Semiconductor Supply Chain Disrupted by Iran War as PCB Prices Soar 40%

Semiconductor supply chain disruptions deepened as the Iran war pushed PCB prices up 40% in April alone. The Silicon Review reports on the SABIC plant attack, resin shortages, and rising tech costs now threatening AI server production and consumer electronics.

The semiconductor supply chain is facing its most severe disruption since the COVID-19 pandemic, as the Iran war has triggered a cascade of shortages and price spikes in printed circuit boards (PCBs) the backbone of virtually every electronic device. PCBs are used in smartphones, computers, AI servers, automotive electronics, and medical devices, making the disruption widely consequential.

The crisis traces back to early April, when Iran struck Saudi Arabia's Jubail petrochemical complex, forcing a halt in production of high-purity polyphenylene ether (PPE) resin a critical base material for manufacturing PCB laminates. The complex is operated by SABIC, which accounts for approximately 70% of the world's high-purity PPE supply. According to industry sources, SABIC has been unable to resume output; severely tightening global availability, while shipping in and out of the Gulf has also been heavily disrupted by the war.

The impact on pricing has been dramatic. In April alone, PCB prices surged as much as 40% from March, according to Goldman Sachs analysts. Cloud service providers are willing to accept further increases, as they expect demand will outstrip supplies over the coming years, the analysts added. The global PCB industry is projected to increase by 12.5% to reach $95.8 billion in 2026, according to a recent report from Prismark.

The shortage extends beyond PPE resin. Glass fiber and copper foil supplies are also constrained, with copper foil prices surging as much as 30% so far this year and the rally gaining momentum in March. Copper accounts for around 60% of total raw material costs in PCB manufacturing, according to Victory Giant Technology, a major Chinese PCB supplier for Nvidia.

Daeduck Electronics, a South Korean PCB maker whose customers include Samsung Electronics, SK Hynix, and AMD, has begun discussions with customers over price increases. A senior executive told Reuters that his priority has now shifted from meeting customer demand to securing supplier relationships, as waiting times for epoxy resin have stretched to 15 weeks from three weeks previously.

Multi-layer PCBs can now cost around $204 per square meter, while higher-end models for AI servers command roughly $1,970 per square meter, according to Victory Giant. For electronics manufacturers already grappling with soaring memory chip costs, the PCB disruption is a fresh blow that threatens to raise production costs across nearly every product category potentially reaching consumers in the form of higher device prices later this year.

As the semiconductor supply chain buckles under the weight of the Iran war and PCB prices surge 40% in a single month, The Silicon Review examines how a strike on a Saudi petrochemical plant has triggered a cascade of shortages and why cloud providers are accepting higher costs while electronics manufacturers brace for consumer sticker shock.

About the Author

Sashindra Suresh is an experienced writer specializing in artificial intelligence, software development, and emerging technologies. With a strong ability to translate complex technical concepts into clear, engaging insights, she has contributed to a wide range of publications and platforms. Her work focuses on making cutting-edge innovations accessible to both industry professionals and curious readers alike.