Chinese PCB Manufacturer Ceases Operations Amid Economic Slowdown

A major electronics manufacturer in southern China has shut down operations, adding to signs of mounting pressure on the country’s manufacturing sector as weakening demand, rising costs, and industrial restructuring weigh on private businesses.

Dongguan Wuzhu Electronic Technology Co. Ltd. and its affiliate, Dongguan Wuzhu New Energy Technology Co. Ltd., announced on May 28 that they would cease all production and business activities effective immediately, citing changes in market conditions and failed investment plans that left the companies unable to continue operating, according to a notice published via the Hunan Printed Circuit Association.

The decision was approved by shareholders and made in conjunction with ongoing court-supervised pre-restructuring proceedings. The firms said employee wages would be settled by June 6, while severance payments and other labor-related claims would be addressed through legal channels.

The shutdown marks a notable setback for a company once regarded as one of the larger printed circuit board (PCB) manufacturers in southern China.

Founded in 2010 with registered capital of 350 million yuan ($52 million), Wuzhu Electronic specialized in the development and production of double-sided circuit boards, multilayer boards, high-density interconnect boards, and flexible printed circuits.

Its products were used in telecommunications equipment, automotive electronics, and medical devices. The company also held multiple patents and was considered a significant player in the region’s electronics supply chain.

Guangdong’s PCB Industry Loses Momentum

An industry insider said Wuzhu’s closure reflects broader challenges facing China’s PCB sector, particularly in Guangdong Province, long a hub for electronics manufacturing.

Hu Jianbo, who works in the PCB industry in Guangdong Province, told The Epoch Times that small and medium-sized manufacturers are being squeezed by shrinking orders, intense price competition, and rising operating costs.

“In the past, there were plenty of orders, and companies believed that expanding factories and increasing production capacity would keep them competitive,” he said.

“Now orders have declined, while labor and material costs continue to rise. Many business owners borrowed heavily to expand during the boom years, and now they’re struggling under debt burdens without enough business to support operations.”

According to Hu, Guangdong’s PCB industry experienced its strongest growth from the early 2000s through roughly 2018, when manufacturers benefited from the relocation of electronics production from Taiwan, Hong Kong, Japan, Europe, and the United States.

“At that time, Shenzhen, Dongguan, and Huizhou had dense clusters of PCB factories and complete supply chains,” he said.

“A large share of China’s PCB output was concentrated in Guangdong [Province]. Today, labor costs are much higher, orders are moving elsewhere, and many factories have either relocated or shut down.”

Business Owners Cite Regulatory Pressures

Some private business owners say economic headwinds have been compounded by growing regulatory scrutiny.

A manufacturing executive in Dongguan, identified only by his surname, Bi, out of fear of reprisal, told The Epoch Times that tax inspections and compliance reviews have become more frequent as economic conditions worsen.

“[Authorities] have been auditing companies throughout Guangdong [Province] this year,” Bi said.

“Many business owners feel they are under constant scrutiny, making it increasingly difficult to maintain operations.”

Bi also criticized what he described as rapidly shifting industrial policies that encourage businesses to move into sectors favored by regime planners.

“In recent years, the focus has shifted from real estate to renewable energy and now to artificial intelligence,” he said. “Many companies feel pressure to adapt to whichever industry is being promoted at the moment.”

Once a beneficiary of China’s rise as the world’s manufacturing hub, Wuzhu Electronic expanded during years of rapid growth in Guangdong Province’s electronics sector.

Its closure underscores the challenges now confronting many private manufacturers as slowing demand, rising costs, and industrial restructuring reshape China’s export-oriented economy.

Wang Xin contributed to this report.