appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Daniel Ren

Chinese smart vehicle makers have been hit by another setback as a global components shortage collides with surging prices of raw materials, driven by the artificial intelligence boom.
It would take at least a year for the global supply chain to ramp up production of printed circuit boards (PCBs) and multilayer ceramic capacitors (MLCCs) – two key parts that make vehicles intelligent – to meet rising demand, according to industry officials and analysts.
“The components, though small, play a key role in the automotive industry’s effort to make millions of cars more autonomous and smarter,” Chen Jinzhu, CEO of the consultancy Shanghai Mingliang Auto Service, told the South China Morning Post on Wednesday.
“Market demand for electric vehicles [EVs] is falling, but component supply remains a thorny issue for leading players since they focus on intelligence to make their cars attractive to consumers.”
Industry officials said the global auto sector was facing a 20 to 30 per cent shortage of components, with prices more than tripling over the past year.
Carmakers’ cost pressure mainly comes from memory chips. But a lack of PCBs and MLCCs disrupts production and prevents assemblies from running smoothly
Dai Yong, Geely Auto
The crunch stems from explosive AI growth and the rapid buildout of AI data centres worldwide.
PCBs are widely used along with graphics processing units and application-specific integrated circuits to support AI applications. They are also needed to make mobile phones, digital devices and cars.
Data from the India Printed Circuit Association showed that PCB prices had surged more than threefold over the past 12 months to about 330 yuan (US$49) per sheet.
MLCCs, dubbed the “rice of the electronics industry”, are tiny electronic components that regulate and stabilise electrical currents in devices ranging from smartphones and EVs to AI servers and data centres.
Prices of some MLCC components increased from 10 yuan per 1,000 units to 40 yuan in early 2026 amid a severe shortage caused by surging demand from AI servers and data centres, according to traders.
Dai Yong, chief financial officer of Geely Auto, mainland China’s second-largest carmaker, said in an interview on Monday that the price jumps in the two components had a minimal impact on earnings because the parts remained a small slice of the total expenses.
“Carmakers’ cost pressure mainly comes from memory chips,” he said. “But a lack of PCBs and MLCCs disrupts production and prevents assemblies from running smoothly.”
Dai added that memory chips for data buffering, processing and storage – essential to autonomous driving – had been squeezing carmakers’ profit margins since early 2026.
Market know-how can effectively help us plan ahead
Lily Cai, Ecarx
Carmakers and automotive supply chain vendors were forced to scramble for chips at lofty prices as the rapid rise of AI generated massive orders.
Memory chips used in the AI industry were more sophisticated and expensive, generating higher added value for manufacturers, who would typically allocate more products to hi-tech clients, rather than EV makers and car component producers, Qian Kang, an owner of a vehicle circuit board factory in eastern China’s Zhejiang province, told the SCMP on Wednesday.
To secure enough parts, carmakers are paying steep premiums for everything from memory chips to MLCCs to keep production running.
William Li, CEO of Shanghai-based premium EV maker Nio, said last month that surging raw material prices, particularly memory chips, had added 20,000 yuan to the production cost of each vehicle. He admitted that carmakers were under heavy pressure to stay afloat.
Ecarx, a tech firm that provides hardware and software known as the “intelligent brain” for digital cockpits and preliminary self-driving systems, said strong innovative capability and a full-stack development platform could help companies dodge risks in an undersupplied market.
Lily Cai, executive vice-president of Ecarx, said car parts suppliers with deep market knowledge could anticipate trends by working closely with upstream manufacturers to develop new products and technologies.
“Market know-how can effectively help us plan ahead,” she said. “Ecarx established multiple major partnerships with key component suppliers to deepen innovation as early as last year. Those collaborative efforts gave us an advantage in securing sufficient supply and outpacing our peers in product development.”
In the second half of 2025, Ecarx signed agreements with PCB maker Victory Giant Technology, semiconductor firm Monolithic Power Systems and tech giant Samsung to build high-performance, AI-powered computing platforms for intelligent vehicles.
Analysts warned that despite the mainland market’s falling sales, a push by manufacturers to build smarter cars could worsen shortages.
Overall deliveries on the mainland, including petrol-powered cars and EVs, plunged 21 per cent year on year in July to 1.46 million units, according to the China Passenger Car Association (CPCA).
Some 12 per cent of new cars priced between 150,000 yuan and 200,000 yuan were fitted with lidar sensors, which help cars map terrain, in 2025. The proportion climbed to 27 per cent in the first quarter of 2026, CPCA data showed.


Tesla revives China discounts; Iran war drives shift to electric cars: 7 EV reads

China’s five-year plan for the new-energy vehicle sector

No pit stops: Chinese coal mine makes big upgrade with autonomous electric trucks

‘Key pillar’: the 5-year powerhouse plan for China’s car industry

Electric & new energy vehicles

Components crunch: China’s carmakers face rising costs to keep intelligence edge

Printed circuit boards are inspected at a factory in Dongguan, Guangdong province, China. Photo: Reuters

Hesai rides on lidar growth as smart cars gain ground despite China’s struggling market

Smart cars use data from lidar sensors to build highly accurate maps of their surroundings. Photo: Getty Images

Chinese robotaxi firms see eased regulatory bottleneck in Europe as deployment picks up

A Pony AI robotaxi on an exhibition stand during the 2026 Auto China show in Beijing. Photo: dpa

Karaoke in the car? China’s new wave of gadget-laden electric vehicles

BYD, China’s leading electric vehicle manufacturer, is integrating karaoke systems into its new premium models. Photo: Xinhua

A BYD vehicle fitted with a Stingray karaoke system. Photo: BYD USA

Geely’s Li Shufu hands over reins to younger generation for ‘healthy’ growth

Li Shufu, founder of Geely Auto, arrives for a session of the Chinese People’s Political Consultative Conference National Committee in Beijing on March 4. Photo: EPA

An electric vehicle is charged at a Geely showroom in Lagos, Nigeria, on June 18. Photo: Reuters

Tesla faces uphill battle for FSD entry as China rewrites self-driving car rules: analysts

A woman uses her phone as she walks past a Tesla store in Beijing on July 31. Photo: Tingshu Wang

A staff member cleans a Model Y L inside a Tesla store at a shopping centre in Beijing on May 12. Photo: Reuters

Business

China EVs

China Business

Companies

News

Markets

China Future Tech

Smart vehicle makers scramble for key parts PCBs and MLCCs as AI demand soaks up supply, leaving margins under siege


Smart vehicle makers scramble for key parts PCBs and MLCCs as AI demand soaks up supply, leaving margins under siege.


Components crunch: China’s carmakers face rising costs to keep intelligence edge

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Smart vehicle makers scramble for key parts PCBs and MLCCs as AI demand soaks up supply, leaving margins under siege

Smart vehicle makers scramble for key parts PCBs and MLCCs as AI demand soaks up supply, leaving margins under siege