The Middle East hostilities have begun to reverberate through the global electronics supply chain, tightening availability of core materials and driving up the cost of printed circuit boards - the foundational components used in devices from smartphones and laptops to cloud and AI servers.
Industry executives and sources say the disruption grew acute after an early April strike on the Jubail petrochemical complex in Saudi Arabia. The attack forced a suspension of production of high-purity polyphenylene ether - PPE - resin, a critical base material in PCB laminates. One source told industry contacts that the site operator, SABIC, which supplies roughly 70% of the world's high-purity PPE and manufactures at Jubail on the Gulf coast, has not been able to restart output. That shortfall has dramatically tightened global supplies of the resin.
Compounding the resin shortage, shipping into and out of the Gulf region has been severely disrupted by the conflict, creating additional obstacles to moving materials and finished goods along established supply routes.
PCB prices had already been rising since late last year, driven in part by growing demand for AI servers. According to industry contacts, demand intensified sharply in March as manufacturers raced to secure raw materials and blunt the effects of fast-rising input costs. Analysts at Goldman Sachs noted that in April alone PCB prices jumped by as much as 40% compared with March. Cloud service providers are reportedly prepared to tolerate further price hikes because they expect demand for server-grade boards to outstrip available supply in the coming years.
Market research firm Prismark projects the global PCB industry will expand 12.5% to reach $95.8 billion by 2026.
At the manufacturing level, Daeduck Electronics - a South Korean PCB maker that supplies customers including Samsung Electronics, SK Hynix and AMD - has started conversations with its clients about raising prices, a senior company executive told Reuters. The executive, who declined to be named given the sensitivity of the matter, said the company's focus has shifted from meeting customer demand to securing supplies from its own vendors. Lead times for chemical inputs such as epoxy resin, the executive said, have stretched to about 15 weeks from roughly three weeks previously.
Industry sources attribute the sharp climb in PCB costs not only to resin scarcity but also to shortages of other essential materials such as glass fiber and copper foil. One source said copper foil prices have risen as much as 30% so far this year, with the rally picking up in March.
Copper represents a substantial share of raw material expense in board production. Victory Giant Technology, a major Chinese PCB supplier that works with Nvidia, estimates that copper accounts for approximately 60% of total raw material costs in PCB manufacturing. That firm warned earlier this month that the Middle East conflict could further elevate prices for key inputs including resin and copper.
Price levels for multi-layer PCBs vary widely by application. Victory Giant provided indicative figures showing multi-layer boards can cost roughly 1,394 yuan per square metre - equal to about $204 - while higher-end board models designed for AI servers can be priced around 13,475 yuan per square metre.
The combination of a concentrated global supplier for high-purity PPE, disruptions to Gulf shipping, surging copper and foil prices, and rapidly growing demand for server-grade boards has created a multi-front squeeze on PCB supply chains. Manufacturers and cloud operators are adapting by seeking alternate sources where possible, engaging in price talks, and extending lead times, but industry participants say the situation remains fluid as supply responses and market demand evolve.