head. We prefer to turn down new enquiries – even if they give us a chance to win a new client – and give priority to long-standing relationships and the satisfaction of our existing customers, which is especially important for European PCB manufacturers and their long-term partners.

We have grown together with them, and we owe it to them that we are where we are today. Commitment in the form of long-term cooperation is also about making sure that our customers can rely on us at every moment and that we can move forward in technology together. This approach is particularly important for European PCB manufacturers and their customers in a market where supply, capacity and delivery times can change rapidly,” concludes the Chairman of Gatema PCB.