Iran war disrupts the circuit board supply chain, raises costs for tech firms

The conflict in the Middle East has severely disrupted supplies of printed circuit boards (PCBs), a foundational component used in virtually all electronic d...

What Happened

The conflict in the Middle East has severely disrupted supplies of printed circuit boards (PCBs), a foundational component used in virtually all electronic devices including smartphones, computers, and AI servers.
Iran struck Saudi Arabia's Jubail petrochemical complex in early April 2026, halting production of high-purity polyphenylene ether (PPE) resin — a critical base material used to manufacture PCB laminates.
SABIC, headquartered in the Jubail complex, supplies approximately 70% of the world's high-purity PPE, and has been unable to resume output since the strike.
PCB prices surged as much as 40% in April alone compared to March, with copper foil prices rising up to 30% year-to-date, adding to pressure from an already ongoing US-China tariff war.
The Strait of Hormuz remains closed due to overlapping military blockades; even if reopened, supply chain normalisation is estimated to take four to six months.

Static Topic Bridges

The Strait of Hormuz as a Global Maritime Chokepoint

The Strait of Hormuz is a narrow waterway located between Iran and Oman, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is the world's most critical oil transit chokepoint. In 2024, an average of 20 million barrels per day (b/d) of oil flowed through the strait — approximately 20% of global petroleum liquids consumption and more than one-quarter of all global seaborne oil trade. Around one-fifth of global liquefied natural gas (LNG) trade also transited the strait, primarily from Qatar.

The strait is approximately 167 km long and narrows to as little as 39 km at its narrowest point.
Only Saudi Arabia and the UAE have pipelines that can bypass the strait (Saudi Aramco's East-West crude pipeline at up to 7 million b/d, and the UAE's 1.5 million b/d Fujairah pipeline).
Disruption even for a short period creates substantial supply delays and spikes global energy and commodity prices.
The UNCTAD has highlighted that Hormuz disruptions have cascading implications for global trade and development beyond energy.

Connection to this news: The closure of the Strait of Hormuz has cut off critical raw material and electronics component supply routes, amplifying the impact of the direct strike on SABIC's facility and creating a multi-front supply shock for global electronics manufacturers.

Global Electronics Supply Chains and PCBs

Printed Circuit Boards (PCBs) are the backbone of modern electronics, providing the platform on which electronic components are assembled and interconnected. PCB manufacturing is highly dependent on specialised chemical inputs — including epoxy resin, glass fibre, copper foil, and high-purity PPE resin — many of which are sourced from a concentrated set of global suppliers. A disruption to any one of these inputs can cascade across the entire electronics value chain.

The global PCB industry was projected to reach $95.8 billion in 2026 — an increase of 12.5%.
The average waiting time for chemical materials such as epoxy resin stretched from 3 weeks to 15 weeks following the Iran war disruptions.
The disruption compounds existing strain from the US-China tariff war, which had already pushed memory chip costs sharply higher.
AI server manufacturing is particularly exposed because high-performance computing hardware relies on advanced PCB laminates made from materials like PPE resin.

Connection to this news: The attack on SABIC's Jubail facility directly choked the global supply of a material for which there are few substitutes, instantly translating into a significant and sustained price shock across the electronics industry.

Supply Chain Concentration Risk

Modern global supply chains are characterised by deep specialisation and concentration — a small number of suppliers often dominate critical input markets. This "single point of failure" structure creates systemic vulnerability to geopolitical disruptions, natural disasters, or targeted attacks. Economists refer to this as supply chain concentration risk or input market fragility.

SABIC alone accounts for approximately 70% of global high-purity PPE supply — a classic example of dangerous concentration.
The US-China trade war had already prompted diversification efforts (the "China+1" strategy), but raw material concentration remains an unresolved vulnerability.
Multilateral bodies such as WTO and G20 have increasingly focused on supply chain resilience as a strategic economic priority.
India's semiconductor mission (India Semiconductor Mission, launched 2021) and PLI schemes for electronics aim to reduce such concentration vulnerabilities for India.

Connection to this news: The Iran war has exposed the depth of concentration risk in PCB raw material supply, reinforcing the case for supply chain diversification and strategic stockpiling policies globally.

Key Facts & Data

PCB prices surged up to 40% in April 2026 compared to March 2026 (Goldman Sachs analysts).
Copper foil prices rose up to 30% year-to-date in 2026.
SABIC supplies approximately 70% of global high-purity PPE resin, a critical PCB laminate input.
Average wait time for epoxy resin: from 3 weeks to 15 weeks post-disruption.
The Strait of Hormuz carries approximately 20 million barrels/day of oil — about 20% of global petroleum liquids consumption.
The global PCB market was projected at $95.8 billion in 2026.
Supply chain normalisation estimated at 4–6 months even after the strait reopens.