Surge in AI Demand Causes Supply Chain Bottleneck of Important iPhone Components

JAKARTA - The increasing need for the artificial intelligence (AI) industry has the potential to cause supply constraints on the next generation of iPhones, even though Apple is known to have one of the most efficient supply chains in the world.

Apple's supply chain advantage, which is one of the main achievements of Apple CEO Tim Cook, has proven to be able to survive major disruptions such as the COVID-19 pandemic and the impact of trade tariffs. However, a number of components that meet Apple's quality standards are still difficult to obtain, especially due to dependence on a single supplier.

According to a Nikkei Asia report, the only supplier of high-quality glass cloth used in printed circuit boards or printed circuit boards (PCB), namely the Japanese company Nitto Boseki, is facing a surge in demand that can no longer be handled sustainably. Although the company plans to increase production capacity, the move will only take effect at the end of 2027, so there is no short-term solution available.

A number of industry players quoted in the report called this condition "one of the biggest obstacles for the electronics and AI industry by 2026".

Manufacturers are now beginning to explore other supplier alternatives, including the use of lower quality glass cloth. However, this solution is considered not yet able to replace the quality standards provided by Nitto Boseki.

For the past decade, Apple's development of Apple Silicon has been relatively free of major obstacles because the company is one of the largest buyers in the sector, while demand from other parties is still limited. This situation changed drastically as the demand for high-quality components for AI skyrocketed.

Now, high-quality PCBs are in such high demand that Apple has to compete fiercely with other technology companies. Nvidia, Google, and a number of other major companies are said to have representatives in Japan who, like Apple, are trying hard to secure supplies.

The condition is exacerbated by the increasing cost of production and supply constraints at almost all stages of PCB manufacturing. One example is the increasing thickness of the circuit board, which causes the drill bit to wear out faster so that it must be replaced more often.

Qualcomm is also reportedly feeling similar pressure due to high demand and limited supply. If Qualcomm and Apple fail to obtain crucial components for iPhones, Macs, iPads, and other devices, consumers could face product stock limitations until 2026.

However, the industry is not just waiting for new capacity to be available. Efforts to develop better production techniques, the emergence of more specialized suppliers, and alternative solutions are expected to diversify the supply chain and relieve these obstacles.

The exact impact of this limitation on Apple's product launch in 2026 is still unclear. However, if consumers find it more difficult to obtain iPhones than usual, at least one cause can be highlighted: glass fabric supply constraints.