New Delhi: The West Asia conflict and a surge in AI server demand have caused a shortage of printed circuit boards, a key hardware platform, which in turn has triggered a price rise in the electronics industry.
This crunch in printed circuit boards (PCB) — a hardware platform on which components are fixed in electronic products — stems from rising material costs, supply chain disruptions in key shipping routes, and component diversion toward high-end artificial intelligence hardware.
The shortage of PCBs comes at a critical juncture for Indian industry as several major investments amounting to over Rs 15,000 crore are in the pipeline under the Electronics Components Manufacturing Scheme (ECMS) amid rising domestic demand.
A senior official of electronics manufacturing services firm Syrma SGS told PTI that the recent strike of Iran on facilities in Saudi Arabia has triggered a shortage of some of the chemicals that are used for making PCBs.
“The current quarter and the subsequent quarter will continue to see pressure on material costs. PCBs have all of a sudden gone in short supply because some facility in Saudi Arabia has been hit by Iran. They were controlling 80 per cent of the supply of a specialty chemical which goes into the making of a PCB,” Syrma SGS Technology Managing Director Jasbir Singh Gujral said.
Syrma SGS is one of the applicants under the government’s electronics component manufacturing scheme. The company has received approval for production of PCBs as well, but it is still a few quarters away from commercial production.
Gujral said the civil construction of the company’s proposed PCB plant is 70 per cent complete, and balance 30 per cent will be completed by this month end.
“… Trial production should be January to March. Once my trial production is out, then I do the sampling for my customers. I’ll start using something for myself in-house. Commercial production will start in FY 2027-28. Full production in FY 2028-29,” he said.
Electronic components makers body ELCINA said that main raw materials used in PCB manufacturing on which import dependence is high include Copper Clad Laminate Chemicals.
“Wipro and SGS Syrma are setting up the first manufacturing plants for CCL. Similarly, in case of Photoresists there is 100 per cent import dependence and requires urgent localisation efforts,” ELCINA Secretary General Rajoo Goel said.
He said plating Chemicals (Cu, Ni, Au), etching Chemicals, Surface Finish and cleaning, as well as pre-treatment, there is only 20-40 per cent local capacity, where also expansion in capacity is a necessity.
“Cost of every key raw material rose in the last 8-9 months with no exceptions; specifically low-bromine epoxy resin increased by about 70 per cent, JUSHI 7628 glass cloth doubled in the last 8 months and copper foil and cost of electrolytic copper, which is a critical material, increased by over 30 per cent,” Goel said.
He said prices have been rising sharply from January 2026, triggering a concentrated release of cost pressure across the entire raw materials bill of materials for PCBs.
“A key market trend is the AI-server demand, which is taking up the capacity of PCB supply while demand for power electronics and energy-related products such as smart meters, power management systems, EV systems, etc is growing in high double digits of 30-40 per cent, putting tremendous pressure on prices and global PCB suppliers hiking prices by over 20 per cent,” Goel said.
He said urgent steps are required to manage the situation, which require expediting implementation of CCL manufacturing projects which are underway and ensuring that their capital inputs, equipment and technology transfer are not delayed.
“The key right now as per ELCINA is the implementation of the several Bare PCB manufacturing projects (12-14 units) which have been approved under the ECMS scheme,” Goel said.
