Latest development in Surface Mounting Technology (hereinafter known as SMT) enabled electronic products to 
be light, thin, multi-function, highly reliable and come with low cost. After years of development, SMT technology has been very mature, and has been widely applied in computer, communications, consumer electronics and industrial automation industries. SMT in this article refers to the processing cost of PCBA manufacturing process, excluding the cost of PCB board manufacturing and components purchasing, as in the electronic manufacturing industry supply chain, production and manufacturing has become inseparable.

 

The size of China's SMT market in 2008 will reach 36.15 billion Yuan

 

China has become the global electronic products' processing and production base. The demand for China's SMT market come from various electronic products, including board and card production. The size of China's SMT market in 2007 reached 34.01 billion Yuan, up 10.2% over 2006; but as for growth rate, the growth rate has declined, the reason being that growth rate of China's electronic manufacturing products has been becoming flat. In 2008, because the growth rates of notebook computer, mobile phone and LCD TV have dropped largely, it is forecasted that the growth rate of China's SMT market will decrease to6.3%; in the next few years, China's SMT market's growth rate will continue to decline.

 

Mobile phone and computer board and card products the major demand force

 

Divided by application structure, network communications, consumer electronics and computers are the major application fields, which account for over 90% of the total market. Network communications are the largest application market, its market size in 2007 reached 11.71 billion Yuan, which accounted for 34.4% of the total market. Change in China's mobile phone output is the major factor of SMT market. As mobile terminal products, PCB board's size and component number have high requirements for SMT equipments' precision, but mobile phone PCBA board production has large competitive pressure. With global computer industrial transfer to China, China's PC, NB and display have become the largest production base globally. Board and card products have large contribution to SMT market, which include mainboard, display card, sound card and network card. The size of computer field in SMT market reached 9.77 billion Yuan, which accounted for 28.7% of the total market. In consumer electronic field, China's large consumer electronic product output base supports the demands of consumer electronic field in SMT market. China's air- condition, refrigerator/reefer outputs account for 70% of the global output; China's TV output ranks first in the world; China's STB and small home appliance products are export-oriented, but compared with products in other fields, consumer electronic products' technical content is low, such as air- condition, washing machine, refrigerator and microwave oven. Because of their simple computer board design and a few components, artificial plug-in could satisfy production demands, the patch price can be relatively cheap, so its contribution to SMT market is limited. Besides these three fields, automotive electronics and medical electronics account for 8.3% of the total market.

 

SMT foundry market share will continue to rise

 

In SMT foundry market, mobile phones are the most important products. After a few years of development, mobile phone foundry production includes PCBA production, components purchasing, shell production, display production and the whole machine assembly. Large EMS vendors have advantage in production matching, components purchasing, capacity utilization and client resources, such as Foxconn and Flextronics, they simplify products' process and reduce products' cost, which causes a certain threat to small and medium SMT enterprises' growth. Household products are SMT foundry market's main force. Household products have sale and production busy season and off-season, especially the white goods. Brand manufacturers couldn't expand production capacity in order to satisfy busy season demands, they will seek SMT foundry to satisfy demands, and therefore, household products' particularity drives the development of SMT foundry. Different from communications and consumer electronic field, computer manufacturers take charge of the assembly production of board, interface and shell, computer's board have special brand manufacturers, such as GIGABYT and ASUS, thus demands for SMT foundry are fewer in this field. As for automotive electronics products, the outputs of pre-installed and after-loaded market are small. Because of lacking scale benefit, its manufacturing cost is high, so automotive electronics products' small batch and various kinds decide automotive electronic enterprises carry through PCBA production by itself. Generally speaking, China's electronic manufacturing industry is getting mature with mature industrial specialization. Cost pressure of whole machine manufacturers is rising, which drives the development of future SMT outsourcing.

 

Development of SMT Market Slows Down due to Economic Situation

 

The global economic situation is extremely complicated in 2008. Economic crisis in USA leads to global financial crisis and most countries are facing economic downturn. As a result, demands on electronic terminal products around the world are dropping. In 2008H2, China's electronic manufacturing enterprises have suffered a lot from financial crisis. In 2009, global financial crisis is difficult to recover in short-term, downward economic cycle will continue. Affected by this situation, China's SMT market will face larger market difficulties in 2009, the market size will be same as the market size in 2008.