Vendors are shifting capacity from traditional PCB materials to advanced dielectrics. They should be increasing both.

I have some good news, and some bad news. (Spoiler alert: This should be a wake-up call to all companies that produce materials and supplies that go into printed circuit boards.)

First the good news. During the PCEA PCB Management Forum at PCB East in May, industry leaders shared long-awaited optimism about the printed circuit industry in North America, Europe and globally. Much of the discussion focused on how AI will impact manufacturing, particularly the massive increase in demand for advanced PCBs required to support the growing number of AI servers and data centers.

What kind of volumes are we talking about? If a single AI data center requires 100,000 GPUs, and those GPUs require roughly 12,500 AI servers, with each server using about 15 advanced PCBs, one data center alone could consume more than 175,000 circuit boards, not including supporting electronics used to manage the facility. With projections calling for 400,000 to 600,000 AI data centers globally over the next five years, demand for advanced PCBs could reach between 8 million and 12 million boards, creating a significant impact across the global supply chain.

But that’s not the only demand driver. Ongoing military support efforts tied to Ukraine and recent Middle East conflicts have significantly reduced existing weapons stockpiles, and those systems will eventually need to be replenished. Missiles, drones, aircraft and ground-based defense systems all rely heavily on printed circuit boards, meaning future replenishment orders could create another major surge in PCB demand.

Globally, AI data centers are expected to drive a dramatic increase in PCB demand, not only in Asia but also across North America and Europe. At the same time, Western defense spending is rising as the US works to replenish depleted munitions stockpiles and Europe expands its own defense reserves to reduce reliance on the US. Together, these trends are creating what could become a perfect storm for the PCB industry. But beyond industry discussion, independent analysts are now projecting the same trajectory.

In late 2025, before the latest developments in the Middle East, Goldman Sachs released a report examining the impact of AI data centers on the PCB and copper-clad laminate (CCL) industries. According to the report, AI server demand is expected to grow from roughly $3 billion in 2024 to $27 billion by 2027. Goldman Sachs also projected that CCL demand could rise by 140% to 200% during that same period. After years of uncertainty, the industry finally appears positioned for significant growth across Asia, North America and Europe.

Now comes the bigger question: Is the supply chain prepared?

While demand for both advanced and traditional PCBs is climbing rapidly, the supply base is tightening. Glass fiber, a key material used in laminate production, is already facing shortages. The same is true for CCL, where the existing supply is struggling to meet current demand. Conditions are even tighter in North America and Europe, where domestic production capacity remains limited. Compounding the issue, many suppliers are shifting capacity away from traditional materials and toward advanced low-Dk and ultra-thin glass products designed for next-generation applications. Similar changes are occurring in CCL manufacturing, where lower-copper-weight materials are increasingly replacing more traditional offerings.

The challenge is that traditional materials remain critically important across large segments of the electronics industry. Rather than expanding capacity for both advanced and legacy technologies, much of the investment is simply being redirected from one category to another.

Ventec recently announced plans to build a laminate facility in the United States, a move that could help strengthen regional supply. New capacity may not come online quickly enough to meet the accelerated demand forecasts tied to AI infrastructure growth through 2027, however.

Although much of the AI data center buildout is expected to occur in Asia, North America and Europe will still require substantial secure infrastructure to support sensitive controlled unclassified information (CUI) and intellectual property. At the same time, ongoing supply shortages are already extending lead times for laminate and other PCB materials while increasing costs across the supply chain.

The broader message for suppliers is clear: Global demand is returning, and the industry needs more capacity – not less. This is not the time to shut down facilities or walk away from legacy materials that remain essential to large segments of the electronics manufacturing industry. Supply chain challenges remain, but they also highlight the value of strengthening regional production capabilities. The coming years could represent one of the strongest periods the PCB industry has seen in decades, provided the supply base is prepared to support it.

Peter Bigelow has more than 30 years’ experience as a PCB executive, most recently as president of FTG Circuits Haverhill; peterbigelow@msn.com.