AI Is Driving Work Back to the UK
The AI boom is pulling China’s PCB capacity towards complex server boards, and that is pushing low- and medium-volume electronics work back to the UK and Europe.
The complex multilayer boards inside AI servers are now made almost entirely in China. Europe has lost much of the capability to build them, and the number of large PCB factories here keeps falling. The knock-on effect is less obvious. Longer lead times, shipping costs, duties and political risk are making UK manufacturing look attractive again for products that were written off as “too cheap to make here”.
These may be crumbs compared with the AI boom. But those crumbs are worth millions of pounds to UK manufacturers.
China no longer needs us
For the first time, China does not need the UK, Europe or America to keep its PCB industry busy. Its own AI build-out, electric vehicles and domestic market can absorb everything it makes.
The boards in AI servers are a different product from those in a laptop or a smart meter. They run to 18 layers and beyond, use premium low-loss materials, and need factories most of Europe no longer has. As large PCB plants here close or consolidate, China has become the driving force behind building those boards.
That is a risk as well as a shift. If laminate and board supply tightens further, countries without their own capacity are left asking who will supply them at all.
The money shows where the capacity is going. Taiwan’s AI server rack builders Quanta and Wistron reported August 2026 revenue up 177% and 166% on a year earlier (DIGITIMES, shown at ICT). The world PCB market is forecast to pass US$100bn for the first time this year.
The materials squeeze
This is the first time we have seen shortages hit not just the chips, but the FR-4 board we put them on.
Component shortages are familiar. Memory prices have jumped as chipmakers switch capacity to AI, and some STM32 microcontrollers have been quoted at lead times of up to a year. What is new is that the laminate itself, the copper, glass cloth and resin a board is built from, is now scarce and rising fast. Glass cloth has risen by as much as 165% this year, and FR-4 laminate has more than doubled in price.
| Material | 2026 movement | Source |
|---|---|---|
| Electronic glass cloth (1080, 2116, 7628) | Up 118–165% so far this year | Citi, via 36Kr |
| FR-4 copper clad laminate (Kingboard) | Up 100%+ this year (7 price rises) | 36Kr |
| Standard multilayer laminate (Panasonic, Nan Ya) | Up 20–30% from September | 36Kr, SMM |
| Memory (Supplyframe price index) | 146% higher, Q2 2025 to Q2 2026 | Findchips |
| STM32 microcontrollers | Lead times up to 52 weeks | Viperatech |
Figures shown at the Institute of Circuit Technology (ICT) conference in October 2026 tell the same story. On a price index where January 2025 = 100, the main glass cloth styles had reached roughly 330 to 460 by October 2026, while resin and copper foil had roughly doubled. All six materials tracked hit their highest level that month.
It has become a sellers’ market, a phrase the ICT’s chairman used at the same event, calling these the industry’s “golden years”. The same square metre of laminate can go into a highly profitable 18-layer AI board or a simple two-layer board. Laminate makers and fabs will naturally favour the board that earns more per square metre. Standard boards are left waiting, and paying more.
The crumbs are worth millions
Work the UK was once told it could not compete for is coming back: consumer, industrial and commercial electronics.
Defence and medical have always been a staple for UK PCBA houses, because of IP and security. What has changed is consumer electronics. Customers who started dual sourcing after Covid now want more than a second supplier. They want fast design iterations, adaptive sourcing, and the ability to change a board at short notice.
There is plenty of room to grow. In 2024, consumer electronics made up just 2.3% of Europe’s PCB market, against 36.2% for industrial electronics and 21.3% for military and aerospace (WECC data, shown at ICT).
At S29 we have even seen customers move PCB assembly from mainland Europe back to the UK, citing longer shipping times, duties and delays.
Just-in-time is no longer enough
We were all taught that just-in-time saves money on stock. Today’s supply cycles say otherwise.
With delays, shortages and geopolitical shocks now routine, companies need to hold sensible stock so they can keep selling without interruption. Designing in flexibility matters just as much: approved alternative parts, product ranges that can adapt, and a manufacturer close enough to react quickly. S29 supports this with stock holding, next-day call-offs and flexible supply.
How S29 stays adaptive
S29 came through Covid, and is coming through the AI boom, by being adaptive with customers and dealing with risk early.
We look at component risk and lead times at the start of a project, not when the order is due. With electronics and embedded software engineers in-house, we can:
- update a PCBA design quickly when a part becomes unavailable
- switch to an alternative chip and adapt the firmware to suit
- build short batches fast, then scale to thousands of boards across our two SMT lines
As UK contract manufacturers face consolidation and acquisitions, that combination of design, firmware and production under one roof is what keeps products on the shelf.
If your supply chain is feeling the squeeze, talk to S29 about bringing your PCB assembly back to the UK.
Sources
- Severe supply shortage drives pre-emptive rally across the sector, 36Kr, 15 September 2026
- Nan Ya raises copper clad laminate prices by 20%, SMM, 14 August 2026
- 2026 DRAM memory shortage FAQ, Findchips
- Semiconductor supply is tightening again in 2026, Viperatech, 28 March 2026
- Custer Consulting Group and Ventec International Group, presentation at the Institute of Circuit Technology conference, October 2026 (market size from CCG; European market mix from WECC; Taiwan revenue from DIGITIMES AI Server Tracker)
