Another shortage is looming due to the Iran war: polyphenylene ether (PPE) for the production of circuit boards and partly chip carriers could become scarce in the coming months. Saudi Basic Industries Corporation (SABIC) is said to have stopped deliveries after a missile attack by Iran in early April.
This is reported by the news agency Reuters based on sources close to the business. SABIC itself writes in its latest quarterly report from April 29th only about “escalating supply disruption from the Middle East conflict” affecting several plastics.
SABIC does not confirm a delivery stop but does not deny it either. Videos of attacks on the Saudi region of Al-Jubail and its petrochemical industry have been shared on social media.
Raw material prices are already rising
Delivery figures for PPE are scarce. According to Reuters, however, SABIC accounts for around 70 percent of global supplies. According to a Goldman Sachs analysis, prices for the resin have already risen by 40 percent in April.
Among other things, PPE is heat-resistant up to more than 100 degrees Celsius, electrically insulating, and absorbs hardly any moisture. This makes the resin suitable for insulating layers, especially in printed circuit boards (PCBs). All electronic devices today require PCBs, so a shortage of raw materials could potentially increase prices.
The glass fabric from Nittobo and the Ajinomoto Build-up Film (ABF) for chip carriers already showed that essential components in semiconductor production depend on individual companies. It is often not worth it for other companies to enter the market due to normally low margins.
The stock market is already reacting to the current developments: the share of the South Korean PPE supplier Kolon Industries has risen by 30 percent in April alone and by over 130 percent since the beginning of the year.
Effects linger
In a statement to heise online, the German Electrical and Digital Industry Association (ZVEI) writes that it has not yet received any reports of bottlenecks in plastics such as PPE. This could simply be due to the outsourcing of production to Asia -- the production of PCBs is no longer profitable in Germany. It will likely take months for a raw material shortage at the beginning of the supply chain to have an impact in Germany.
(mma)
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This article was originally published in German. It was translated with technical assistance and editorially reviewed before publication.