NCAB warns PCB supply chain is facing a structural reset

The AI-driven surge in demand for high-layer multilayers, HDI, low-loss materials and high-speed PCBs has pushed factory utilisation to levels the industry has not seen before. The pressure has spread beyond AI-grade production. Factories not directly serving AI programmes are feeling the strain as upstream capacity is fully absorbed. Demand is also climbing for power supplies, thermal management modules and supporting hardware — further diverting resources from standard product lines.

The result is a fundamental shift in factory behaviour. Supply can no longer keep pace with demand, and factories are now actively choosing which technologies, customers and commitments to support — turning away business without concern for revenue loss. Tier 1 factories, flush with AI contracts, are buying up available laser drilling equipment at a pace that has made new laser drills effectively impossible to procure.

The raw material picture compounds the problem at every level. E-glass producers are converting standard capacity to specialty low-loss yarns for AI and high-performance computing, creating shortages of both high-grade and standard materials in parallel. The same dynamic is playing out in copper foil, where manufacturers are prioritising HVLP production, leaving gaps across both HVLP and standard grades. NCAB flags 1080 prepreg as a particularly critical bottleneck – it is the dielectric of choice for impedance control, HDI and high-layer-count builds, precisely the constructions used in AI servers and network switches, and its consumption is rising faster than any other material in the stack.

Two additional vulnerabilities stand out. China imposed a near-total sulfuric acid export ban from 1 May 2026 to secure domestic fertiliser supply, citing disruptions around the Strait of Hormuz that have already tightened global sulfur supply – and PCB production requires consistent, high-purity electronic-grade acid, a more limited subset of total supply. Separately, disruptions at SABIC's Jubail petrochemical complex have created an acute vulnerability in laminate supply. SABIC, a Saudi Arabian chemical company, supplies approximately 70% of the world's high-purity PPE resin – a non-substitutable laminate base material. The disruption creates an immediate availability risk with downstream effects expected within weeks.

In the Supply Chain Outlook, NCAB concludes that annual pricing frameworks and stable lead-time assumptions are no longer viable. Pricing is no longer the primary concern. Supply and allocation are. The company describes the current moment as the tightening phase before the storm.