Iran Conflict Drives PCB Supply Disruption and Tech Costs
Printed circuit boards are emerging as a critical point of disruption for manufacturers worldwide as the conflict in the Middle East strains global electronics supply chains.
The war involving Iran has curtailed supplies of key raw materials and driven a sharp increase in PCB prices.
These components are foundational to virtually all electronic devices, from consumer goods such as smartphones and laptops to high-performance infrastructure supporting artificial intelligence and cloud computing.
The disruption represents a further challenge for technology manufacturers already contending with rising memory chip costs and persistent volatility across component markets.
It also underscores the widening impact of geopolitical instability on upstream supply chains, particularly in sectors reliant on petrochemicals and specialised materials. As S&P Global’s Kurt Barrow notes, “this is such a shock to the system for nations and companies”, underlining how geopolitical risk is now reshaping even the most deeply embedded supply chains.
At the centre of the disruption is the supply of high-purity polyphenylene ether resin, a critical input in PCB laminate production.
An early-April strike on Saudi Arabia’s Jubail petrochemical complex forced a halt in output, significantly constraining global availability.
The site is operated by SABIC, which accounts for around 70% of global supply of this material. Production has yet to fully resume, tightening supply conditions across the market.
Logistics constraints are compounding the issue.
Procurement uncertainty
Shipping routes in and out of the Gulf have been heavily affected by the conflict, extending lead times and adding further uncertainty to procurement strategies.
The market response has been swift. PCB prices, which had already been rising since late 2025 amid growing demand for AI infrastructure, have accelerated sharply.
Industry estimates suggest prices rose by as much as 40% between March and April alone, reflecting both supply shortages and a surge in demand as manufacturers seek to secure inventory.
Demand dynamics are playing a significant role in sustaining price inflation. Cloud service providers and hyperscalers continue to invest heavily in AI capabilities, driving sustained growth in high-end PCB demand.
With supply expected to remain constrained in the near term, many buyers are signalling a willingness to absorb further cost increases in anticipation of long-term shortages.
The global PCB market is projected to reach US$95.8bn in 2026, representing annual growth of more than 12%, according to industry forecasts.
However, this expansion is now occurring against a backdrop of rising input costs and supply uncertainty.
Manufacturers are already adjusting their strategies. South Korea’s Daeduck Electronics, a key supplier to firms including Samsung Electronics, SK Hynix and AMD, has begun discussions with customers regarding price increases.
Glass fibre and copper foil shortages
Executives indicate procurement priorities have shifted, with greater focus placed on securing raw materials rather than meeting delivery schedules.
Lead times for key inputs have extended significantly. Epoxy resin, for example, now faces waiting periods of up to 15 weeks, compared with around three weeks previously.
Shortages of other materials, including glass fibre and copper foil, are further exacerbating cost pressures.
Copper remains a particularly significant factor, accounting for approximately 60% of total PCB material costs.
Prices for copper foil have risen by as much as 30% this year, with momentum building in recent months. Suppliers warn that continued disruption in the Middle East could drive further increases across both resin and metal inputs.
As demand for advanced electronics continues to grow, particularly in AI applications, the resilience of these upstream supply chains is likely to come under increasing scrutiny.
