70% PPE (Polyphenylene Ether) resin supply cut; PCBPCB prices surge 40% in a single month

On June 8, CCTV Finance reported that the impact of the geopolitical conflict in the Middle East is spreading deeply from the energy market to the electronic industry chain. The shutdown of the core production area for global high-end electronic-grade PPE (polyphenylene ether) resin has caused a severe supply shortage, directly driving a significant price increase in printed circuit boards (PCBs) and intensifying the risk of price hikes for end-user electronic products.

Core Production Area Shutdown; Global High-End PPE Resin Supply Severed

PPE resin is a high-performance engineering plastic. Its upstream production relies mainly on basic chemical raw materials such as phenol and methanol, undergoing complex processes like polymerization and modification; its downstream core application is in the manufacturing of high-end copper-clad laminates (CCL), which are then used in PCB production. It is a core base material for high-frequency, high-speed PCBs in electronic products such as AI servers, high-speed switches, 5G base stations, and high-end smartphones. It possesses characteristics such as low dielectric loss, high-temperature resistance, and stable signal transmission, with no low-cost substitute materials available in the short term.

Global high-end electronic-grade PPE resin production capacity is highly concentrated. SABIC's Jubail Industrial City factory accounts for approximately 70% of the world's electronic-grade PPE resin capacity, and its products are the designated raw materials for high-end PCBs by companies like NVIDIA and Intel.

Affected by the escalation of the Middle East conflict and the obstruction of shipping in the Strait of Hormuz, the factory has been fully shut down since the end of March 2026, and there is no clear timetable for resuming production yet. Industry institutions predict that the supply disruption will last at least until the end of the third quarter. The remaining approximately 30% of capacity is held by companies such as Japan's Asahi Kasei, whose capacity has reached saturation and cannot quickly fill the gap.

Domestic Enterprises Accelerate Breakthroughs; Achievements in Both Capacity and Certification

China's PPE resin industry is divided into two major sectors: general-grade and electronic-grade. The production capacity of general-grade PPE resin is relatively large; Sinochem International's subsidiary Nantong Xingchen possesses a PPE raw powder capacity of 50,000 tons/year, making it the domestic leader in the general-grade sector; enterprises like Xinbao New Materials also possess capacities of several ten thousand tons, but these are mainly used for low-end fields.

The technical barrier for electronic-grade PPE resin is extremely high. It requires meeting stringent standards such as purity not less than 99.5% and dielectric loss controlled to the ten-thousandth level, and it requires passing multi-level downstream certifications, a cycle lasting 1-2 years. Currently, only a few domestic enterprises have achieved breakthroughs:

Shengquan Group: The only enterprise in China achieving mass production of electronic-grade PPE resin, with a domestic market share of about 70%. Existing capacity is 1,500 tons/year, and new capacity of 2,000 tons/year is expected to commence production in Q4 2026. Products cover the full series of high-end grades M6-M9, having passed certifications by NVIDIA, Huawei, and Intel, and supplying to leading CCL enterprises such as Shengyi Technology and Nan Ya Plastics.

Dongcai Technology: Electronic-grade PPE resin capacity of 3,750 tons/year, with 5,000 tons/year under construction (pilot plant in mid-2026). M8/M9 grade products have passed testing, and the company is bound to major Taiwanese-funded CCL manufacturers. It is the only enterprise in China and one of only three in the world to have passed NVIDIA's M9 full-chain certification.

Silver Age Technology, Hongchang Electronic and other enterprises also possess small-batch electronic-grade PPE resin production capabilities and are gradually entering the mid-range PCB base material supply chain.

Price Surge Transmits to End Products; Inflationary Pressure Continues to Intensify

The supply shortage directly triggered a price explosion for PPE resin. SABIC has raised the price of PPE resin monomers from 650,000 RMB/ton to 1,000,000 RMB/ton, an increase of over 50%; domestic electronic-grade PPE resin prices have followed suit, with a cumulative increase of over 30% since 2026.

Inflationary pressure is rapidly transmitting downstream. CCL enterprises were the first to raise prices, with the ex-factory prices of high-end CCLs from leading enterprises like Shengyi Technology rising by 15%-25% month-on-month. A Goldman Sachs report shows that global PCB prices in April 2026 rose by up to 40% compared to March, setting a record for the highest single-month increase in nearly a decade. The stock price of US PCB manufacturer Xindar Technology has risen by over 400% in the past year, reflecting strong market expectations regarding supply and demand tensions in the industry chain.

Industry experts warn that if the PPE resin supply disruption continues into the autumn of this year, end-user electronic products such as mobile phones, laptops, routers, and AI servers will face comprehensive price increases, and consumers will directly bear the pressure of rising costs. Meanwhile, the global supply-demand gap also presents a golden opportunity for domestic substitution for Chinese PPE resin enterprises. Orders for leading enterprises have been scheduled through 2027, with capacity fully produced and sold, positioning them to continue benefiting from the simultaneous rise in volume and price.