Smartphone and PC prices have received yet another incentive for a price increase.
Your devices are about to see a price increase, with a conflict in the Middle East contributing to this trend.
AI advancements have already pushed up the costs of RAM and SSDs, consequently raising prices for most consumer electronics such as smartphones, laptops, gaming consoles, and PCs. Instead of experiencing a break, consumers may face further price increases due to the situation in the Middle East.
According to a Reuters report, the ongoing war involving Iran has disrupted the supply of a crucial raw material needed for printed circuit boards (PCBs), which form the foundation of nearly every electronic device you own, from iPhones to AI servers.
The issues began in early April when Iran attacked Saudi Arabia’s Jubail petrochemical facility, which halted the production of high-purity PPE resin, an essential component in PCB laminate manufacturing.
SABIC, responsible for around 70% of the global supply of this material and operating out of Jubail, has not been able to restart production.
Why is a circuit board shortage significant?
PCB prices were already on the rise prior to this disruption due to the relentless demand from AI. However, the situation escalated in March as manufacturers rushed to secure supplies.
In April, PCB prices reportedly rose up to 40% compared to March figures, according to analysts from Goldman Sachs. The increase in prices is not solely due to the PPE resin scarcity; shortages of glass fiber and copper foil contribute as well.
Copper foil costs have surged by up to 30% this year, which is critical since copper comprises around 60% of the raw material expenses in PCB production.
Who is already feeling the impact?
Daeduck Electronics, a South Korean PCB manufacturer supplying companies like Samsung, SK Hynix, and AMD, has begun discussions with clients regarding price hikes. A senior official from the company mentioned to Reuters that the wait times for chemical materials, such as epoxy resin, have expanded from three weeks to fifteen weeks.
This not only means rising costs but could also lead to delays in product releases or out-of-stock items at your preferred retailer. With prices increasing so swiftly, consumers are likely to bear the burden of these extra costs.
Rachit is an experienced tech journalist with more than seven years of experience covering the consumer technology sector.
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Prices for smartphones and PCs have received yet another reason to increase.
The Iran conflict has interrupted the supply of a crucial raw material for circuit boards, causing prices to jump by 40% in April alone and putting pressure on electronics manufacturers who are already contending with increasing chip prices.
Smartphone and PC prices have received yet another incentive for a price increase.
The war in Iran has impacted a crucial raw material utilized in circuit boards, causing prices to spike by 40% in April alone and putting pressure on electronics manufacturers who are already facing increasing chip prices.