AI has already increased the cost of RAM and SSDs, driving up prices for most consumer electronics, including smartphones, laptops, gaming consoles, and PCs. Instead of getting a reprieve, consumers might see another price hike, thanks to the conflict in the Middle East.
As reported by Reuters, the ongoing Iran war has disrupted supplies of a critical raw material used in printed circuit boards (PCBs), the backbone of almost every electronic device you own, from your iPhone to AI servers.
The trouble started in early April when Iran struck Saudi Arabia’s Jubail petrochemical complex, halting production of high-purity PPE resin, a key ingredient used in the manufacture of PCB laminates.
SABIC, which produces around 70% of the world’s supply of this material and operates out of the Jubail complex, has been unable to resume production.
Why should you care about a circuit board shortage?
PCB prices were already climbing before all of this, driven by insatiable demand for AI. But things really accelerated in March as manufacturers scrambled to lock in supplies.
In April alone, PCB prices surged as much as 40% compared to March, according to Goldman Sachs analysts. It’s not just the PPE resin shortage driving prices up. Glass fiber and copper foil are also in short supply.
Copper foil prices have jumped as much as 30% this year, and that matters because copper accounts for around 60% of raw material costs in PCB manufacturing.
Who is already feeling the heat?
South Korean PCB maker Daeduck Electronics, which supplies Samsung, SK Hynix, and AMD, has already started conversations with customers about price increases. The company’s senior executive told Reuters that wait times for chemical materials like epoxy resin have ballooned from three weeks to fifteen weeks.
So not only is the price rising, but you might also see delays in new product launches or out-of-stock products listed at your favorite retailer. And with costs rising this fast, most of that bill is almost certainly coming your way.