AI Infrastructure Boom Strains PCB Materials Supply Chain

Rapid investment in artificial intelligence and high-performance computing is straining the printed circuit board supply chain, pushing upstream suppliers to plan capacity expansions through 2029–2030. For lighting manufacturers, the report raises questions about future materials availability and procurement costs, likely impacting LED, driver, and control boards.

Demand for higher-layer-count, denser PCBs using higher-performance materials is creating shortages across copper-clad laminates (CCL), copper foil, glass fabrics, drill bits and production equipment. Expansion planning horizons have stretched from one or two years to three or four, requiring suppliers to commit investment substantially earlier.

Shortages Could Persist Through 2028

There are serious bottlenecks affecting both PCBs and semiconductor substrates. Low-coefficient-of-thermal-expansion glass fabric, CCL and Ajinomoto build-up film (ABF) substrate materials have already experienced tight supply for one to two years.

Equipment availability is another constraint. Lead times have increased substantially for more than 80% of equipment products, while another 20% have seen delivery times double. Certain machines now require as long as 30 months for delivery. Some industry experts project an approximately 20% shortfall in key materials during 2027.

Experts also see no meaningful easing of upstream shortages through at least 2027–2028. Tight supply is also giving materials manufacturers opportunities to increase prices and improve profitability.

Panasonic recently announced price increases reaching 200%, a move effectively signaling its withdrawal from the low- and mid-range CCL materials market.

Expansion Shifts Orders and Supplier Opportunities

China and Taiwan are leading the investment wave, while Japanese and South Korean suppliers remain comparatively cautious. Their inability to expand quickly enough is diverting some orders to second-tier suppliers.

Meanwhile, expansion in Southeast Asia, including Thailand, has progressed less smoothly than anticipated because of incomplete local supply chains and other challenges.

AI Spending Creates an Uneven Capacity Race

Experts attribute the pressure to accelerating computing demand and cloud service providers’ efforts to build infrastructure ahead of requirements. He expects major providers to sustain capital expenditure growth through 2028, with spending potentially reaching six to 6.8 times 2024 levels.

That investment is driving rapid expansion in CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging. By comparison, substrate, memory and advanced wafer capacity is expected to grow approximately 20%, although their larger existing production bases partly explain the difference.

For the lighting industry, the central takeaway is procurement visibility rather than a confirmed lighting-specific shortage. It is not yet established whether specialized lighting laminates face the same constraints as AI supply chain materials. Nevertheless, suppliers’ pricing decisions, changing market priorities and lengthy equipment deliveries warrant attention when discussing availability with PCB partners. Experts argue that accurate end-customer forecasts and transparent investment plans are essential to synchronize expansion and avoid either excessive factory construction or inadequate capacity.

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Image above courtesy of Pixabay.com.

David Shiller

David Shiller is the Publisher of LightNOW, and Senior Business Development Consultant at Capacity Consulting, a North American consulting firm providing business development services to advanced lighting manufacturers. The ALA awarded David the Pillar of the Industry Award. David has been co-chair of the ALA’s Engineering Committee since 2010. David established MaxLite’s OEM component sales into a multi-million dollar division. He invented GU24 lamps while leading ENERGY STAR lighting programs for the US EPA. David has been published in leading lighting publications, including LD+A, enLIGHTenment Magazine, LEDs Magazine, and more.

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