This week’s takeover of Tyneside printed circuit board manufacturer Interconnection Systems (ISL) by US-based Viasystems could be followed by further rationalisations within the European PCB sector.
Further shakeouts lie ahead in the £3bn European market, according to a study for Durham University Business School.
PCBs are essential components used in most electronics products. They have a world market worth £17bn which is growing at 7-9% a year.
Technological change in the electronics industry is driving up levels of capital investment by pcb manufacturers, many of which are not able to keep up, said Brendan Hyland, author of the report.
`Mid-size companies could be forced out of the European market by larger players able to invest to produce low cost, high-quality, high volume product and small, niche players,’ he said.
The number of European manufacturers has fallen from 2,500 to about 500 in the past six years. According to Hyland, firms need to invest 10% of sales to stand still and more than 20% to keep a leadership position.
St Louis-based Viasystems, which is backed by a Dallas investment group, looks well on its way to reaching its aim of becoming the world’s biggest pcb producer. Last month it paid £129m for Forward Group, a £100m turnover manufacturer, employing 1,700 staff at its seven British sites.
ISL’s turnover last year was £142m. It employs 1,500 staff at its South Tyneside site, with a bigger facility to come on stream in North Tyneside by the year end.