[Hot Topic] Why are semiconductor material prices rising again? Let's find out.

Recently, Japanese semiconductor materials supplier Sumitomo Bakelite announced a price increase for its "epoxy molding compound (EMC) for semiconductor devices."

The price increase covers all grades of Sumitomo Bakelite's EMC for packaging, with increases ranging from 10% to 20%, effective June 1, 2026. Sumitomo Bakelite holds approximately 40% of the global market share in semiconductor EMC, with products covering both traditional and advanced packaging needs, applicable to automotive electronics, industrial modules, and data centers.

Regarding the reason for the price adjustment, Sumitomo Bakelite stated that the recent situation in the Middle East has led to increased procurement costs for raw materials used in its EMC. Furthermore, rising costs for packaging materials, energy, and transportation have further increased the overall product cost. This is not the first time EMC prices have increased. In early April, Kumho Petrochemical of South Korea and Mitsubishi Chemical of Japan issued price increase notices for engineering plastics such as EMC, with increases ranging from a minimum of 5% to a maximum of 20%. Epoxy resin film plastics are thermosetting molding compounds made by compounding epoxy resin as a matrix with curing agents, inorganic fillers, and various additives.

They are widely used in the semiconductor packaging field to protect chips from external environmental influences and provide electrical insulation and heat dissipation. The price surge in epoxy resin molding compounds ultimately stems from supply disruptions to raw materials such as resin. According to Nikkei, the closure of the Strait of Hormuz has led to severe supply shortages of methanol, xylene, and related solvents, with prices rising by at least 40% since March. These solvents are essential raw materials for the production of various specialty resins.

The rising prices of resins and their raw materials are impacting all aspects of the semiconductor and PCB industry chain: an executive at a chip substrate supplier stated that Mitsubishi Gas Chemical has already raised the prices of some products by 20% in the first quarter of this year. He added that given the overall rising material costs, CCL prices are expected to rise further.

Huafu Securities points out that electronic resin, as the core substrate of copper-clad laminates, is crucial in determining the signal transmission efficiency and reliability of the board. Its industry chain extends from upstream resin synthesis through prepreg processing to downstream PCB conduction. Against the backdrop of explosive growth in AI computing power, computing chips are demanding signal transmission speeds exceeding 224Gbps, forcing PCB materials to leap from traditional FR-4 to M8, M9, and even higher-level high-frequency, high-speed copper-clad laminates. The core driving force lies in the iterative upgrades of resin systems.

Affected by escalating geopolitical conflicts in the Middle East and disruptions to shipping through the Strait of Hormuz, costs across the petrochemical industry chain have risen across the board, leading to significant increases in the prices of various commodities. The upstream suppliers of core CCL materials such as epoxy resin and PPO resin are also largely petrochemical companies. With raw material costs continuing to rise, price increases are expected to intensify.

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