Ever-rising prices for raw materials are heaping great pressure on business operations of China-based PCB makers, with smaller ones even turning hesitant to take orders lest they should suffer more losses, according to industry sources.

Prices for copper foil, accounting for the largest proportion of PCB production costs, have been rising significantly along with the galloping copper prices on the London Stock Exchange and a rapid surge in battery demand for consumer and automotive applications, the sources said.

Even leading Chinese PCB vendors Shennan Circuits and Wus Printed Circuit are feeling the pinch of sharp material cost increases, and they can only strengthen production management, upgrade technology and communicate more with clients to tide over the crisis, the sources noted.

Smaller makers are bearing the brunt of the impact as they mainly produce lower-end PCBs for consumer applications with low gross margins, the sources said, adding that it is also difficult for them to pass the entire cost increases onto downstream clients.

Some smaller makers now are reluctant to take orders from clients, as the upward price adjustments for orders are always outpaced by those for raw materials and therefore the more orders they take, the more losses they may suffer, the sources said, adding that they are also in a disadvantageous position in vying for more supply of raw materials and will face ever-higher material prices as a result.

It remains to be seen whether the ongoing production cost increases will usher in a new wave of resources consolidation in the China PCB industry, the sources said.