AI demand strains PCB supply chains

A surge in demand for semiconductor components, primarily driven by the artificial intelligence (AI) industry, is causing significant strain on the supply chain for printed circuit boards (PCBs) and related materials. Reports from Nikkei Asia and other industry sources indicate that a Taiwanese PC manufacturer is paying at least 12 times more for copper-clad laminates (CCL) than in July 2025.

PCB lead times double in some cases

Lead times for PCBs have increased significantly, with some orders requiring up to 30 months, double the time compared to a year ago. One of the world's largest suppliers of laminates reportedly has a backlog of orders extending until 2030, despite plans to triple its capacity by 2028.

AI servers prioritize specialized components

AI servers are prioritized due to their higher complexity and revenue potential, requiring more specialized materials and longer production times. The FC-BGA substrate, a small plate used to mount chips on motherboards, and HDI PCBs, used in both smartphones and servers, are among the most strained components.

Nvidia secures key suppliers for AI chips

Nvidia has signed supply agreements for substrates with Ibiden, Samsung Electro-Mechanics, and Unimicron, which may affect the availability of these components for other products. Taiwanese suppliers of PCB materials, Elite Material and Co-Tech, warned Digitimes about a severe shortage caused by AI in October 2025.

Material costs rise sharply

TrendForce noted in December 2025 that gold and laminates account for nearly half the cost of materials for a PCB, with Samsung Electro-Mechanics and LG Innotek paying 10 to 15 percent more for their laminates than a year earlier. Since July 2025, the increase in prices has become more pronounced.

Investments rise to meet demand

Elite Material reported a 142 percent year-on-year revenue increase in the third quarter of 2026, reaching a record level. Japanese and Korean manufacturers are increasing investments to meet the growing demand. Murata, the world's leading manufacturer of MLCCs, raised its investment budget for the fiscal year from April 2026 to March 2027 from 255 to 270 billion yen, citing AI demand as a key driver.

New plants will take years to operate

Ibiden's new plant will not start production before 2029, meaning AI server orders will continue to take precedence. The cost of a laminate is just one component of the overall PCB cost, which also includes drilling, copper plating, testing, and assembly. A 12 times increase in laminate costs will not result in a 12 times increase in the cost of a motherboard.

Smartphone market declines

On the smartphone side, the market is facing a decline, with global shipments falling by 20 percent in a quarter, the lowest since 2013. Executives at HP and Dell have expressed concerns about the availability of PCBs for their 2027 product lines.