Major printed circuit board fabricators are beginning to report their quarterly earnings, and the figures give some reason for concern.

By all accounts, 2010 was a banner year for PCBs in all regions. Sales were up 34% year-over-year in Germany through October, 18% in North America through November, and at least 10% overall worldwide. TTM and M-Flex, among others, are reporting record sales. DDi beat the pack to the recovery and has continued to spike.

But while the specialists are doing great, not all is well.

While Multek, a top 5 PCB provider, grew in the low-double digits sequentially, profits are scarcer, with the company saying the unit won’t be breakeven until the end of the current quarter (and that assumes the no dip in orders). Sanmina experienced problems in one of its factories (rumored to be Kuching, Malaysia) that sucked the margin out of what should be one of its more profitable businesses.

And that’s my concern: Even during a period where demand peaked, the largest players are still not consistently profitable. Based on experience, when the market slows, that means more factory closures or continued losses, or both. Another likely response is dropping their drawers on pricing, a move that inevitably ripples through the broader market.

Twenty years (!) in the PCB market has taught me this: If you can’t make a profit in an up market, you can’t make one in a down market.

There’s only one way to resolve this conundrum. The capacity increases have to stop. Let the factories remain full for a few years. Push back on OEMs that constantly demand price reductions with little regard for rising commodity prices and currency fluctuations. Try working together as an industry on this.