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Why IS China PCB Circuit Board So Low Cost?


Printed circuit boards (PCBs) form the core of all electronic products. With electronics manufacturing increasingly shifting to China, a significant portion of PCB production now occurs in China. The country has firmly established itself as the predominant global supplier for low-cost PCB fabrication and assembly.

This article examines the different factors that enable Chinese PCB manufacturers to deliver boards at remarkably low prices compared to other countries.

Economies of Scale

China’s expansive electronics manufacturing industry and supply chain results in enormous economies of scale for PCB production. Some key aspects:

Huge PCB Demand

As the world’s largest producer of consumer electronics, automotive parts, industrial equipment etc, China has massive domestic demand for PCBs. Local sourcing is preferred by most OEMs.

High Production Volumes

Large PCB fabricators in China cater to both domestic and international needs. They leverage high volume orders for maximizing utilization and minimizing overhead costs.

PCB Clusters

Dense PCB manufacturer clusters around Shenzhen and Shanghai comprising hundreds of board shops divides the work while enabling specialization.

Mature Supply Chain

Availability of raw materials, chemicals, equipment and components locally avoids import duties and lead times – keeping supply chain costs low.

Competitive Market

Intense competition among hundreds of PCB makers ensures the lowest prices survive. This drives down the costs.

Labor Cost Advantage

PCB manufacturing in China benefits from lower labor costs in:

  • PCB assembly vs fully automated lines in the West.
  • Technical skills like engineering, programming, machine operation etc.
  • Overhead roles like finance, human resources, sales etc.

Typical hourly compensation costs:

RoleChinaUnited States
Factory worker$5$30
Middle management$20-$35$75-$120

However, labor costs are rising 15-20% yearly as China moves up the value chain. Automation is being rapidly adopted by PCB companies to offset this.

Raw Material Sourcing

PCB makers in China enjoy advantages in sourcing essential raw materials:

FR-4 Resin

Local supplies of flame retardant resin from major chemical plants avoids import duties.

Copper Foil

China’s huge copper production makes copper foil readily available for PCB laminates.

Other Materials

Laminating films, etching chemicals, tin, gold, acids, solvents etc. can be sourced locally at low cost.


Sourcing passive and active components from nearby Guangzhou and Shenzhen electronic markets reduces lead times and costs.

PCB Equipment

Many international PCB equipment manufacturers have sales and service operations in China for faster procurement. Refurbished equipment is also available at lower cost.

Supporting Infrastructure

pcb transmission line
pcb transmission line

China offers an unparalleled infrastructure to facilitate low-cost, high volume PCB production:


New large factories with ready availability of industrial land, power, water allows massive scaling.


Efficient sea and air routes for global exports along with a vast road network reduces shipping costs.

Technical Support

Many PCB chemical and equipment vendors have technical operations in China for rapid maintenance and process optimization.


The complete PCB supply chain – from copper and laminate suppliers to test equipment vendors to component makers are present locally.

Investor Friendly Policies

Tax incentives, easier approval processes and government subsidies encourage manufacturing investments.

Process Optimization

Chinese PCB factories have optimized processes for high efficiency:

  • Automation – Extensive use of automated manufacturing lines improves throughput while reducing labor and errors.
  • Scale – Large batch sizes allow maximum productivity with lower changeover and setup costs.
  • Lean – Waste and inefficiency are eliminated by lean manufacturing principles.
  • Technology – Advanced manufacturing with automation along with adoption of cutting edge technical processes.
  • Standards – Following world class quality and environmental management standards like ISO 9001, ISO 14000, IATF 16949 etc.

Limited Overheads

Several structural advantages of Chinese PCB companies allow lower overheads:

  • Limited R&D – Most focus on high volume fabrication vs new technology development. R&D costs are minimized.
  • Sales Network – Leverage resellers and distributors vs large direct sales teams.
  • Minimal Marketing – Spend little on advertising/brand building with majority orders coming via word-of-mouth and referrals.
  • After-sales Service – Post-delivery support requirements are still evolving. Service costs are less.
  • Working Capital – Readily available capital financing at competitive rates allows bulk buying for better discounts.

Product Mix

Most Chinese PCB makers target less complex board technologies which have lower costs:

  • High layer count PCBs (more than 16 layers) typically manufactured elsewhere.
  • Maximum 6-8 fine line/space capability vs advanced 3/3-4/4 lines.
  • Focus on material sets like FR-4 and CEM-3.
  • Mainly standard rated processes. Lesser high-reliability boards.
  • Concentration on medium and large volumes.

This optimized product mix targets the industry’s broader needs while requiring lower investments in advanced process capabilities.

Environmental Factors

Certain environmental factors also enable lower PCB production costs:


Industrial electricity rates in China average $0.08/kWh compared to $0.10-$0.15/kWh in Europe and North America.


Water required for PCB production costs under $2 per ton in China vs up to $20 per ton in advanced economies.

Safety Standards

Less stringent safety norms compared to Western nations reduce compliance overheads.

Pollution Control

Weaker environmental regulation has provided cost savings historically. But standards are catching up now with increased inspections and penalties.

Impact of Rising Costs

Several factors in China are now increasing PCB costs:

  • Rising labor wages
  • Increasingly stringent environmental regulation
  • Higher testing and compliance requirements
  • Scaling existing infrastructure as land costs increase
  • Reduced tax incentives as China graduates to a mature economy
  • Geo-political factors that increase supply chain risks

However, China remains well positioned to sustain a competitive advantage through superior logistics networks, vast talent pool, domestic demand and efficient processes.

Cost Savings Summarized

The chart below summarizes the typical cost savings achievable for a 2-layer US made PCB vs. sourcing from China for small volumes around 500 boards:

Cost ComponentUS-madeChinaSavings
PCB Fabrication$2000$100050%
Labor (assembly)$500$20060%
Total Cost$4500$260042%

And for medium volumes around 5000 boards:

Cost ComponentUS-madeChinaSavings
PCB Fabrication$5000$250050%
Labor (assembly)$2000$50075%
Total Cost$23000$1370040%


PCB manufacturing in China offers unbeatable value in terms of price, technology and quality for most electronic applications today. The combination of an efficient PCB industry ecosystem, lower costs, optimized processes, infrastructure, scale and product mix provides a sustainable competitive advantage that will likely persist even as labor costs rise. For OEMs in cost-driven segments, China offers the ideal low-risk manufacturing location. With both local and foreign owned manufacturers expanding rapidly, China will continue furthering its dominance in PCB production for the global electronics industry.


Does low cost mean lower quality for China PCBs?

Not necessarily. Many Chinese manufacturers produce very high reliability PCBs. They have imported state of the art equipment and follow best practices for quality. Rigorous testing also ensures all specifications are met.

What are some key measures PCB buyers should take to ensure quality?

Visit the manufacturer facilities for process audit. Review their certifications. Do sample inspections and electrical/functional testing. Ensure robust specifications. Maintain oversight over BOMs and product improvements.

Will automation take away the labor cost advantage in China?

It will over time. But automation requires huge upfront capital investment. There is also a skill and technology gap compared to developed nations which will sustain the cost edge.

Does China dominate higher layer count and HDI PCBs?

Currently, China’s share of global production is smaller for high layer count and HDI boards since they require advanced technical expertise which takes time to build. The country still lags behind Japan, Taiwan and Korea in this segments but is catching up rapidly.

Which are the leading Chinese PCB manufacturers?

Top makers like Founder, AT&S, TTM, Tripod, Shennan Circuits, Kinwong, HannStar and Viwe supply PCBs globally. Unimicron, Zhen Ding are growing rapidly. Numerous mid-sized makers also compete actively.




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