NEWS: The ongoing conflict in West Asia has disrupted the supply of critical raw materials, leading to a rise in prices of Printed Circuit Boards (PCBs).

ABOUT

• PCBs are essential components used in almost all electronic devices, including smartphones, computers and AI servers.
• This disruption highlights the global interconnectedness of supply chains and their vulnerability to geopolitical conflicts.

Printed Circuit Boards (PCBs)

• PCB (Printed Circuit Board)à base that connects and supports electronic components in devices.
• It is a core component of the electronics industry, without which electronic devices cannot function.
• PCBs à widely used in consumer electronics, industrial machines, automobiles and defence systems.

Role of West Asia in PCB Supply Chain

• West Asia à Major supplier of petrochemical productsà essential raw materials for PCB manufacturing.
• A key material is Phenylene Oxide (PPE) resin, used in making PCB laminates.
• Saudi Arabia’s petrochemical complex contributes nearly 70% of global PPE supply, making it highly critical.

Impact of the Conflict

Disruption of Raw Material Supply

• The conflict has halted operations in key petrochemical plants, leading to a shortage of PPE resin.
• This has significantly reduced the availability of essential inputs for PCB production.

Shipping and Logistics Disruptions

• The Gulf region is a major global shipping route, and conflict has disrupted maritime transport.
• This has increased delivery time and transportation costs.

Rise in Prices

• PCB prices surged by up to 40% in April, reflecting supply shortages.
• Additional shortages of materials like glass fiber and copper foil have also contributed to price rise

Broader Implications

• The crisis demonstrates the fragility of global supply chains dependent on specific regions.
• Similar disruptions were seen during COVID-19 pandemic and Russia-Ukraine war.
• It underlines the need for diversification and resilience in supply chains.

Implications for India

• India depends heavily on imports for electronics components and raw materials.
• Rising PCB prices can affect: Electronics manufacturing sector, Digital economy growth

This creates an opportunity to promote:

• Domestic manufacturing (Atmanirbhar Bharat)
• Production Linked Incentive (PLI) schemes
• Semiconductor ecosystem development

Key Data & Facts

• PCB price increase: up to 40%
• PPE supply from Saudi Arabia: ~70% globally
• Delivery delay: 3 weeks → 15 weeks
• Global PCB market projected to reach $95.8 billion by 2026