What rising raw material prices mean for electronics
Rising prices for key commodities used in electronics and manufacturing are filtering down to everything from copper-heavy printed circuit boards (PCBs) to metal-backed passives, driven by upstream pressures
On the London Metal Exchange (LME), copper pushed above $13,300 per tonne in early January 2026, more than 20% above the late 2025 average, as stock tightness and strong industrial demand combined.
This is significant as copper is used extensively in printed circuit boards, internal connectors and wiring, and across various power and signal paths in electronics. As a result, movements in copper pricing directly influence the price of the boards and assemblies that engineers design and build.
Gold has also recently risen above $5,000 per ounce, hitting a series of records in the first few weeks of 2026 amid market volatility and safe-haven demand. Gold is not used in every bill of materials, but it is used in contact plating and specialist components where performance and reliability meet.
Similarly, aluminium has traded above $3,000 per tonne on global benchmarks and is expected to remain well supported due to current market dynamics. Even when commodity analysts suggest prices could ease later in the year, the near-term story is volatility, which introduces risk.
When inputs move
Engineers regularly purchase copper foil, laminates, and boards priced based on copper’s movement. Over 2025 and into 2026, manufacturers of copper-clad laminate, the base material for almost all FR-4 boards, began issuing public price adjustments linked to rising raw material costs.
Some supplier notices describe a rise of up to 30% across all thicknesses of copper-clad laminate and prepreg, driven by higher copper prices, glass cloth costs and processing expenses.
This is the kind of upstream movement that does not stay upstream but filters through every layer of a PCB quotation, especially in multi-layer designs where copper and prepreg content are higher.
The wider passive component landscape reflects a similar story, with industry analysis revealing price increases across capacitors, inductors, ferrite beads and related passives. These range from single-digit to double-digit percentages for early 2026 deliveries, often citing metals and process cost inflation among the drivers.
This does not mean a ‘panic-buy’ mentality should be adopted, but it does mean the old ‘wait-and-see’ strategy is increasing in risk, particularly for engineers dependent on a single branded source for key sections in their design.
Alternative sourcing
Second sourcing is gaining interest as both a cost-cutting exercise and a risk-management tool. Pin-for-pin alternatives, for example, can enable engineering teams to maintain electrical and mechanical compatibility while reducing dependence on individual manufacturers, whose pricing or lead times could be more exposed to raw material volatility.
This approach is effective for widely used regulators, discretes, interface devices and passives, where functional equivalence is understood, and validation cycles are manageable. As volatility increases, having approved alternatives already mapped can reduce disruption when prices shift or allocations appear.
When suppliers combine local stock with extended inventory and effective cross-reference tools, response times improve. During a time of uncertain input costs, that flexibility is as valuable as unit price, provided performance stays consistent.
Prices might ease at some point, but it is hard to predict when. Volatility is not going away, and when raw material costs feed into electronics pricing, it is the teams that design and source with flexibility in mind that are better positioned to respond when conditions change.
Contributed by Chris Withers, sales director at Zel Components, an alternative electronic parts supplier.
