In the first quarter of 2026 the world is yet again in a volatile place, we review the impact of global instability and its effect on the global electronics supply chain, along with the impact of PCB assembly.
The Middle East conflict and aftermath, continues to threaten the ongoing availability and cost of key materials used in semiconductor manufacturing and electronics production, along with significant impact to shipping and air freight costs.
Firstly, the disruption in Helium supply, following damage to the Qatar’s LNG facilities, with repairs likely to take 3-5 years and cause further long-term helium shortages. Qatar’s LNG facilities are essential to helium recovery, Helium is critical to chip manufacturing, primarily for temperature regulation and lithography processes, and shortages in Helium is likely to cause delays in semiconductor production, with slowdowns in wafer processing, etching and cooling steps.
The Middle East Conflict also causes disruption to the PCB assembly market in indirect measures, such as through disruption of shipping routes. With Iran blocking ships from leaving the Strait of Hormuz, the price of oil related products, including kerosene (jet fuel), has dramatically increased. This has resulted in rising energy costs, as well as increases in air and sea freight prices, with fuel surcharges being implemented in many markets. Even when the Strait is re-opened, Iran may be taking control and implementing hefty tolls, which will not help to bring down the freight costs.
Beyond helium, multiple chipmaking materials come from the Middle East, including Bromine, another critical chemical required in the manufacture of semiconductor chips. The price of Bromine has skyrocketed as the supplies have faced production disruptions caused by the geopolitical situation.
Overall, the geopolitical situation in the Middle East greatly impacts the electronics supply chain with:
· Increased transit times
· Increased shipping costs
· Increased manufacturing costs across the whole manufacturing chain, from raw components to PCBA’s.
For PCB assemblies this results in longer lead times and higher chip prices, especially for advanced products.
At Diamond Electronics our dedicated purchasing team have multi-year experience of the electronics industry and are best placed to navigate the current turbulent market. Contact us today and find out how we can help you take the stress out of your supply chain.