Image Credit : Reuters
The ongoing conflict linked to Iran is sending shockwaves through the global electronics industry, disrupting the supply of critical raw materials and sharply increasing the cost of printed circuit boards (PCBs)—a foundational component in everything from smartphones to advanced AI servers.
According to industry executives and supply chain sources in Beijing and Seoul, the latest disruption compounds existing pressures on electronics manufacturers already struggling with elevated memory chip prices. The widening fallout underscores how geopolitical instability is increasingly entangled with global tech production.
A key turning point came earlier this month when Iran targeted a major petrochemical facility in Jubail, Saudi Arabia. The strike forced a shutdown in the production of high-purity polyphenylene ether (PPE) resin, an essential material used in PCB laminates.
The impact has been particularly severe due to the central role of SABIC, which produces roughly 70% of the world’s high-purity PPE supply at its Jubail operations. With output still offline, global availability of the material has tightened significantly, sources say. Compounding the issue, shipping routes across the Gulf region have also been disrupted, further constraining supply flows.
PCB prices had already been trending upward since late 2025, fueled by surging demand for AI infrastructure. However, the pace of increase accelerated sharply in recent weeks as manufacturers rushed to secure dwindling raw materials. In April alone, prices jumped by as much as 40% compared to March, according to analysts at Goldman Sachs.
Despite the steep rise, major cloud service providers appear willing to absorb higher costs, betting that long-term demand for AI hardware will continue to outstrip supply.
Market forecasts reflect this optimism. The global PCB sector is expected to grow by 12.5% to reach $95.8 billion in 2026, based on estimates from industry research firm Prismark.
Manufacturers are already adjusting. Daeduck Electronics, whose clients include Samsung Electronics, SK Hynix, and AMD, has begun negotiating price increases with customers. A senior executive at the firm said supply chain constraints have shifted priorities, with procurement now taking precedence over client engagement.
Lead times for essential chemical inputs, such as epoxy resins, have stretched dramatically—from around three weeks to as long as 15 weeks—highlighting the depth of the disruption.
Beyond PPE resin, shortages of other core materials—including glass fiber and copper foil—are also driving up costs. Copper foil prices alone have surged by as much as 30% this year, with momentum building since March.
Copper remains the single largest cost component in PCB manufacturing, accounting for roughly 60% of raw material expenses, according to Victory Giant Technology, a major supplier to Nvidia. The company recently warned that escalating tensions in the Middle East could push prices for both resin and copper even higher.
Current pricing reflects the strain. Standard multi-layer PCBs are now priced at approximately 1,394 yuan ($204) per square meter, while high-end variants designed for AI servers can reach as much as 13,475 yuan, underscoring the growing cost burden across the tech supply chain.
Meet Nandini Shukla, a dedicated branding and marketing professional with over three years of experience in the industry. Known for her result-oriented and hard-working nature, Nandini specializes in enhancing brand aesthetics and formulating effective marketing strategies. Her passion lies in creating content and strategies that are not only visually appealing but also impactful, ensuring that each brand she works with leaves a memorable impression.
At technewsme.com, Nandini combines her keen eye for beauty with her expertise in marketing to offer unique perspectives and transformative solutions. She is committed to helping clients achieve their goals by blending form and function in every strategy she develops. Join her on this journey as she shares insights and tips to elevate your brand in the dynamic world of marketing.
