The Iran war, combined with the AI boom, has pushed up PCB prices! Prices soared by 40% in April, still stuck in a "structural shortage".

Industry insiders and executives have stated that the Middle East conflict has led to supply interruptions of key raw materials and raised prices of printed circuit boards (PCBs). This interruption poses a new blow to electronic manufacturers who have been struggling with soaring memory chip prices, and also highlights the expanding impact of the Iran war, which has caused severe disruptions to the supply chain, plastics, and oil supply. Middle East conflict affects key raw material supply In early April, Iran attacked Saudi Arabia's Jubail Petrochemical Complex, leading to the forced interruption of the production of high-purity polyphenylene ether (PPE) resin. PPE resin is a key raw material for manufacturing PCB laminates. According to sources, about 70% of the global supply of high-purity PPE resin is provided by the Saudi Basic Industries Corporation (SABIC), whose production is located in the Jubail Complex along the Arabian Gulf coast. Currently, the company has not been able to resume production, leading to a severe tightening of supply of this material globally. In addition, shipping in the Gulf region has also been severely disrupted by the war. A source stated that shortages of other key materials such as fiberglass and copper foil have also driven a significant increase in PCB prices. The source added that so far this year, the price of copper foil has surged by 30%, with the upward trend accelerating in March. Major Chinese NVIDIA Corporation PCB supplier Victory Giant Technology (300476.SZ) stated that copper accounts for about 60% of the total raw material cost in PCB manufacturing. The Chinese company warned earlier this month that the Middle East conflict may push up prices of key materials such as resin and copper. According to Victory Giant Technology, the cost of multilayer PCBs is about 1394 yuan per square meter (about $204) and the cost for high-end models used in AI servers is about 13475 yuan per square meter. A senior executive at South Korean PCB manufacturer Daeduck Electronics stated that the company has begun discussing price increases with customers. The company's clients include Samsung Electronics, SK Hynix, and AMD. Additionally, the executive mentioned that his top priority has shifted from "meeting customer demand" to "engaging with suppliers" as lead times for chemical materials like epoxy resin have extended from three weeks to 15 weeks. Rapid increase in PCB demand Nearly all electronic devices rely on PCBs, from smartphones, computers, TVs, cars, AI servers, medical devices, military radarsany device with electronic circuits will have at least one (usually multiple) PCBs. PCBs act as the "skeleton" and "nervous system" of electronic components, with the skeleton providing mechanical support for components like resistors, chips, and capacitors through copper foil traces on an insulating substrate. The nervous system provides prefabricated conductive pathways for the transmission of current and signals between components. Since the end of last year, driven by the growth in demand for AI servers, PCB prices have continued to rise. According to three industry sources, PCB demand has been rapidly accelerating since March as manufacturers race to secure raw material supplies and try to mitigate the impact of rising costs. Analysts at Goldman Sachs Group, Inc. stated in a recent report that PCB prices have risen by 40% in just one month in April compared to March. They added that cloud service providers are willing to accept further price increases as they anticipate demand surpassing supply in the coming years. Institutional data continues to be revised upwards. Research by Goldman Sachs Group, Inc. indicates that the global AI server PCB market is expected to grow by over 110% from 2026 to 2027, while traditional PCB demand growth is only around 3%. The cost of PCBs in AI servers accounts for 8% to 12%, compared to 3% to 5% in traditional serversdemand and value are rising in tandem, highlighting the dual pulling effect. Global PCB output continues to rise, structural shortages still exist In terms of industry scale, despite expectations of slowing demand in terminal markets such as smartphones and PCs and shrinking consumer-grade storage supply, the expansion of AI infrastructure continues to drive growth in the PCB industry. IEK Industry Intelligence Network estimates that global PCB output will reach $105.2 billion by 2026, with an annual growth rate of approximately 13.9%. Prismark predicts that the global PCB market will grow at rates of 12.5% (value) and 5.9% (area) by 2026, with the global PCB market expected to exceed $123 billion by 2030, with a five-year compound annual growth rate of approximately 7.7%. The global PCB industry will continue to operate within a window of supply and demand imbalance. With Taiwanese PCB manufacturers' capital expenditure estimated to rise to approximately NT$162.4 billion in 2026, representing a year-on-year increase of 63.7% (setting a new record high), the release of production capacity will require a longer construction and debugging period. The speed of repair in the supply chain of high-end materials (PPE resin, T-glass fiberglass, ABF film, copper foil) will determine when the cost curve and pricing pressure in the entire electronics manufacturing industry will ease.