The ongoing tensions in West Asia are beginning to add another layer of pressure on the global electronics industry, which is already dealing with rising component costs and supply chain uncertainties. According to a Reuters report, Iran’s strike on Saudi Arabia’s Jubail petrochemical complex in early April has disrupted the global supply of high-purity polyphenylene ether (PPE) resin, a key material used in manufacturing printed circuit boards (PCBs).
The attack forced a halt in production at facilities operated by Saudi Basic Industries Corporation (SABIC), which accounts for nearly 70 per cent of global high-purity PPE supply.
The situation has been compounded by disruptions in shipping across the Gulf, further tightening global availability of the material. While the immediate impact is being felt in the petrochemical sector, the ripple effects are expected to extend into industries such as electronics and smartphones, where PCBs form a core component.
“Typically, PCB (bare board) contributes 5-15 per cent of the total cost of electronic devices. I am not sure how much the resin contributes. But yes, it could hamper supplies,” said Mohammad Faisal Ali Kawoosa, Chief Analyst at Techarc.
West Asia conflict adds pressure to an already strained cost structure
The disruption in West Asia is landing at a time when the electronics and smartphone industry is already under significant cost pressure, particularly from memory shortage.
Over the past few quarters, memory prices have risen sharply, driven largely by demand from AI infrastructure and data centres. According to Counterpoint Research, memory prices increased by 50–55 per cent quarter-on-quarter in early 2026, with expectations of further increases in the following quarter.
This surge is being fuelled by hyperscalers and enterprise demand for high-performance computing, which is absorbing a significant portion of the available memory supply. As a result, smartphone makers are competing for constrained resources in a market where supply is already tight.
At the same time, Omdia notes that the broader semiconductor market is seeing strong growth in revenues, largely because of rising average selling prices rather than increased shipment volumes. This is a key distinction, as it suggests that the industry is already passing on higher costs rather than expanding output.
Against this backdrop, the disruption in PCB materials introduces a second layer of cost pressure, one that originates earlier in the supply chain.
Why PCBs matter more than they seem
While memory often dominates headlines, PCBs sit at the foundation of every electronic device. They connect and support all key components — from processors and memory to power systems.
The disruption caused by the strike is not limited to a single material. Alongside PPE resin shortages, manufacturers are also dealing with rising costs of copper foil and other inputs, which together influence PCB pricing.
According to the Reuters report, PCB prices have already risen by up to 40 per cent in April, driven by both material shortages and strong demand from AI infrastructure.
Impact on India
For India, the immediate impact may be more muted compared to global supply chains, but not insignificant.
Kawoosa points out that PCB manufacturing in India is largely handled by major original equipment manufacturers (OEMs) and large electronics manufacturing services (EMS) players.
“In India you have mostly this being the domain of major OEMs having their own factory or large EMS players who manufacture for others. Considering their stature in the industry, I feel their suppliers will try their level best to ensure supplies, of course prices might go up for them too,” he said.
This suggests that while supply disruptions may be managed through supplier relationships, cost pressures are likely to remain.
Will consumers feel the impact?
The extent to which these pressures translate into higher prices for consumers remains uncertain.
According to Kawoosa, even if costs rise, the impact may not be as pronounced as what the industry has seen with memory.
“Hopefully, it will not be a significant increase that handset makers will have to pass on to consumers. Even if it does, it won’t be like that of memory,” he said.
However, he also adds an important perspective on how these costs ultimately play out.
“In the end, the consumer could pay more, and they are not bothered about whether they are paying more because of memory cost or PPE resin. That’s for B2B circles to keep an eye on.”
A supply chain under pressure from both ends
What is emerging is not a single bottleneck, but a set of pressures building across different layers of the electronics supply chain. Memory costs are rising as demand from AI and data centres absorbs available supply. At the same time, disruptions in key materials used in PCBs are beginning to tighten the base of the manufacturing stack.
For smartphone makers, this isn’t a single constraint that can be worked around. It is a combination of factors, emerging from different parts of the ecosystem, that are starting to overlap.
