TAIPEI (Taiwan News) — Taiwan’s printed circuit board industry is tightening capital spending for a third year but output remains strong thanks to demand from AI and electronics, the Taiwan Printed Circuit Association said Wednesday.

PCB capital investment peaked at NT$128.2 billion (US$4.4 billion) in 2022 amid post-pandemic expansion and a global shortage of Ajinomoto Build-Up Film, a material used in chip packing, per CNA. Since then, spending has shifted toward high-end production lines and Southeast Asia due to geopolitical uncertainty and diversification.

The association said capital expenditure is expected to fall to NT$81 billion this year, reflecting a more cautious investment strategy, per MoneyDJ. It said the pivot marks a new phase of resource optimization, especially as demand softened and inventories built up in 2023.

Despite conservative spending, the industry’s output remains resilient. Domestic and overseas production reached NT$205.4 billion in Q1, up 13.2% year-on-year. Growth was led by a 29.7% surge in computing applications, particularly high-density interconnect, HDI, and multilayer boards for AI servers and PCs.

Multilayer boards posted NT$72.1 billion in output, up 17.6% from a year earlier. HDI boards reached NT$42.4 billion, rising 16.1% thanks to demand from AI and satellite use. Substrates climbed 13.7% to NT$27.9 billion, marking a full year of growth.

Flexible boards rose 7.9% to NT$46.8 billion on recovering smartphone and PC shipments. Only rigid-flex boards declined, falling 6.6% to NT$2.5 billion amid weak high-end phone and camera module sales.

TPCA noted that while headwinds remain, including currency swings, and cost pressures, the sector is stabilizing around a three-pronged strategy: high-end manufacturing in Taiwan, mass production in China, and expansion in Southeast Asia. This structure, it said, will help the industry weather risks and sustain momentum.