Global IT and electronics makers are facing mounting cost pressures as the Middle East conflict disrupts the supply chain for printed circuit boards (PCBs), a core component in electronic devices.
Reuters reported on the 27th (local time) that prices of PCBs—essential for smartphones, computers, and AI servers—are surging as recent disruptions hit key raw material supplies.
Electronics makers, already grappling with rising semiconductor prices, are now shouldering another risk. The industry views the Iran war as potentially delivering a structural shock not only to the broader supply chain, oil, and plastics industries, but also to the IT and semiconductor supply chains. "PCBs are used in most electronic products, including smartphones and PCs, as well as in artificial intelligence (AI) servers," Reuters explained.
Behind the surge in PCB prices lies a halt in raw material production. Earlier this month, Iran's attack on Saudi Arabia's Jubail petrochemical complex halted production of high-purity polyphenylene ether (PPE) resin, a material essential for PCB manufacturing.
SABIC, which operates the facility, accounts for about 70% of the global supply of high-purity PPE. Production has yet to resume, causing global supply to shrink sharply.
PCB prices were already on an upward trajectory. Prices began rising late last year as demand for AI servers surged, and the climb accelerated from March as competition to secure raw materials intensified. According to Goldman Sachs, PCB prices jumped as much as 40% during April alone.
Adding to the pressure, cost burdens are mounting. Copper, a key material for PCBs, has risen by up to 30% this year, while supply shortages are worsening for other materials such as glass fiber and epoxy resin.
Reuters noted that Korean companies are also being affected. Korea's Daeduck Electronics has reportedly begun negotiations on price hikes with customers including Samsung Electronics (005930.KS), SK hynix (000660.KS), and AMD.
The industry expects that cost pass-through will be unavoidable if supply chain instability persists. "Securing raw materials is now more important than responding to customers," one industry official told Reuters.
The outlook for the global PCB market remains bright. According to market research firm Prismark, the PCB market is expected to reach approximately $95.8 billion in 2026, up 12.5% from the previous year.
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