The ongoing conflict involving Iran has significantly disrupted the global electronics supply chain, particularly impacting the production and pricing of printed circuit boards (PCBs), a critical component in nearly all electronic devices including smartphones, laptops, cars, and AI servers [1]. Following an Iranian strike on Saudi Arabia’s Jubail petrochemical complex in early April, production of a key resin used in PCBs was halted, tightening global supply and causing shipping delays due to disrupted Gulf shipping routes [1].
As a result, prices for circuit boards surged by as much as 40% in April, according to Goldman Sachs, while copper foil—another major PCB input—has climbed as much as 30% this year [1]. Lead times for some chemicals essential to PCB manufacturing have extended from three weeks to as long as 15 weeks, further exacerbating supply chain pressures [1]. Ben Bajarin, CEO of Creative Strategies, noted that the cost increases are not limited to PCBs but also affect memory, storage, and wafers, raising the overall bill of materials for electronic devices [1].
Manufacturers are attempting to mitigate these cost increases by negotiating supply contracts and absorbing some expenses, but experts warn that these measures will only go so far [1]. According to Galen Zeng, a semiconductor supply chain analyst at IDC, consumers will not see immediate price hikes, but these are expected to materialize within the next few months [1]. Dan Ives of Wedbush Securities anticipates that the impact will become more visible later in the year, particularly during the summer and fall, which coincide with major retail periods such as back-to-school and early holiday shopping [1].
Data from the Institute for Supply Management indicates that companies typically pass at least part of these cost increases on to customers, even if they absorb some impact through reduced margins, according to ISM Manufacturing PMI Chair Susan Spence [1]. While some analysts believe companies will absorb costs in the short term, others caution that these price increases could persist for several years [1].
CONCLUSION
The Iran conflict has caused a sharp rise in electronics supply chain costs, with significant increases in PCB and copper foil prices. While manufacturers are initially absorbing some of these costs, consumers are likely to face higher prices for electronics in the coming months, especially during key retail periods. The market impact is expected to be high, with potential for lasting effects on device pricing.