Raw materials for manufacturing printed circuit boards turned out to be scarce due to military actions in the Middle East

Short news version

In 2024 the shortage of components for electronics manufacturing became a result of two interrelated factors: a sharp rise in demand for AI equipment and military actions in the Middle East, which disrupted supplies of key materials.

1. Why the shortage arose
Factor What happened How it affects
AI boom Demand for servers for artificial intelligence grew, which drove up prices for printed circuit boards (PCB). Rising costs and accelerated depletion of inventories.
Military action Iran attacked an oil‑chemistry complex in Saudi Arabia; SABIC halted production of polyphenyl ether resin used to make PCBs. Raw material supplies fell to 30 % of global demand, leading to component shortages and price increases.

2. Market consequences
* Price rise – in April the cost of printed circuit boards rose by 40 %.

* Revenue growth forecasts – PCB manufacturers are expected to see revenues increase to $95.8 million per year (12.5 % growth).

* Negotiations with customers – South Korean manufacturer Daeduck Electronics has begun discussing price increases.

3. Shortage of other materials
Material | Condition | Impact on cost of goods sold
Polyphenyl ether resin (SABIC) | Supply halted | Key PCB component
Fiberglass | Shortage | Used in multilayer boards
Copper foil | Prices up 30 % since the beginning of the year, shortage | Makes up ~60 % of board cost

*Example*: a basic multilayer board costs $204 per m²; for AI servers the price can reach a tenfold increase.

4. Conclusion
The combination of technological demand and geopolitical upheaval has led to a significant shortage of key materials, driving up prices for printed circuit boards and increasing the cost of electronics production worldwide.