The Rise of AI: How It Could Complicate Your Future iPhone Upgrade

Apple’s CEO Tim Cook has established a highly efficient supply chain that is the envy of the technology industry. However, even Apple is facing a new challenge due to a surge in demand for a critical component from a single supplier driven by artificial intelligence (AI).

Despite overcoming the challenges of the COVID-19 pandemic and trade tariffs, the AI boom is pushing Apple’s supply chain to its limits. The sole supplier of high-quality glass cloth used in printed circuit boards (PCBs), Nitto Boseki (Nittobo), is struggling to meet the increasing demand. While efforts are being made to ramp up production, new lines won’t be operational until late 2027, leaving Apple in a critical position in the meantime.

Apple has been relatively unaffected by supply issues as it continues to expand its lineup of Apple silicon systems-on-a-chip. However, the rise of AI has led to increased competition for high-performance PCBs among tech giants like Google and Nvidia, all reliant on Nittobo’s glass cloth. This has created a risk of supply shortages for Apple and other firms like Qualcomm for the first time.

Industry insiders have labeled this situation as “one of the biggest bottlenecks for the electronics and AI industry in 2026.” While Apple is exploring options with other manufacturers for alternative materials, it may not be sufficient to address the shortage at Nittobo.

Furthermore, Apple is grappling with escalating PCB development costs and rising tooling expenses due to the complex nature of AI server boards. This could potentially lead to empty shelves for consumers looking to purchase Apple products in 2026.

Manufacturers are actively seeking improved processes and alternative suppliers to alleviate the bottleneck. However, the race is on to secure the necessary components to maintain production schedules.

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