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26 PCB007 MAGAZINE I JULY 2022 supply chain uncertainty is disappearing, with the end of double ordering and the digestion of heightened inventories. e current forecast is for modest growth, with factors like inflation, high interest rates, a strong U.S. dollar, the Ukraine conflict, and China's zero-COVID policy to be considered. Chiang summarized the main challenges to the electronics industry as: • High inventory along the supply chain • Weak demand due to declining purchasing power • High inflation and high interest rates • Over-supply of rigid and flexible boards • Geopolitical conflicts causing high energy costs • Pandemic lockdowns causing disruptions in supply-side production and logistics • Labour shortages and material cost volatility He believes that the strongest segments are those with the longest lead or that are under- going transition. He listed industrial and med- ical, automotive, computing and communica- tions infrastructure, and other consumer elec- tronics, particularly wearables. Looking forward long-term at the PCB mar- ket value and product mix, he predicts a com- pounded average annual growth rate of 4.6% over the period 2021 to 2026, with a forecast total value in 2026 exceeding $100 billion, of which packaging substrate will constitute 21.1%, with flex at 16.9%. Who was making a profit in 2021? Sixteen of the top 30 PCB companies achieved oper- ating margins above 10%, and the majority of these were Taiwanese. Who was investing? For the most part, these same companies each had CapEx of over $200 million. Reviewing geographical trends over the last two decades, Chiang noted that China has become the dominant manufacturing site for circuit boards, while the Americas, Europe, and Japan have become niche-product or low- volume suppliers. Taiwan and Korea have concentrated on advanced technologies, and Southeast Asia has become a favourable invest- ment location for Japanese and Korean compa- nies. It remains to be seen whether the trade, political, environmental, and labour-cost issues will change the PCB industry landscape again. Returning to 2022 PCB market opportu- nities, he observed that the substrate mar- ket is experiencing continued growth driven by advanced flexible substrates for BGAs, together with increasing adoption of system- in-package and module substrates. Around 14% growth in value is expected in 2022. More non-consumer applications, such as auto- motive, high-performance computers, high- speed networking, and satellite communica- tions will require HDI products, although a weak smartphone market could impede HDI growth. Faster data rates for infrastructure will require more advanced low-loss multilayer boards. e automotive market will demand more reliable high-current and high-thermal circuit boards, and there will be a decline in orders for rigid boards for consumer and PC applications. e first quarter of 2022 was strong as a con- sequence of carry-over from 2021. Indications are that the industry will have a relatively weak second quarter, particularly in Asia, for these reasons: It remains to be seen whether the trade, political, environmental, and labour-cost issues will change the PCB industry landscape again.