[Out of Stock] Supply Cut-off of Key PCB Materials Triggers Sharp Price Hikes!

Resin is a key component in the manufacture of printed circuit boards (PCBs), which are widely used in products ranging from smartphones and computers to home appliances and automobiles.

In April of this year, a missile attack by Iran on a petrochemical complex in Jubail, Saudi Arabia, severely disrupted a major global source of resin, leading to a shortage of this critical circuit board material. With shipping through the Strait of Hormuz halted due to the conflict, the affected plants had already suspended production in late March and have yet to resume operations.

Experts warn that if the disruption to resin supplies persists into the autumn, the prices of certain electronic products will rise, placing a financial burden on consumers.

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PCBs serve as the nervous system for all modern devices; when circuit board costs skyrocket, products such as smartphones, laptops, wearables, game consoles, routers, and AI servers are quickly affected. Reports indicate that while U.S. companies accounted for 30% of PCB production in 2000, that figure has now dropped to just 4%, with China having become the world's largest PCB producer. However, regardless of whether PCBs are manufactured in the U.S. or China, the source of the resin remains the same. Shenghong Technology—a Chinese supplier to Nvidia and one of the world's largest PCB manufacturers—has warned that conflict in the Middle East could drive up the prices of key raw materials like copper and resin.

Reports state that PCB prices surged by as much as 40% between March and April. U.S. PCB manufacturer TTM announced that its product prices would rise by 5% to 25%. Usha Haley, a supply chain expert and professor at Wichita State University, noted that a plant in Jubail, Saudi Arabia, supplies approximately 70% of the world's high-purity polyphenylene ether (PPE) resin; "Production has now stalled, and there are no other suppliers to fill the gap. PCB prices rose 40% in a single month, and lead times for epoxy resin raw materials extended from three weeks to 15 weeks."

There are currently no off-the-shelf resin substitutes available, although various industries are exploring alternatives. High-purity polyphenylene ether (PPE) resin is used because it delivers the electrical, thermal, and reliability characteristics required for advanced PCBs—particularly in applications where signal integrity is critical. While substitutes might be suitable for some low-end electronics, any material change for high-end smartphones, RF components, AI servers, and automotive electronics entails a time-consuming process of redesign, testing, and recertification. Engineers might switch to polytetrafluoroethylene (PTFE) or epoxy-based laminates to meet the requirements of low-frequency applications.

However, supply chain experts warn that this resin shortage—compounded by rising memory prices and the impact of tariffs—could push the prices of electronic devices to a ten-year high this autumn. Sridhar Tayur, a professor of operations management at Carnegie Mellon University and a supply chain expert, noted that the U.S. lacks the production capacity to offset the resin shortage and has lost relevant technical talent to other regions. Experts state that if the resin supply disruption persists into the autumn—even for a period of 275 days—the prices of certain electronic products will be affected, and consumers will feel the tangible impact of the price hikes.

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A recent Goldman Sachs report reveals that in April alone, prices for printed circuit boards (PCBs) surged by as much as 40% compared to March. Shares of the U.S. PCB manufacturer Sanmina have risen more than 400% over the past year, and the company has announced price hikes ranging from 5% to 25%. The CEO of SmartTech Research, a U.S. high-tech consultancy, noted that different electronic products vary in their ability to withstand supply chain shocks. In the short term, the pressure is likely to hit low-margin products first—such as mid-range Android phones, electronic accessories, and gaming hardware—as manufacturers of these items struggle to absorb the rising PCB costs due to limited profit margins. Analysts also point out that there are currently no mature market alternatives for the resins in question. While substitute materials might be viable for some low-end electronics, switching materials for high-end smartphones, AI servers, and automotive electronics would necessitate re-certification and re-testing, thereby requiring more time.