GoKawiilReuters reported today that the effects of the war in Iran and the broader Middle East conflict have significantly disrupted the supply chain for printed circuit boards (PCBs), a fundamental component in most electrical devices. This disruption will put even more strain on the already-taut electronics manufacturing industry and inevitably lead to higher prices for consumers on phones, laptops, consoles, and other gadgets.
We reported last week that electronics manufacturers were willing to pay a nearly-premium price for chips that would normally be discarded as junk, indicating an industry with a supply chain on the verge of imploding. The industry is also battling with soaring chip costs and outright scarcity.
In yet another blow to the broader industry, Iran hit the Jubail petrochemical complex in Saudi Arabia on 7th April, bringing the production of high-purity polypropylene ether (PPE) resin, a critical base material for manufacturing PCB laminate, to a complete stop.
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Reuters reports that SABIC (Saudi Basic Industries Corporation), which operates in the Jubail complex and accounts for approximately 70% of the global high-purity PPE supply, has been unable to resume production and supply since the event.
The impact of this strike was almost immediate, as is the reality of supply chains, and has rapidly flowed down to all industries downstream of the facility, leading to severe shortages of the critical material.
This is not the first time the war in Iran has impacted the global electronic supply chain. Earlier this week, the South China Morning Post reported that major Japanese suppliers of photoresist — a key chip-making chemical — had begun informing customers, such as Samsung and SK Hynix, of disruptions in raw-material procurement. The suppliers cited the scarcity of naphtha, a raw material for making the photoresist, stemming from the conflict, as they rely on the Middle East for more than 40% of their supply.
(Image credit: Getty / Bloomberg)
Attacks on facilities are just one part of the problem. The closure of the Straight of Hormuz, a critical global shipping route, as well as disruptions to the supply and prices of crude oil from Iran, are further exacerbating an already fragile global scenario.
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