A global shortage of printed circuit boards (PCBs) is driving up prices for electronics manufacturers. Rising material costs and supply chain strain from conflict in West Asia and AI demand are impacting production pipelines, placing focus on India's efforts to increase domestic component manufacturing.
The global electronics industry is currently facing a supply crunch for printed circuit boards (PCBs), the essential foundations for most electronic devices. This shortage is driven by two main factors: high demand for advanced artificial intelligence hardware and ongoing geopolitical instability in West Asia, which has disrupted the flow of specialty chemicals required for board production.
Material Costs and Supply Chain Challenges
Supply chain issues along critical global shipping routes have compounded the problem. According to comments from Syrma SGS Technology, the conflict has specifically impacted the availability of a specialty chemical previously dominated by Saudi Arabian supply. This, alongside higher prices for basic inputs, is creating significant pressure on profit margins across the sector. Over the past year, the price of low-bromine epoxy resin has climbed by approximately 70%, while copper foil and electrolytic copper costs have jumped by more than 30%. These rising inputs have already forced global PCB suppliers to increase their prices by over 20%.
India’s Localization Strategy
This supply volatility arrives as India accelerates its plans to become a global electronics manufacturing hub. Under the Electronics Components Manufacturing Scheme, companies have committed over ₹15,000 crore to boost domestic capacity. Syrma SGS Technology is among those expanding, with plans for a new PCB facility currently in the pipeline. However, trial production for this unit is not expected until early 2027, with full commercial capacity anticipated by the 2028-29 financial year.
Structural Reliance on Imports
While domestic capacity is growing, the industry remains heavily dependent on imported raw materials. Data from the Electronics Industries Association of India (ELCINA) indicates that local manufacturers still rely on imports for essential items like photoresists, with local capacity for other critical processing chemicals currently limited to between 20% and 40%. While firms like Wipro and Syrma SGS are working to set up local manufacturing for Copper Clad Laminates, the absolute need for imported photoresists remains a structural hurdle.
For investors, the key monitorable remains the speed of execution for these manufacturing projects. As companies move to lower their import dependency, the ability to manage rising raw material costs without fully passing them on to customers will define short-term profitability. Tracking the commissioning timelines of these new facilities and the success of domestic raw material localization will be essential to understanding when Indian manufacturers can reduce their exposure to global supply chain shocks.