Inflation in the electronics you buy may soon become a bit more sticky

Anyone with evergreens in their yard probably knows the familiar feeling of putting their hand on the trunk and coming away with a sticky film on their fingers. This sticky stuff is better known as resin. Under the right conditions, tree resin hardens. Humans, like with so many natural substances, realized that resin could be made synthetically with a soup of petrochemicals. Synthetic versions harden even more into a durable, heat-resistant material used in everything from adhesives and coatings to plastics and electronics. Resin is a critical component in the manufacturing of printed circuit boards, which are used in everything from smartphones to computers, appliances, and autos.

When the Jubail petrochemical and industrial complex in Saudi Arabia was struck by Iranian missiles on April 6 and April 7, it was the final blow in a convergence of factors — geopolitical, financial, physical — that knocked out a key world reservoir of resin, leaving the crucial component for circuit boards in short supply. The plants had already shut down at the end of March as it became clear transit through the Strait of Hormuz was untenable during the conflict, and it is still not back online.

There is little public information on the exact status of the Jubail complex today, though Dow CEO Jim Fittering (Dow has a joint venture with Saudi Aramco at Jubail) said on his company’s April 23 earnings call that it continues to guide to a “275 day-plus” process for reopening the Strait of Hormuz and getting supply chains back to normal. The actual repairs needed at the complex seem less critical, based on his comments, than the broader logistics situation. “I think a lot of that is going to be able to be repaired within that time frame. … just talking with our partners, I think they are actively working on repairs, and I don’t hear anything from them that leads me to believe it’s going to extend longer than this duration of this logistics constraint,” Fittering said.

But experts say a resin stoppage extending into the autumn, within that 275-day time frame, would begin to inflict price pain on consumers for some electronics.

According to the April producer price index data, plastic resins and materials were among the contributors driving a 9.4% annual increase in processed goods prices — the steepest rise in over three years.

CNBC was recently taken on a rare tour of a U.S.-based PCB maker TTM’s facilities that highlighted the fragile supply chain that goes into making the computer components. The report noted that back in 2000, 30% of PCBs were manufactured in the U.S. Today, it stands at 4%, with China being the world’s leader in production.

Whether the PCBs are made in the U.S. or China, the resin still comes from the same sources.

Nvidia supplier Victory Giant in China, one of the world’s largest PCB makers, warned that the Middle East conflict could push up prices of key ingredients copper and resin. Printed circuit board (PCB) prices rose by up to 40…