Prices for smartphones and PCs have received yet another reason to increase.

      The cost of your gadgets is set to rise, and the ongoing conflict in the Middle East is a contributing factor.

      AI advancements have already caused increases in the prices of RAM and SSDs, leading to higher costs for many consumer electronics, such as smartphones, laptops, gaming consoles, and PCs. Instead of a break in pricing, consumers may soon face another increase, attributed to the conflict in the Middle East.

      According to a report by Reuters, the war with Iran has disrupted the supply of a vital raw material used in printed circuit boards (PCBs), which are essential to nearly every electronic device, from iPhones to AI servers.

      The issue began in early April when Iran attacked Saudi Arabia’s Jubail petrochemical complex, halting the production of high-purity PPE resin, an essential component in PCB laminates.

      SABIC, responsible for producing approximately 70% of this material and operating from the Jubail complex, has not been able to restart its production.

      Why is a shortage of circuit boards a concern?

      PCB prices were already on the rise due to the overwhelming demand for AI, but the trend intensified in March as manufacturers raced to secure supplies.

      In April alone, PCB prices soared by as much as 40% compared to March, as reported by Goldman Sachs analysts. The price hikes are not solely due to the PPE resin shortage; supplies of glass fiber and copper foil are also limited.

      Copper foil prices have increased by as much as 30% this year, which is significant because copper constitutes around 60% of the raw material costs in PCB manufacturing.

      Who is already experiencing the impact?

      Daeduck Electronics, a South Korean PCB manufacturer supplying Samsung, SK Hynix, and AMD, has begun discussions with customers about raising prices. A senior executive from the company informed Reuters that lead times for chemical materials like epoxy resin have increased from three weeks to fifteen weeks.

      This means not only are prices rising, but you may also encounter delays in new product launches or products being out of stock at your preferred retailer. With costs escalating so rapidly, it is likely that a significant portion of these expenses will be passed on to consumers.

      Rachit is an experienced tech journalist with over seven years of experience reporting on the consumer technology market.

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