IPC International Community magazine an association member publication
Issue link: https://iconnect007.uberflip.com/i/1546209
72 I-CONNECT007 MAGAZINE I AUGUST 2026 management, and cash flow becomes essen- tial. Organisations that have historically relied on extended payment terms or loosely managed working capital may be difficult to sustain. It is reasonable to expect tighter payment terms, reduced credit availability, and growing pressure to unwind vendor-managed inventory arrangements as suppliers seek to protect liquidity and reduce balance sheet risk. Rather than material availability, the first signs of disruption may appear in the amount of cash required to secure future supply. Companies with stronger balance sheets, earlier commitments, and closer supplier relationships are likely to gain a significant advantage. The reallocation of capacity toward higher-growth and higher-value market segments has led to a series of secondary constraints. These effects are often less visible but may ultimately have a broader impact across the PCB supply chain. How Manufacturers Can Allocate Scarce Materials As AI infrastructure drives demand for premium mate- rials, laminate suppliers are directing investment, engineering resources, and production capacity toward higher-margin products. The result is that conventional materials can become more difficult to source even as overall industry capacity expands. Glass Reinforcement Glass manufacturers are accelerating investment in advanced low-CTE and low loss materials such as T-glass and LK Glass, often using manufacturing assets that would otherwise support conventional E-glass production. As a result, the industry is seeing: • No investment in conventional E-glass capac- ity in Japan and Taiwan • Growing dependence on Chinese suppliers for new capacity • Conversion of production resources toward higher-value glass products • Longer lead times for standard glass yarn and fabric constructions • Reduced availability of heavier-weight glass styles used in traditional FR-4 laminates The proportion of glass yarn and fabric available through traditional merchant channels is declining as vertically integrated groups reserve production for internal consumption. This reduces the indus- try's ability to balance supply through open-market transactions and increases its dependence on a smaller number of integrated supply chains. Copper Foil and Resin Systems The same pattern is emerging in copper foil and resin systems. Investment is increasingly focused on VLP/HVLP copper foils and advanced low loss resin systems that support AI, high-speed networking, optical modules, and advanced computing appli- cations. While this expands capacity for premium products, it places pressure on conventional HTE and RTF foils and standard FR-4 systems, which remain essential in PCB manufacturing. The conflict with Iran adds further uncertainty and risk to an already constrained laminate supply chain. Disruption to energy, petrochemical, and logistics markets puts cost pressure on epoxy resin feedstocks, while separate disruption to bromine and TBBPA flame-retardant supply chains risks further inflation in FR-4 production costs. Laminate Manufacturer Prioritisation When glass fabric, copper foil, or resin systems are constrained, manufacturers naturally seek to maximize output, revenue, and contribution from the limited resources available. Historically, short- ages have often resulted in the prioritisation of the highest revenue contribution per unit of constrained raw material consumed. This is particularly relevant in glass fabric short- ages. A fixed quantity of glass fabric can typically generate significantly more square metres of thin laminate or prepreg than thick laminate products. Manufacturers, therefore, have a strong economic incentive to allocate constrained materials toward products that maximize throughput, revenue, and profitability. This allocation behaviour illustrates why current market conditions appear less like a conven- tional cyclical upswing and more like a structural supply chain realignment. Even with new capacity, the demand for AI infrastructure and continued upstream constraints is likely to keep supply- demand imbalances in place for years.