PCB Price Composition and Cost Analysis

Tuesday, January 23, 2018
With the development of modern technology, PCBs are widely used now. The world’s PCB production development is up about 7% recently. WKK stated that 2017 was having its best year in recent five years.Printed circuit (substrate) production is forecasted to have double-digit growth in China during 2018 for the increasing demand from the market.
 
With the fierce competition and the pressure of cost down for electronic equipment and products,customers want better prices,while on the contrary the cost of printed circuit boards are been increasing since 2017 and this trend seems no stop in 2018 in China for many reasons mainly in raw materials shortage and cost increase,more strict environmental protection regulations from governments.
 
Here we would like to offer the information on PCB price composition and cost analysis so you know more clearly the factors affecting the price when you ask a quote from a PCB supplier.
 
Ⅰ PCB price composition
 
As we all know,material,specification and delivery time are the basic factors of price. There are also some other factors can affect the price composition.
      

1. Different materials result in the price variety 

    To ordinary double-panel, for example, the sheets generally have FR-4, CEM-3, etc., Board thickness from 0.6mm to 3.0mm, copper weight from 0.5oz to 4oz, all of these cause a huge price difference; there is a certain price difference about the solder mask ink, ordinary thermosetting oil and LPI. So the material result in the price variety.

2. Different production process result in the price variety

    Different production processes can result in different cost. Such as gold-plated and HAL, routing and punching, silk screen-pattern and dry film-pattern and so on these will result in different cost and lead to price variety.
 
         
                                                                                   Routing                                                                  Punching

3. Different difficulty of PCB results in the price variety

    Even if the same material, the same process, but the difficulty of PCB will also cause different cost. If there are 1000 holes on the two types of PCB, the hole diameter is more than 0.6mm of one type of PCB however the other is less than 0.6mm, this will cause different cost of drilling.If the two PCB are the same, but the line width and trace are different, one is more than 0.2mm, the other is less than 0.2mm, this will also cause different cost. Because of the more difficult of the board the higher scrap rate will be, thus the cost will increase and result in the price variety.
 
                        
 

      4. Different customer requirements will result in different prices

   The level of customer requirements will directly affect the yield of manufacturer, such as the FPY of PCB is 98% according to IPC-A-600E, class1, but the FPY may be only 90% according to class3. Thus it will resulting in different cost for manufacturers and finally lead  to the price variety

      5. Different PCB manufacturers result in different price variety  

   Even if the same product, but because of different equipment and technology it will also  form the different cost. Nowadays many manufacturers like to produce gold-plated board, because the production process is simple and cost is low. But there are also some manufacturers produce gold-plated board with higher scrap rate resulting in higher cost, so they prefer to produce HAL board, thus the price for HAL board is lower than gold-plated board from them.

       6. Different payment methods result in the difference of price

  At present, PCB manufacturer generally adjust the PCB price according to different payment methods, ranging from 5% -10%, thus resulting in price difference.

          7. Different region result in the price variety

  At present, geographically speaking the price is increasing from south to north, and the price in different regions are different. As a result, the regional differences also result in the price variety.
 
Ⅱ How to calculate PCB quote?
 
  1. Material charge (different material cost is different)
  2.  
   Top grade Copper foil                               Top qualtiy Copper-Clad Laminate
 
 
                  2. Drilling charge (the number of holes and the hole diameter affect the drilling charge)
                  3. Process charge (different specification lead to different process difficulties and the price will be different)
                  4. Manpower,utilities and administration cost
 
About the material the impact of the price mainly in the following points:
 
  1. The plate material: FR-4, CEM-3 are common for double-sided and multilayer PCB, and the price of them is also related to the board thickness and copper weight. FR-1, CEM- 1 are common for single-sided PCB and these material price has great difference with the double-sided and multilayer material.
 
 
      FR4                                                                CEM-1
        2. Board thickness: The common thickness is 0.4,0.6,0.8,1.0,1.2,1.5,1.6,2.0,2.4,3.0,3.4mm and the price difference is not great for the thickness of regular boards.
                  3. Copper weight: The thickness of copper are generally divided into: 18mm (1 / 2oz), 35mm (1oz), 70mm (2oz), 105mm (3oz), 140mm (4oz) and so on.
 
  
 
                   4. Raw material suppliers, we often use Shengyi, KB, GM,... etc.
 
 
 
Process charges:
 
  1. It depends on the lines on PCB, e.g. lines width/line space is less than 4 / 4mm, it will be calculated by another price.
  2. The charge will increase if there is BGA on the PCB.
  3. The surface finish will also affect the charge. The common surface finish are HAL (hot air leveling), OSP (Organic Solderability Preservatives), immersion tin, immersion silver, immersion gold and so on. Of course, different surface technology has different price. 
                                                             Lead  free  HAL                             OSP                                Immersion gold
 
      4. The charge also depends on the process standard. Which we commonly used are IPC2 class, but sometimes the customer needs higher standard. The common standard are IPC2, IPC3, enterprise standard, military standard, etc.. The higher the standard, The higher the price. Every PCB is customized by the customer. Therefore, the quotation of the PCB needs to make the cost accounting first. At the same time, it is also necessary to refer to the automatic calculation of the PCB by the computer. The material utilization of the typesetting on the standard size CCL is also need to be considered for the comprehensive quotation. The cost calculation of PCB industry is the most special and complicated in all industries. It needs to be calculated step by step according to the cost of material, labor, and manufacturing, from board cutting, laminating, forming to FQC, packaging, and finishing. Then based accumulated cost according to the order product number.
 
 
And different types of products, the process of the standard rates will be different. For some products such as blind buried board, immersion gold board, because of its specification or the special materials, they are required for some special calculation method. Similarly, the size of the drills used in the drilling process also affects the cost of the product, these are directly affect the calculation and evaluation of WIP costs and scrap costs.
In addition, PCB factory produce products for OEM, different customers customize different products thus there are few shared products.On the other hand, due to quality considerations, some customers may also specify the CCL or ink of the special manufacturer, in order to achieve the control requirements of its quality and cost.
 
❖ECN (Engineering Change Notice)
ECN often occurs in the production of PCB industry and it includes internal ECN and external ECN (customer project file changes). If the management is not proper, the frequent ECN for product designs can result in huge scrapped stock. Therefore, how to plan the application of ECN product design changes in the ERP system is a very crucial and significant issue.Changing the product and semi-finished part numbers regardless of large or small ECN changes will make it impossible for people in all divisions to find out if different product variants are compatible and if different part numbers are deliverable. Thus will result in the stock or WIP will generate unnecessary scrapping when the ECN product design changes.
 
❖BOM data planning and establishment
Basic BOM data planning and the establishment for the PCB industry are the same important as building a base of the building.If the foundation is not playing well, the building will not be able to build up. The basic engineering data includes two parts: 1. the basic data management of materials 2. product structure BOM management.
The PCB industry is a rapidly developing industry. Material usage and processes will change because of the improvement for technology. Some materials and processes will not be used after one year or two, some materials and processes will increase because of the improvement for production technologies and R & D technologies. Therefore, PCB industry will have a lot of changes in the basic data.
There is also a characteristic in PCB industry, considering the quality some customers will be specifically designated to accept only one or a few raw material manufacturers to produce materials.
 
Ⅲ  Some other factors related with cost
 
Price is very important for the factory and customer. Lower cost with good quality can be very competitive in the market. Also the delivery time is vital for the customers, they need the PCB to start their project for their terminal products.So the shorter delivery time is the final factor which affect the PCB.
 
Quick Turn PCB Service Capabilities from GLOBAL PCB
 
If want the shorter delivery time of PCB industry, it requires production management control from order to production completed the entire production process. Thus it requires the ERP system can provide production scheduling and WIP management in order to ensure the production delivery time and customer response speed.
 
Therefore, the most critical competitive advantage of PCB lies in: engineering research and development, production management, material control, manufacturing and outsourcing processing and so on, especially the WIP (WIP) control of on-site production management. If WIP mismanagement, there will be many mixed version, loss, stagnation spinning, WIP quantity inaccuracy, feed delay, increase the number of line changes, delivery undefined and other misconduct of the phenomenon.
 
There are many kinds of PCB products, generally based on the number of layers to distinguish, there are single-sided, double-sided, 4 layers board, 8 layers board, 10 layers board and so on. PCB products’ processing materials, technological process, process parameters, testing methods, quality requirements, will be prepared by the make instructions (MI) approach to the production department and the units issued by the processing instructions. 
 
For the 4 layers board and below products, the process is relatively simple, the card of the production process can be done from scratch to the end, the middle does not require to convert process card or replace process card. As for the blind buried plate products with more than six layers, different inner layers and outer layers have different circuit diagrams, technological process or process parameters ,and also use different molds and filming auxiliaries, etc., and need to use different make instructions(MI) and related documents, in the production process will also produce different production process card to control its different inner and outer layers of the manufacturing process and the number.
 
In the production process, multi-layer board will have different inner coding,must be using different coding to distinguish in the production process , and by different production process card to control the progress of its production.PCB assists products to transfer by the producing the bulk cards (LotCard), commonly known as the number. As the number of online products is large and the models is miscellaneous, so the production requires the number of operations, scrapped operations, rework operations must be simple, fast and fault-tolerant.
 
In the implementation process, the general-purpose ERP products are basically unable to deal with the business of respectively coding, respectively respectively, respectively scrapping, respectively feeding for inner and outer.  
Generally speaking, the more detailed the production plan, the more informative it is, the more valuable it is, and the more difficult it is to calculate it. The more rough the production plan, the less information, the lower the value.The process PCB involved is often more complex, the PCB engineering data and production of MI of a more complex process PCB multilayer take a long time to complete but customers often require a very urgent delivery.
 
The production management operation of PCB manufacturing industry belongs to   technological process manufacturing methods, so it will use the small scheduling (RunCard scheduling) management technology. Therefore,must it needs to paid attention to the following PCB production process characteristics for the scheduling process:
 
❖ Reflow processing
PCB processing is more representative of the process of processing. It’s different from the mechanical assembly processing mode, which is mainly composed of a raw material input, the followed input materials and processing technology are around the main raw materials for processing. And because of the multilayer board technology appeared,there is more and more reflow production of the PCB industry.
 
❖ Cutting and lamination
Whether the processing for substrate or the produce for PCB, it must go through a part of the continuous cutting. There is large original cloth in the previous paragraph, in order to meet the needs of subsequent processing in the continuous processing, it will be cut cut into a reasonable size for subsequent processing. Another process is lamination, whether the processing for substrate or the processing multilayer board, these are required for lamination, the two board with the same shape will be pressed together into a piece, especially in the case of multi-lamination .
 
For the cutting and lamination: the amount of raw materials will be needed when process a certain amount of finished products and make the number of panels into the number of single board, which calculate the input of raw materials. However, when there is waste / waste situation, combined with the proportion of parent-child labor single-use materials point of view, sometimes will resulting in an increase for workload and not fluent process flow.
 
❖ Single PCB scrap
Unlike the scrapped in the assembly industry, scrapped PCBs have single PCB scrapi in addition to scrapping scrapped products. The reason is that the lamination process is usually done on a large board, which generally produces a varying number of final single PCB. When a flaw occurs in the pre-compaction process, resulting in poor quality at some points on single PCB A or B, it is not possible for the producer to simply discard the large panel but continue to use the material and record the scrapped quantity for this single PCB.
 
For example, a large board A can be finally cut into 16 small PCBs but because of the process problem in the current processing there is a bad point on the board. So the processing result is the number of scrapped large board is 0 ( No whole scrap), while the scrapped single is 1. The amount will be backwards as the process flows backwards for production statistics and final product output. It should be noted at this time that the number of scrapped single PCB will be inherited by the double deck after the lamination. Because the A-board projection of the dead pixel on the B will cause bad spots after the lamination of them. The double-sided PCB resulting from it can not be used and will result in the same number of scrapped single PCB.
 
Summary
 
To accurately analyze the cost of the PCB is a complex task,and lots of work is needed for this. This report just gives our customers some guidelines when they want to know more about this and think how to reduce the cost. Questions and inquiries are welcome to us and discuss together how the cost is for your product PCB and how we save more than others.