Introduction: Industry Transformation Triggered by Trade Policies
Since 2018, the tariff policies imposed by the United States on printed circuit boards (PCBs) have profoundly reshaped the global electronics supply chain landscape. These trade measures have not only impacted PCB manufacturers in both China and the United States but have also triggered a restructuring of global supply chains, adjustments to technological development trajectories, and a redrawing of market boundaries.
Evolution of US PCB Tariff Policies
Origins and Escalation of Trade Conflict
The US tariff policy on PCBs began during the Trump administration, initially imposing a 25% tariff on many Chinese PCB products. Over time, the scope of tariffs expanded to cover key raw materials like copper-clad laminates and various types of PCB products. It is noteworthy that double-sided and four-layer PCBs once received temporary exemptions, valid until May 31, 2025.
In April 2025, US policy took a new turn. US Secretary of Commerce Howard Lutnick revealed that previous tariff exemptions for electronic products like semiconductors, smartphones, and computers were merely “temporary relief measures” and announced that specialized tariff measures targeting the semiconductor industry would be launched within the next one to two months.
Strategic Intent Behind the Policies
The US strategy of “exempt first, tax later” reflects its complex balancing act between protecting domestic industries and maintaining supply chain stability. According to analysis by the RAND Corporation, the total value of exempted goods in this round was as high as $390 billion, with $101 billion originating from China. This arrangement is essentially a “tactical retreat” to prevent disruptions in key commodity imports, rather than a fundamental change in strategic direction.
Direct Impact of Tariff Policies on the PCB Industry
Changes in Cost Structure
US tariff hikes led to a significant 10%-25% increase in the cost of Chinese PCB exports to the US, severely squeezing profit margins for Chinese manufacturers. For small and medium-sized enterprises heavily reliant on the US market, this cost increase was particularly critical, with some experiencing a 10%-15% year-on-year decrease in orders, even facing operational losses.
Meanwhile, import prices for key materials such as semiconductors and copper-clad laminates have risen due to tariff policies, compounded by escalating logistics costs, resulting in an approximately 10% to 15% increase in corporate procurement expenses. Some companies have attempted to engage in transshipment trade through production bases in Southeast Asia, but increased tariff costs at transshipment hubs like Mexico and Vietnam have instead exacerbated supply chain volatility.
Redistribution of Market Share
After the implementation of tariffs, Chinese PCB exports to the US fell by over 12% in 2019. US companies were forced to seek alternative suppliers outside China, turning to Southeast Asian regions such as Thailand, Vietnam, and India, which attracted significant industrial transfer due to lower labor costs and more favorable tariff treatment.
However, this shift is not comprehensive. Southeast Asian countries struggle to replace China’s production capacity advantages in 6-layer and above multi-layer boards in the short term, especially in high-end PCB areas like high-frequency high-speed boards and 20+ layer boards, where China’s technological accumulation and production scale still dominate.
Restructuring and Adjustment of the Global PCB Supply Chain
Accelerated Trend Towards Regionalized Production
To circumvent tariff risks, global PCB companies accelerated adjustments to their production layouts. Leading Chinese companies like Wus Printed Circuit and Shennan Circuits established overseas factories (e.g., in Thailand, Vietnam) to retain core orders; some companies even set up factories in the US itself to qualify for tax-exempt policies.
Data indicates that the impact on direct exports to the U.S. by Chinese PCB manufacturers has been limited, with most companies deriving less than 5% of their export revenue from the American market. However, U.S. buyers are increasingly demanding “diversified sourcing,” compelling Chinese PCB firms to shift production capacity to Southeast Asia. For instance, Zhongfu Circuit invested $75 million to establish a production base in Thailand in 2022, while Shenghong Technology and Daotong Technology have also expanded operations in Vietnam.
Supply Chain Resilience Tested
The capacity transfer process led to comprehensive increases in relocation costs, operational costs, and logistics costs. Meanwhile, re-export channels face indirect impacts from potential US regional tariff hikes, which could weaken the trade advantages of transit hubs. This supply chain restructuring affects not only manufacturing companies but also raw material suppliers; Japanese copper-clad laminate manufacturers have begun adjusting export pricing strategies, potentially triggering a reorganization of substrate supply.
Strategic Responses and Transformation Paths for PCB Enterprises
Diversified Market Layout
Facing higher barriers to the US market, Chinese PCB companies actively explored diversified markets to reduce dependence on any single market. Leading companies balanced risks by increasing the proportion of exports to emerging markets like Europe and Southeast Asia. Data shows that China’s exports to ASEAN grew by 8.4% in 2024, reflecting the strengthening synergistic effects of regional industry chains.
Concurrently, Chinese PCB companies are increasingly focused on the domestic market, particularly capitalizing on emerging sectors like new energy vehicles, 5G communication, and telecommunications, to reduce reliance on the US market and compensate for export losses.
Technological Upgrading and Product Structure Adjustment
Tariff pressures accelerated technological innovation among Chinese PCB manufacturers, pushing them towards higher value-added products. In the context of rising costs, companies maintained competitiveness by improving product quality and technological content.
The large-scale construction of 5G communication base stations fueled strong demand for millimeter-wave band PCBs, while the intelligent transformation of new energy vehicles required PCBs with higher heat dissipation performance, directly driving a 45% increase in R&D investment for special products like metal substrates and ceramic substrates. The US technology restriction list already covers some high-end PCB manufacturing equipment, forcing domestic companies to accelerate the localization process for key equipment like photoresists and laser drilling machines.
Supply Chain Optimization and Localization
PCB manufacturers actively sourced raw materials and semi-finished products from countries that have preferential trade agreements with their home countries to reduce costs and mitigate tariff impacts. Simultaneously, domestic companies accelerated the process of replacing core materials and processes with local alternatives, significantly increasing R&D investment in key raw materials like high-frequency high-speed copper-clad laminates and special resins.
Industry data shows that the self-sufficiency rate of domestic high-end copper-clad laminates increased to 58% in 2024, up 15 percentage points from three years ago, but there remains a gap of over 30% for core materials like high-end copper foil. This situation of “partial breakthroughs, overall catch-up” reflects both technological breakthroughs by domestic companies in high-frequency high-speed PCBs and the long-term nature of basic materials R&D.
Reshaping of the Global PCB Industry Landscape
Divergence in Regional Competition Patterns
Mainland China’s share of global PCB output value rose from 53% in 2020 to 76% in 2024, yet its profit share increased only from 28% to 41%, reflecting the persistent challenge of a product mix dominated by mid-to-low-end offerings. Tariff policies in the North American market caused a 12% decline in Chinese PCB imports, but delayed local capacity expansion created a supply gap, instead generating market opportunities for manufacturers from South Korea and Taiwan.
Regions with stable geopolitics and rapid technological development, such as emerging economies in Asia, continue to have strong demand for high-end PCB products. The vigorous development of cutting-edge technology fields like 5G, AI, and the Internet of Things in these regions brings new growth momentum to the PCB industry.
Evolution of Technological Development Paths
Technological development in the PCB industry is deepening further, mainly reflected in two directions: high density and high reliability. To adapt to the trend of miniaturization and high performance of electronic equipment, companies are increasing R&D investment, striving to develop PCB products with more layers and smaller line width/spacing.
The US CHIPS Act subsidizes domestic high-end PCB enterprises, promoting the localization of technologies like 5G substrates, squeezing the market share of Chinese suppliers in North America. This strengthening of technological barriers prompts the global PCB technology development to exhibit characteristics of parallel “demand-driven innovation” and “policy-guided transformation.”
Future Outlook and Trend Predictions
Policy Environment Uncertainty
The US has repeatedly extended tariff exemptions for Chinese PCBs, but PCBs for military use will be restricted after 2027. Furthermore, if the US expands the scope of tariffs on semiconductor intermediate products, it could indirectly affect PCB companies through downstream demand.
The tariff dispute between China and the US has entered a stage of “symbolic confrontation.” China’s tariff rates on US goods are as high as 125%, while US rates on some Chinese products reach 145%. This “no-win” game of escalating confrontation may eventually force both sides back to the negotiating table.
Long-term Impact of Industry Chain Restructuring
While the tariff war promotes the trend of “localized production,” it also accelerates the reorganization of global supply chains. The US is committed to reshoring the semiconductor industry, China is focused on import substitution, and Southeast Asia is taking over mid-to-low-end manufacturing. This “regionalized supply chain” reduces geopolitical risk but inevitably brings efficiency losses and inflationary pressures.
In the long run, these policies promote the autonomous development of China’s semiconductor and PCB industries, increase domestic production capacity, and reduce dependence on imports. The response strategies of global PCB manufacturers—transferring production, optimizing supply chains, and expanding into new markets—reflect the complexity and evolving nature of global trade in the electronics industry under tariff pressure.