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26 PCB007 MAGAZINE I OCTOBER 2019 between 2015 and 2016 from 24.3 billion USD to $25.8 billion. However, from 2016–2018, the growth had been unsubstantial with $26.2 bil- lion and $26.5 billion in 2017 and 2018. It has been estimated that 2019 will close at about $26.7 billion. This year, we cannot ignore the impact of the change in strategy of major players toward the supply chain. The U.S. trade restrictions imposed on Huawei Technologies, one of the world's leading networking and telecommuni- cation manufacturers from China, have drasti- cally affected Huawei's access to U.S. technol- ogies, which includes raw materials. The U.S. trade restriction and warning to its allied coun- tries have forced Huawei's products to face project bans, business contract restrictions, security scrutiny, and even pushback in some countries. Huawei continues to make changes to its strategy to continue doing business. The Race Toward the First 5G Rollout To wean itself off U.S. suppliers for related IC products, since June, Huawei has moved to redesign its 5G base station IC modules and to cut orders for CCL for use in their active an- tenna unit (AAU) from a major U.S. supplier while seeking alternative Asian supply sourc- es. China has a huge domestic market and is also competing to be among the first to roll out 5G infrastructure. Huawei is the top provider in China in this aspect and had been ramping up circuit boards for 5G products. Due to this surge in 5G demand, the PCB supply chain in Asia has been hit with a short- age of high-frequency and low-loss material for 5G. Major laminate suppliers are switching their production lines to produce such material to meet the demand. As a result, fewer FR-4 materials are being produced, which is what we are facing today. The shortage of high-fre- quency materials has been taken up by the ma- jor players. A longer lead time is needed for conventional glass-epoxy laminate FR-4 mate- rials because its production has been reduced. Copper Foil Shortages: Lessons Learned After the lessons learned over the past few years about copper foil shortages, laminate manufacturers are quick to implement rules to control the situation today by implementing scheduled production, where a certain model of FR-4 is produced on certain days of the week only. This means there's no flexibility for PCB manufacturers to place an order and receive material with a short lead time. Laminate man- ufacturers are also defining allocation for PCB manufacturers, where the seller determines how much quantity the buyer can buy to pre- vent any single PCB manufacturer from taking all that has been produced. And how do we get through this period? Again, planning, planning, and planning. Spend your time wisely. Plan ahead, make an accurate forecast, and involve your PCB sup- plier. You know you need to make a reserva- tion in advance for very popular restaurants; why are you not doing the same for your PCB purchasing? We consistently need to remind ourselves that PCBs are not off-the-shelf prod- ucts; they are customized and take time. Conclusion We know the PCB growth from now until next year will most likely be led by 5G prod- ucts and the automotive segment. I hope this column has directed the spotlight toward the current situation and emphasized our recom- mendation of a timely disposition of PCBs to avoid unpleasant delays and surprises. PCB007 Raymond Goh is COO of Elmatica. To read past columns or contact The PCB Norsemen, click here. This year, we cannot ignore the impact of the change in strategy of major players toward the supply chain.

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