PPE Resin Shortage Halts 70% of Global PCB (Printed Circuit Board) Material Supply After Jubail Strike

The global electronics supply chain is facing one of its most severe raw-material disruptions in years. On April 7, 2026, an Iranian strike hit the Jubail petrochemical complex on Saudi Arabia's Gulf coast, operated by Saudi Basic Industries Corporation (SABIC). The attack forced a complete production halt of high-purity polyphenylene ether (PPE) resin, a critical base material used to make printed circuit board (PCB) laminates. SABIC accounts for roughly 70% of the world's high-purity PPE supply, and with no other producer operating at comparable scale, the loss created a global shortage within days.

PPE resin is prized for its electrical performance under heat stress and is essential for high-frequency and high-reliability boards used in AI servers, 5G infrastructure, high-speed networking equipment, and automotive radar. It is blended with epoxy to produce the low-loss substrates that advanced electronics depend on. When the Jubail complex stopped producing, the gap exposed how concentrated supply of this single input had become.

More than two months after the strike, SABIC has still not resumed output. The shutdown has rippled straight down the value chain. Laminate makers reduced production or moved onto allocation, PCB fabricators faced longer material queues, and downstream assembly partners began receiving boards late and at higher cost. By the end of April, PCB prices had climbed as much as 40% from March levels, according to a Goldman Sachs note widely cited across the industry. Epoxy resin lead times stretched from about three weeks to fifteen weeks. Copper foil prices rose around 30% over the year, with Mitsubishi announcing a 30% increase and Mitsui a 12% increase effective April 2026, adding a second layer of cost pressure on top of the resin gap.

The disruption was made worse by the broader Middle East conflict. Since the U.S. and Israeli strikes on Iran in late February 2026, parts of the Strait of Hormuz have been effectively closed, severely slowing shipping in and out of the Gulf. That shipping bottleneck compounded the raw-material shortage, since even available inventory struggled to reach buyers. The same conflict has hit helium and naphtha supply, both feedstocks for semiconductor and photoresist production, layering further strain onto an electronics sector already coping with high demand for AI servers.

The market response has been sharp. Daeduck Electronics, a South Korean PCB maker whose customers include Samsung, SK Hynix, and AMD, opened price discussions with clients, and one executive said the priority had shifted from meeting customers to securing suppliers. Cloud and AI server operators have largely chosen to absorb the higher PCB costs rather than cut orders, betting that server demand will keep outstripping supply. As a result, cost pressure is flowing directly into AI infrastructure budgets rather than slowing the buildout.

Demand was already pushing prices up before the strike. PCB prices had been rising since late 2025 on the back of AI server growth, and the resin shortage turned a tight market into an acute one. Industry tracker NCAB described a seller's market and projected the shortage will not be fully resolved before the third quarter of 2026.

As of early June 2026, the situation remains unresolved. SABIC's Jubail PPE line is still offline, and substitution options are limited. Total PPE capacity worldwide is large, but high-purity electronic-grade PPE is a much narrower niche. Producers such as Asahi Kasei, Mitsubishi Gas Chemical, and Mitsubishi Engineering Plastics, along with a Bluestar and Evonik partnership, are credible alternative sources, but none can quickly fill a 70% gap. Exposed laminate lines include Panasonic Megtron grades, Rogers RO4350B and related products, and Isola high-speed materials, all of which rely on an epoxy and PPE matrix.

The practical consequence is broad. Because PPE-based laminates sit inside almost every advanced electronic device, the shortage touches smartphones, laptops, networking gear, and AI servers alike. If the supply gap extends into autumn as some analysts warn, end consumers could face higher prices on a wide range of electronic products. For now, hardware teams are managing longer lead times, allocation, and elevated costs as ongoing market conditions rather than a temporary blip.