Automotive PCB Market Analysis

Automotive PCB Market Deep Dive – PESTLE, Porter, SWOT

The market for printed circuit boards for automobiles is going through a period of transformation. It is being driven by the rapid evolution of automobile technology and the increasing integration of electronics in modern automobiles. The growing sophistication of automobiles is boosting demand for high-performance printed circuit boards, particularly for ADAS, infotainment and EV applications. The convergence of the automobile and the electronics industries is fostering innovation and resulting in the development of printed circuit boards that are not only lightweight and compact, but also capable of withstanding the harshest of vehicle environments. The quest for greater energy efficiency and the use of sustainable materials is also resulting in new designs and materials. This dynamic environment is presenting both challenges and opportunities for all market participants. The market is highly competitive, and the complexity of the supply chain, regulatory compliance and technological development must be carefully managed.

PESTLE Analysis

• Political:
  In 2024, the automotive printed circuit board market is influenced by government regulations on vehicle safety and emissions standards. For example, the General Regulation on Vehicle Safety (GRV) in the European Union mandates that all new vehicles must be equipped with the latest safety features, which will boost the demand for printed circuit boards that support these safety features. In the United States, the government has allocated more than seven billion dollars for the development of electric and hybrid vehicles, including printed circuit boards.
• Economic:
  Economic factors, such as inflation and the rate of consumer spending, also have an effect on the automotive printed circuit board market. In 2024, the U.S. inflation rate is projected to be around 3.5%, which will have an effect on consumers’ purchasing power and thus on the demand for new vehicles equipped with advanced printed circuit board technology. In addition, the average U.S. household income in 2024 is projected to be about USD 78,500, which will also influence the amount of money spent on vehicles and their technology.
• Social:
  Social trends are increasingly in favor of electric and driverless vehicles, which are largely based on advanced printed circuit board technology. In 2024, it is estimated that approximately 60 percent of consumers are willing to pay a premium for electric vehicles, which reflects both the growing awareness of the environment and the changing taste of consumers. This trend is driving the development of printed circuit boards for electric drivetrains and smart vehicle systems, which is in line with the societal trend towards sustainability.
• Technological:
  The resurgence of the automotive printed circuit board market is a result of the technological progress. In 2024, the integration of 5G technology into vehicles is expected to increase the demand for high-frequency printed circuit boards, with an estimated one-quarter of new cars being 5G-enabled. In addition, the Internet of Things in the vehicle will require the development of more sophisticated printed circuit boards that can cope with the increasing data processing and connection requirements.
• Legal:
  The legal requirements relating to international standards, and in particular to the IEC 60945, play a crucial role in the market for printed circuit boards in the automobile. In 2024, the International Organization for Standardization (ISO) will publish new standards for car electronics, specifically the ISO 26262, which will focus on safety. It is the manufacturer's responsibility to meet these standards, and failure to do so may result in fines or product recalls. Hence, the legal requirements relating to the design and manufacture of printed circuit boards are gaining in importance.
• Environmental:
  The increasing strictness of the regulations on the environment has a considerable influence on the PCB market in the car. In 2024, the European Union's Waste from Electric and Electronic Equipment (WEEE) Directive requires at least 65% of the recovery of electrical and electronic equipment, including car-borne PCBs. In order to comply with these regulations, about 40% of the companies will invest in the use of eco-friendly materials and production methods.

Porters Five Forces

• Threat of New Entrants:
  Barriers to entry: Moderate. The barriers to entry in the market for printed circuit boards for the automobile are moderate, mainly due to the significant investment required in the technology and the manufacturing facilities. The large players also benefit from economies of scale and brand awareness, which deters new entrants. However, the rapid technological development and the growing demand for electric vehicles can open up opportunities for new companies to enter the market.
• Bargaining Power of Suppliers:
  The suppliers’ bargaining power in the market for automobile printed circuit boards is relatively low, owing to the number of suppliers and the standardization of many components. The manufacturers can easily change suppliers if the price goes up or the quality goes down. But suppliers of specialized materials or high-tech products have more bargaining power.
• Bargaining Power of Buyers:
  The buyers in the automobile P.C.B. market, especially the big automobile manufacturers, have considerable bargaining power. They are often able to buy in large quantities and can therefore use their size and influence to get favorable terms. Furthermore, the automobile industry's growing concern with cost reduction and efficiency makes it easier for buyers to demand lower prices and higher quality.
• Threat of Substitutes:
  The threat of substitutes in the market for automobile printed circuit boards is moderate. There are alternative products and materials that can be used in the automobile industry, but the requirements for reliability and performance in the automobile industry are very strict and therefore limit the number of viable substitutes. However, the development of new materials may in the future provide substitutes.
• Competitive Rivalry:
  Competition in the field of printed circuit boards is high, and is being driven by the presence of numerous established companies and the rapid technological development. In the race to improve performance and reduce costs, companies are constantly innovating in order to meet the changing needs of the auto industry, especially with the rise of electric and driverless vehicles. The fierce competition may lead to a price war and more aggressive marketing.

SWOT Analysis

• Strengths:
  • High demand for advanced electronic systems in vehicles.
  • Growing trend towards electric and autonomous vehicles requiring sophisticated PCBs.
  • Established relationships with major automotive manufacturers.
  • Technological advancements in PCB manufacturing processes.
• Weaknesses:
  • High production costs associated with advanced PCB technologies.
  • Dependency on a limited number of suppliers for raw materials.
  • Challenges in meeting stringent automotive industry standards.
  • Potential for rapid technological obsolescence.
• Opportunities:
  • Expansion into emerging markets with increasing automotive production.
  • Development of innovative PCB solutions for electric vehicles.
  • Partnerships with tech companies for integrated automotive solutions.
  • Increased focus on sustainability and eco-friendly PCB materials.
• Threats:
  • Intense competition from low-cost manufacturers in Asia.
  • Supply chain disruptions affecting raw material availability.
  • Rapid technological changes leading to increased R&D costs.
  • Regulatory changes impacting manufacturing processes and materials.

The automotive PCB market in 2024 is characterized by strong demand resulting from the growing importance of electric and self-driving cars, and a strong presence of major players. However, the market faces challenges such as high production costs and the dependence on a small number of suppliers. Opportunities for growth lie in emerging markets and in the development of new products, but competition and supply problems could reduce profits. Strategically, a focus on technology and on sustainable development is vital.