Iran war raises circuit board costs for tech firms

The conflict in the Middle East is disrupting supplies of key raw materials used to make printed circuit boards, driving up costs for electronics manufacturers worldwide.

Printed circuit boards, or PCBs, are essential components found in nearly all electronic devices, including smartphones, computers, data centers and AI servers. The latest disruption adds pressure to a tech sector already dealing with rising memory chip prices and broader supply chain challenges.

Industry sources said the situation worsened after Iran struck Saudi Arabia’s Jubail petrochemical complex in early April, forcing a shutdown in production of high-purity polyphenylene ether resin, a critical material used in PCB laminates.

Saudi chemical giant SABIC, which supplies around 70 percent of the world’s high-purity PPE resin, has reportedly not resumed normal production, sharply tightening global availability. Shipping disruptions in and out of the Gulf region have added to supply concerns.

PCB prices had already been rising since late last year because of growing demand for AI servers. Since March, manufacturers have accelerated purchases of materials in an effort to secure supply and limit the impact of higher prices.

Analysts said PCB prices jumped by as much as 40 percent in April compared with March. Major cloud service providers are reportedly willing to absorb further increases as they expect demand to remain strong in coming years.

The global PCB market is forecast to grow 12.5 percent to $95.8 billion in 2026, according to industry estimates.

South Korean PCB maker Daeduck Electronics has started talks with customers about possible price increases. A company executive said waiting times for chemical materials such as epoxy resin have stretched from three weeks to 15 weeks.

Other key materials, including glass fiber and copper foil, are also in short supply. Sources said copper foil prices have risen by as much as 30 percent this year, with gains accelerating in March.

Copper makes up around 60 percent of total raw material costs in PCB production, according to Chinese supplier Victory Giant Technology, which serves customers including Nvidia.

The company recently warned that the Middle East conflict could continue pushing up prices for major inputs such as resin and copper, adding further cost pressure across the global electronics industry.