Americans shopping for smartphones, laptops or even home appliances may soon start feeling the effects of the Iran conflict – not just at the gas pump, but at the checkout screen.
A disruption to an essential component in electronics – printed circuit boards (PCBs) – is driving up costs across the tech industry, increasing the likelihood that consumers will face higher prices and fewer deals in the months ahead.
Prices for circuit boards have already surged, jumping as much as 40% in April alone, according to Goldman Sachs. At the same time, other key inputs like copper foil – one of the largest cost components in PCBs – have climbed as much as 30% this year.
The ongoing war with Iran has disrupted supplies of key raw materials used to produce PCBs, which function as the “nervous system” inside nearly every electronic device, from smartphones and computers to cars and AI servers.
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At the center of the disruption is an Iranian strike on Saudi Arabia’s Jubail petrochemical complex in early April, which halted production of a critical resin used in circuit boards and tightened global supply, according to analysts. Shipping routes in and out of the Gulf have also been disrupted, compounding delays and shortages.
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Manufacturers are now scrambling to secure materials, with lead times for some chemicals stretching from just three weeks to as long as 15 weeks, according to industry sources. The pressure is cascading through the broader tech supply chain.
“It is not just PCBs,” said Ben Bajarin, CEO of Creative Strategies. “Memory, storage and wafer costs are all increasing the bill of materials for devices.”
Companies are trying to offset those increases by negotiating supply contracts and absorbing some of the costs – but only to a point.
Experts say shoppers won’t see price hikes immediately, but they are coming.
“For the average consumer shopping at Best Buy or Amazon, the pass-through won’t happen overnight,” said Galen Zeng, a semiconductor supply chain analyst at IDC. “But expect it to materialize within the next few months.”
Dan Ives, an analyst at Wedbush Securities, said the impact will likely become more visible later this year.
“There will be a lag and much of these costs will be absorbed in the supply chain,” Ives said. “Summer and Fall timeframe could see prices rise.”
That timing could coincide with key retail periods, including back-to-school shopping and the early holiday buying season, when demand for electronics typically accelerates.
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Data from the Institute for Supply Management suggests companies typically pass through at least part of cost increases to customers, even if they absorb some of the impact through margins, according to ISM Manufacturing PMI Chair Susan Spence.
While some analysts believe companies will absorb costs in the short term, others warn the price increases could stick.
“This is a structural, multi-year upcycle driven by AI demand – not a temporary spike,” Zeng said. “The cost floor for advanced electronics is shifting upward.”
Demand for AI infrastructure is already competing with consumer electronics for limited supply of key components, squeezing availability and driving up prices across the board. Even before the Middle East conflict, PCB demand had been rising rapidly due to AI server growth, further tightening supply.
Beyond higher prices, consumers may also face limited availability of certain devices.
“As supplies are redirected toward AI and high-performance computing, consumer electronics manufacturers are left competing for a shrinking pool,” Zeng said.
The result could be delays or “out of stock” issues for some products, especially if supply disruptions persist.
Ives said shortages are not guaranteed but remain a risk.
“If it stays at the current rate, we can see shortages into the Fall on certain products,” he said.
Historically, supply chain shocks don’t translate one-to-one into retail price increases, but they rarely disappear entirely.
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That suggests consumers are unlikely to escape the impact altogether.
The disruption may start deep in the global supply chain, but its effects are likely to show up in familiar places: higher price tags, fewer discounts and tighter inventory for everyday tech products.
And with demand for electronics continuing to surge, relief may not come quickly.
Reuters contributed to this report.
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