The conflict in the Middle East is now putting fresh pressure on the global electronics industry by disrupting supplies of key raw materials used to make printed circuit boards, or PCBs.
These boards are found in almost every modern electronic device, including smartphones, computers, AI servers and other advanced hardware.
Industry sources and executives said the disruption has pushed PCB prices higher at a time when electronics manufacturers are already dealing with rising memory chip costs. The situation shows how the war in Iran is creating wider problems across supply chains, including plastics, oil and critical electronic materials.
The latest pressure came after Iran struck Saudi Arabia’s Jubail petrochemical complex in early April. The attack forced a halt in production of high-purity polyphenylene ether, or PPE resin, a key base material used to make PCB laminates.
SABIC, which operates at the Jubail complex on Saudi Arabia’s Gulf coast, produces around 70 percent of the world’s high-purity PPE supply. According to one source, the company has been unable to restart production, creating a severe worldwide shortage of the material. Shipping through the Gulf has also been heavily disrupted by the war.
PCB prices had already been rising since late last year because of strong demand from AI server makers. But demand has jumped sharply since March as manufacturers rush to secure raw materials and protect themselves from rising costs, three industry sources told Reuters.
Goldman Sachs analysts said PCB prices rose by as much as 40 percent in April compared with March. They added that cloud service providers are willing to accept further price hikes because they expect demand to remain higher than supply in the coming years.
The global PCB market is expected to grow 12.5 percent and reach $95.8 billion in 2026, according to a recent report from Prismark.
South Korean PCB maker Daeduck Electronics, whose customers include Samsung Electronics, SK Hynix and AMD, has already started talks with customers about price increases. A senior company executive told Reuters that the company’s focus has shifted from meeting customers to dealing with suppliers, as waiting times for chemical materials such as epoxy resin have stretched from three weeks to 15 weeks.
The price surge is also being driven by shortages of other major materials, including glass fiber and copper foil. One source said copper foil prices have jumped by as much as 30 percent so far this year, with the increase gaining speed in March.
Copper is a major cost factor in PCB production. Victory Giant Technology, a Chinese PCB supplier for Nvidia, says copper makes up around 60 percent of total raw material costs in PCB manufacturing. The company warned earlier this month that the Middle East conflict could drive up prices of key materials such as resin and copper.
If this article helped you, please consider supporting our work. Every small contribution keeps Abijita.com independent and running.
According to Victory Giant, multi-layer PCBs can cost about 1,394 yuan, or $204, per square metre. Higher-end PCB models used in AI servers can cost around 13,475 yuan, making any rise in raw material prices especially painful for manufacturers.
