Factors Driving Up PCB Costs Aren't Immaterial

Feb 1, 2006 12:00 PM
David Morrison, Editor

Space on the pc board is often referred to as “real estate.” And it's no wonder, given how board space, like land, is so precious in many applications. With system designers always trying to pack more electronic functionality into their designs, the area available for mounting components becomes more precious. This scarcity of space puts continual pressure on power supply and power system designers to limit the amount of pc board real estate required for power conversion and power management functions.

Of course, the preciousness of board real estate is widely recognized. But, did you know that the cost of the pc board itself is rising? This possibility may not send shivers down your spine given that the board often represents a small portion of the overall bill of materials in most designs. Nevertheless, pc board costs may be worth noting as a barometer of market conditions that affect other items on an electronic product's bill of materials.

Recently released market data indicates that the cost of materials and energy used to build pc boards is going up and these costs will get passed on to customers. These findings were reported by VdL (Verband der Leiterplattenindustrie, the German Printed Circuit Board Association) and the Electronic Components and Systems Division of ZVEI (the German Electrical and Electronic Manufacturers' Association; www.zvei.org).

According to these organizations, the prices of pc boards sold in Europe in the first quarter of this year will reflect the increases in pc board material and manufacturing costs. VdL and ZVEI note that the cost of the chemicals, tools and base materials required in pc board production rose last year because of unexpected cost increases in these items. The most notable surprise for material suppliers was a 41% rise in the cost of crude oil, which drove up energy costs (electricity and heating) as well as the cost of chemicals.

VdL and ZVEI report a number of cost increases affecting pc board production: The cost of gold used on surfaces rose 20%, while that of aluminum rose 24%. Similarly, copper prices were up 46%, affecting the cost of copper-clad base materials. Even more dramatic increases were exhibited by tungsten (used to make drilling tools), which rose by almost 300% during the past 12 months. Note that these common but increasingly expensive metals are also used in the packaging of various electronic components, heatsinks and other elements of design.

Though the figures noted above reflect the impact of rising pc board material costs in Europe, similar developments are happening elsewhere. For example, in Asia, prices for base materials have increased by 10% to 20%.

These cost pressures are being felt in the United States, too. A representative of a U.S.-based pc board fabricator recently indicated that his company is also seeing increases in material costs and passing them along to customers in North America.

In addition to the material costs cited previously, the cost of pc board laminates, such as the ubiquitous FR4 materials, are rising because of the need to comply with the RoHS directive.

Although most new laminates comply with RoHS restrictions in terms of their chemical composition, the requirement for lead-free assembly is driving up the cost of these laminates by perhaps 5% to 25%, according to one estimate. The use of lead-free solders with their higher melting points requires that the laminates be able to withstand higher reflow temperatures. And this factor leads to the use of more expensive laminate materials.

Here again, the pc board material issue connects with the bigger picture in electronics manufacturing, underscoring how RoHS requirements affect the whole electronics supply chain.

Although at first glance, pc board material costs would seem to be immaterial to most electrical engineers, knowing about these factors gives designers further insight into the impact of packaging throughout their designs. And these same issues also may give us some clues as to how electronics packaging will evolve in the future.