The ongoing conflict in West Asia has disrupted global supply chain of Printed Circuit Boards (PCBs)– a core component used in almost all electronic devices, including smartphones, computers, and AI servers. The crisis has intensified existing pressures on the electronics industry, which is already facing rising memory chip costs, and has further impacted supply chains related to plastics and oil.
The demand surge is largely linked to rapid expansion of AI servers, particularly by cloud service providers. The global PCB market is projected to grow by 12.5% to reach $95.8 billion by 2026.
Key Developments
- Supply disruptions were triggered by shutdown of production at Saudi Arabia’s SABIC, which accounts for around 70% of global high-purity PPE (Polyphenylene Ether) supply. The company’s operations at Jubail complex (Gulf region) have not resumed, leading to a global shortage of critical raw materials.
- PCB prices have surged up to 40% since March 2026, driven by supply constraints and rising demand.
About Printed Circuit Boards (PCBs)
PCBs are rigid or flexible platforms used to electrically connect and mechanically support electronic components through conductive copper pathways.
Raw Materials
- Resins: High-purity PPE and epoxy resins used in laminates
- Copper Foil: Accounts for nearly 60% of total material cost
- Glass Fiber: Provides structural strength and insulation
Manufacturing Process
- Lamination: Bonding of resin and glass fiber to form substrate
- Etching: Removal of excess copper to create circuit pathways
- Multi-layering: Stacking multiple circuit layers for high-performance applications such as AI systems
Key Features
- High-Purity Substrates: Essential for maintaining signal integrity in high-speed electronics
- Thermal Resistance: Designed to withstand heat from advanced processors
- Scalability: Ranges from simple single-layer boards to complex multi-layer systems
- Reliability: Provides stable connections, reducing risks of short circuits or failures
Applications
- Consumer Electronics: Smartphones, laptops, and computers
- AI Infrastructure: Core component in servers used by cloud providers
- Industrial Systems: Factory automation and machinery
- Semiconductor Integration: Supports chips from companies like Samsung Electronics, SK Hynix, Advanced Micro Devices, and Nvidia
Significance
- Highlights vulnerability of global tech supply chains to geopolitical conflicts
- Demonstrates the interdependence between energy, petrochemicals, and electronics industries
- Indicates a structural shift toward higher costs in advanced technologies, especially AI infrastructure
- Reinforces the need for diversification of raw material sources and supply chain resilience