18 August 2026
Material and market situation
Artificial intelligence (AI), storage technologies, data centres and the global energy transition are currently driving a fundamental transformation in the printed circuit board industry – particularly with regard to the availability of base materials. Current developments should not be regarded as short-term market disruptions, but rather as a fundamental structural shift in global base material supply chains. According to numerous market participants, this situation is expected to continue for the foreseeable future. Companies are therefore required to adapt their procurement strategies, as well as their planning and decision-making processes, to the new market conditions.
Fixed pricing arrangements, whether agreed for the medium or long term, are increasingly becoming a thing of the past. Today’s market requires a high degree of flexibility. Quotations and material availability can change within a very short period of time. This requires a change in mindset and a willingness to make decisions on a different basis than before. Quantity and price are no longer the primary considerations; instead, the focus is on material availability and, consequently, the ability to maintain reliable deliveries. Today, the principle is: new enquiry – new price.
In particular, base materials for standard FR4 applications (Rigid, ML2 and ML4) are becoming increasingly scarce. Manufacturers are reducing their production capacities because these materials generate comparatively low margins. At the same time, demand from PCB manufacturers significantly exceeds available production volumes, resulting in material allocations. By contrast, considerably higher margins can be achieved with high-frequency materials, HDI applications and other high-end technologies. As a result, glass fabric and base material manufacturers are increasingly investing in finer glass fabrics and materials for more sophisticated PCB technologies.
Enormous investments are currently being made worldwide in the expansion of AI infrastructure and data centres. Major technology corporations are securing access to the required raw materials and base materials through long-term partnerships, advance financing and capital commitments.
Until production capacities for standard FR4 and rigid materials are expanded again, the market is expected to experience a prolonged period of restricted availability. During this time, we will have to manage carefully with the material allocations available to us.
During our stay in China, the pressure on the market was clearly noticeable. In some cases, quotations there lose their validity after just three to five days. This is due to the enormous demand from the Chinese PCB industry, which serves global demand for printed circuit boards. At the same time, glass fabric manufacturers are increasingly focusing on higher-margin products for more demanding applications.
Many glass fabric and base material manufacturers are therefore showing diminishing interest in standard rigid and FR4 materials. At the same time, an exceptional amount of new production capacity for high-quality PCBs is being created in China. This development is further supported by the Chinese government’s industrial policy.
More sophisticated PCBs require finer inner layers, finer glass fabrics and state-of-the-art manufacturing technologies. This means investment in more advanced equipment, automated optical inspection systems (AOI), HDI technologies and comprehensive process monitoring.
Such investments are essential for high-quality multilayer PCBs, whereas the investment requirements for conventional double-sided PCBs or simple multilayer PCBs are considerably lower. Investment in these technologies in China is currently exceptionally high.
Europe will also increasingly feel the effects of material shortages. However, PCBs manufactured in China are particularly affected, as this is where material demand is highest. Kingboard has been setting the direction of base material price developments for several months and is increasing its prices at short intervals. Shengyi is following this trend. The established base material brands familiar in Europe are predominantly used for high-quality PCB applications, while Chinese manufacturers such as GoWorld are continuously expanding their market position in China for standard rigid and FR4 materials.
Base material manufacturers are able to achieve higher prices in the European market than in the Chinese market. There is therefore hope that the limited material volumes will continue to be made available to Europe on a preferential basis, albeit subject to significant allocation restrictions. Whether this expectation will be met remains to be seen over the coming months.
In some cases, Kingboard recalculates its selling prices only on the day of delivery. Any price differences arising between the order date and the delivery date must be covered by the customer; otherwise, no delivery will take place. Against this background, traditional framework agreements and long-term pricing arrangements are losing their effectiveness. Today, our suppliers confirm neither long-term prices nor long-term material availability. The financial risk would simply be too high for all parties involved. We must therefore learn to manage rapid market changes and respond flexibly to new conditions.
Quotations should therefore be regarded as short‑term price indications and not as long‑term price guarantees.
We now only enter into framework arrangements based on production releases where quantities are taken over short, tightly defined periods. This applies both to our production in Kenzingen and to traded goods.
For orders from South‑East Asia, we only issue order confirmations once our suppliers have provided binding confirmation of both price and delivery date. Many customers will already have noticed that this process now takes considerably longer than it did just a few weeks ago.
Should fixed pricing over a longer period and larger stocks of traded goods in Kenzingen be required, the necessary capital investment will need to be agreed individually. Given the current market situation, long‑term material supply arrangements can in future only be implemented through jointly agreed financing or risk‑sharing models based on a partnership approach.
If you have any questions and/or suggestions, please do not hesitate to contact us.
Nicole Storz, Managing Director