Middle East Conflict Triggers Global PCB Shortage and Price Surge

The conflict in the Middle East has struck another critical global industry, disrupting supplies of essential raw materials used in the production of printed circuit boards (PCBs). These components are fundamental to nearly all modern electronic devices, from smartphones to AI servers.

Supply Chain Shock Hits Electronics Industry

This disruption represents a fresh blow to electronics manufacturers already struggling with rising memory chip prices. The escalation involving the United States, Israel, and Iran has created significant instability in logistics networks, as well as in the oil and plastics markets.

In early April, Iran launched a strike on the Jubail petrochemical complex in Saudi Arabia, forcing a halt in the production of high-purity polyphenylene ether (PPE). This material is essential for manufacturing PCB laminates.

According to a Reuters source, the company SABIC, which operates at the Jubail complex, has been unable to resume production, severely limiting global availability of high-purity PPE. The company accounts for approximately 70 percent of global supply of this critical material.

Prices Surge as Demand Accelerates

Price increases for PCBs had already begun late last year, even before the escalation of tensions in the Middle East. However, demand accelerated sharply in March as manufacturers rushed to secure raw materials and mitigate rising costs.

Analysts at Goldman Sachs reported that PCB prices rose by as much as 40 percent in April compared to March. Cloud service providers are reportedly willing to absorb further increases, expecting demand to outpace supply in the coming years.

In practical terms, this means prices are likely to continue rising, with end consumers ultimately bearing the cost.

Material Shortages and Industry Response

According to a recent report by Prismark, the global PCB market is expected to grow by 12.5 percent in 2026, reaching $95.8 billion.

A senior executive at South Korean manufacturer Daeduck Electronics, whose clients include major tech companies, told Reuters that the firm has begun negotiating price increases with customers.

At the same time, priorities have shifted from meeting customer demand to securing raw material supplies. Lead times for chemical materials such as epoxy resin have increased dramatically, from three weeks to as much as fifteen weeks.

The surge in PCB prices is also driven by shortages of other key materials, including fiberglass and copper foil. Copper foil prices have already risen by 30 percent since the beginning of the year, with growth accelerating in March.

According to China-based Victory Giant Technology, a major PCB supplier for AI hardware manufacturers, copper accounts for around 60 percent of total raw material costs in PCB production.

Outlook Remains Uncertain

Victory Giant Technology has warned that the Middle East conflict could further drive up prices for key materials such as resin and copper. Multilayer PCBs are currently priced at around 1,394 yuan ($204) per square meter, while high-end boards designed for AI servers can cost nearly ten times more, reaching approximately 13,475 yuan.

Industry experts see little prospect not only for price reductions but even for stabilization in the near term. Much will depend on how quickly the conflict is resolved, but even after that, normalization of supply chains is expected to take several months at a minimum.