Asia-Pacific Conformal Coating Market Research Report: Forecast (2022-2027)

Market Definition

A conformal coating is a thin polymeric film that is applied to a Printed Circuit Board (PCB) to protect the board & its components from the environment & corrosion. It is mainly used to prevent electronic circuits from severe environmental conditions such as high humidity, a range of aerial contaminants, and varying temperatures. The conformal coating has major applications in various industries such as military, automotive, aerospace, and energy. Additionally, the rising expansion of the electronic industries across the Asia-Pacific region is expected to escalate the demand for conformal coating in the coming years.

Market Insights

The Asia-Pacific Conformal Coating Market is projected to grow at a CAGR of around 6.25% during the forecast period, 2022-27. The factors responsible for the market growth are the rising manufacturing of consumer electronics to cater to the global demand, burgeoning initiatives led by the government & private players to manufacture printed circuit boards, and the constant R&D investments towards coating technology that have augmented the demand for conformal coatings in the region. Moreover, the conformal coatings can be applied directly to the printed circuit boards (PCBs), as it acts as a shield to the board & also protects its components from corrosion & environmental damage. Therefore, there has been a constant incline in demand for conformal coatings. Furthermore, Asian countries, such as China, South Korea, Vietnam, India, etc., have robust manufacturing bases for consumer electronics, medical devices, automotive, and telecommunications, among others.

Notably, the government of countries, especially India, has taken significant steps toward creating an ecosystem for semiconductor manufacturing, which is further expected to cement the market growth in the forthcoming years. Additionally, the major global electronic manufacturing players source PCBs from Asia, owing to the large availability of low-cost raw materials, resulting in cost reduction of the final product. Due to this, there has been an enormous production of PCBs in the region. Subsequently, the application of conformal coatings in PCBs has widened its scope over the historical years.

In this regard, the conformal coating manufacturers have also been involved in the continuous Research & Development (R&D) to bring innovation to the conformal coatings industry & develop cutting-edge materials, such as Nano-materials, etc., for conformal coatings. Hence, this has proliferated the demand for conformal coatings in the region & is expected to present lucrative opportunities in the upcoming years.

Impact of COVID-19 on the Asia-Pacific Conformal Coatings Market

During 2020, the Asia-Pacific Conformal Coatings market declined significantly as a result of the COVID-19 pandemic. The automotive & aerospace industry was the worst-hit industries, among others. Additionally, the automotive sector faced a significant decline in the sales of passenger & commercial vehicles across the region, owing to low demand from the consumer & disruption in the supply chain & the shortage of the semiconductor chips globally. As a result, the vehicle production was put on hold. However, the supply crisis & chip shortage forced vehicle manufacturers to reduce their production targets, lowering the requirement for conformal coatings used on the chips. Furthermore, semiconductors are an important component of consumer electronics such as smartphones, cameras, and computers. As a result of the chip shortage in 2020, consumer electronics sales fell, resulting in a decline in the growth of conformal coatings. Further, the demand for conformal coatings is expected to recover gradually in the upcoming years as the supply of semiconductor chips is resumed.

Market Segmentation

Based on the Applying Format:

• Liquid
• Aerosol

Of them all, Liquid Conformal Coatings acquired a prominent share in the Asia-Pacific Conformal Coatings market during 2017-21. The liquid conformal coatings help in protecting PCBs & advanced substrates from thermal shock, vibration dampening, corrosive liquids, moisture, and other adverse environmental situations. Liquid conformal coatings can be applied through brushing & dipping methods, thereby, enabling deep penetration of coatings into the PCB components. However, the process requires more time & effort.

On the other hand, aerosol conformal coatings have proven to be an economical option, which provides higher efficiency by ensuring long product life cycles for harsh marine, automotive, medical, and consumer electronics applications. In addition, the manufacturers have assessed the growing demand for portable conformal coatings & have strategically positioned their product offering by expanding their product portfolio through new product launches, strategic acquisitions, investing in R&D, etc. Hence, this has expanded the scope of portable conformal coatings in the region.

Based on Material:

• Acrylic
• Silicone
• Epoxy
• Urethane
• Parylene
• Others (Nanocoatings, Styrenated block-copolymer, UV Cure, etc.)

Among these, Acrylic, Silicone, and Urethane are among the most sought-after materials used for conformal coatings due to their ease in application, excellent protection against abrasion & moisture, and high resistance to solvents, among others. Silicone material provides high resistance to various temperatures & has a very low thermal coefficient of expansion, whereas urethane provides high humidity resistance with quick cures to moisture, heat, ultraviolet, etc., due to rapid cross-linking of the molecules after mixing, which has extended its application in the semiconductor industry.

Conversely, epoxy coatings have mostly been applied to PCBs that are exposed to harsh environmental conditions, such as corrosion or high-impact damage. Moreover, the unmatched electrical insulation provided by parylene material coupled with its excellent temperature resistance has augmented its use as a conformal coating. However, the process of applying this material to circuit boards requires highly specialized equipment, which increases the overall cost of the process, making its demand limited during 2017-21.

Based on End User:

• Automotive
• Consumer Electronics
• Medical
• Telecommunications
• Aerospace & Defense
• Others (Industrial, Power, Energy, etc.)

Here, Consumer Electronics acquired a significant share in the Asia-Pacific Conformal Coatings Market during 2017-21. Asia is known as the hub for manufacturing consumer electronic products, such as smartphones, tablets, refrigerators, computers, wearables, and other gadgets. The countries such as China, Japan, South Korea, Hong Kong, Taiwan, etc., have gigantic manufacturing capabilities with enormous export capacities to the world. According to the Allianz Trade, Taiwan was one of the world’s largest exporters of electronic integrated circuits, with an approximately 20% share of global flows as of 2020. This has led to the requirement for conformal coatings in these consumer electronics to give them durability against any damage & make them ruggedize, thereby extending the product life.

• In 2021, Taiwan Semiconductor Manufacturing Co. announced an investment of USD8.8 billion to build a massive chip plant in Japan. Initially, the focus would be on 22-nanometer & 28-nanometer specialty technology. The mass production of semiconductors is slated to commence in 2024.

Some notable global electronic giants, such as Apple, Xiaomi, Sony, LG, Samsung, etc., have their manufacturing & assembly bases in Asia. Therefore, the increasing demand for consumer electronics across the globe is expected to accelerate the manufacturing of semiconductors. In the aftermath, the demand for conformal coatings would witness a positive growth outlook during 2022-27.

Country Landscape

Geographically, the Asia-Pacific Conformal Coatings Market expands across:

• China
• India
• Japan
• South Korea
• Singapore
• Taiwan
• Rest of Asia-Pacific

Of all the countries, India experienced an assertive incline in the Asia-Pacific Conformal Coatings market, owing to the increasing manufacturing of electronics, such as smartphones & other white goods. India has a massive manufacturing & industrial ecosystem & is also a major purchaser of consumer electronic goods due to its sheer customer base. Consequently, the major electronic manufacturing giants have established their production bases in India to reduce costs & cater to the regional market as well.

Furthermore, the manufacturing giants, such as Samsung, LG, Panasonic, Lenovo, etc., have set up manufacturing settings in the country, which would present numerous opportunities for the application of conformal coatings. For instance:

• In 2021, Optiemus Electronics announced a strategic partnership with Wistron, an Apple's contract manufacturer, to stimulate the production of electronics in India under the Production-Linked Incentive (PLI) scheme. The USD176 million deal is expected to accelerate the manufacturing of mobile devices, personal computers, telecom products, electric vehicles, etc., in India.

Recent Development by Leading Companies

• In 2020, Shin-Etsu Chemical Co., Ltd. developed advanced materials, such as Thermoset Ultra-Low Dielectric Resin & Quartz Cloth for 5G-related products. These would be used for electronic devices, printed circuit boards, IC substrates, etc.

Market Dynamics:

Key Driver: Burgeoning Government & Private Initiatives for Manufacturing of Consumer Electronics

The rising initiatives taken up by the government of countries, such as India, southeast countries, such as Indonesia, Vietnam, etc., to attract foreign investments for promulgating the domestic manufacturing of consumer electronics in the country has stimulated the demand for conformal coatings during 2017-21. The Asia Pacific has been a hub for producing and exporting consumer electronics to the world. While China has been at the core of the manufacturing ecosystem, the players in this space are rapidly shifting their production bases from China to other nations, such as India, etc., in the region, which has expanded the usage of conformal coatings used during the electronic manufacturing. For instance:

• In 2021, the government of India announced a USD10 billion incentive plan to lure foreign semiconductor players to manufacture semiconductors in the country. As a result of this announcement, Tower Semiconductor, Foxconn, a consortium of Diversified natural resource groups, and Vedanta Limited are planning to set up manufacturing operations in India.

Therefore, this has positively impacted the demand for conformal coatings in the region & is expected to present diverse opportunities in the upcoming years as well.

Possible Restraint: High Cost of Replacement & Repairment of Conformal Coatings

In comparison to other coating materials, conformal coatings have a higher replacement & repair cost, which has discouraged several buyers from switching. The price of silicone-based coatings is high, so conformal coating manufacturers are implementing new technology to reduce the raw material cost. In addition, these coatings don't provide an immediate return on investment but can be recovered over time. Thus, end-users have been reluctant to invest fully in conformal coating materials due to this reason. Therefore, the high replacement & repair cost of conformal coatings resulted in hampering the market growth.

Key Questions Answered in the Market Research Report:

1. What are the overall statistics or estimates (Overview, Size- By Value & Volume, Forecast Numbers, Segmentation, Shares) of the Asia-Pacific Conformal Coatings Market?
2. What are the region-wise industry size, growth drivers, and challenges?
3. What are the key innovations, opportunities, current & future trends, and regulations in the Asia-Pacific Conformal Coatings Market?
4. Who are the key competitors, their key strengths & weaknesses, and how do they perform in the Asia-Pacific Conformal Coatings Market based on the competitive landscape?
5. What are the key results derived from surveys conducted during the Asia-Pacific Conformal Coatings Market study?