Company rankings don’t tell the whole PWB story.

In September in Printed Circuit Design & Manufacture, Dr. Hayao Nakahara published his annual rankings of the world’s largest PWB fabricators. While the list itself is notable, it was just as telling for what didn’t change from the year before.

Some common threads remain. Big fabricators are growing much faster than their smaller counterparts, with much of the growth coming from factories situated outside their traditional home nations.

Japanese and Taiwanese fabricators, for example, produce billions of PWBs elsewhere – Dr. Nakakara estimates $4 billion worth each – usually in China. No slouches themselves, U.S. manufacturers produced more than $2 billion offshore, a phenomenal figure given that the domestic market produced only slightly more than twice that sum.

Dr. Nakahara turned up 95 PCB fabricators with 2006 sales of $100 million or more (including through mergers), up by two companies from 2005. The year-over-year growth of the top 95 fabricators was 16.2%, while the composite world growth was 13.1%.

Ibiden remains the world’s largest fab, with sales forecast to hit $2 billion this year; Japanese-based companies own the largest share (32.2%) thanks in large part to their dominance of the chip-packaging substrate market.

The wildcard, as in contract assembly, is Foxconn. The company produced about $360 million worth of boards in its two rigid and two flex plants in Shenzhen. It planned a huge PCB complex in Yan Tai, Dr. Nakahara reported, although there seems to be some question over whether construction remains ongoing.

There were surprises. Most of the growth was organic, versus through mergers of consolidations. Profitability was “much higher” for fabricators of traditional substrates than for those who make IC and HDI boards. No fabricators from Russia made the list, despite that nation’s massive defense and aerospace capital expenditures. And no domestic Chinese fabricators made the list, despite that country’s status as the electronics epicenter of the world. (Founder Zhuhai MLB and Shennan Circuits are closing in.)

To that latter point, look out. As Dr. Nakahara points out, China’s wastewater regulations are a veritable wrecking ball to the nation’s investment in manufacturing infrastructure. “In many crowded areas,” he writes, “it is no longer possible to expand, unless the PCB fabricators are prepared to spend a fortune to equip the factory with a complete water recycling facility.” In some areas, 7 to 8% of the manufacturing cost goes to wastewater treatment, Nakahara estimates. That’s up from about 2%. By contrast, the labor cost is 4%. Clearly, that situation cannot continue.

Elsewhere in Asia, Nakahara asserts Vietnam and Thailand will be the next investment hot spots, with the former nearly doubling to $500 million within a few years. He sees Singapore’s role lessening and Malaysia straddling the fence. Korea, on the other hand, is “sandwiched between Japanese technologies and Chinese pricing.” He dismisses India’s near-term influence, noting the country’s total output was just $200 million in 2006.

As for 2007, Dr. Nakahara forecasts more of the same. While first-half global PWB sales were just 2 to 3%, the Top 25 fabricators are growing at a double-digit clip.

Mike Buetow is editor-in-chief of Circuits Assembly; mbuetow@upmediagroup.com. This column appears monthly.