Brazil: Global surge in inputs puts pressure on electrical, electronic industry

This press release was published in English using an automatic translation system

By Abinee (Brazilian Electrical and Electronics Industry Association)

A recent survey conducted by Abinee showed that 47% of the companies in the electrical and electronic sector are already feeling cost pressures on components and raw materials for production. This was the third consecutive increase in the percentage of affected companies, which stood at 23% in November 2025, reaching in February the highest level in the last 20 months.

The reasons for the successive increases in inputs vary, and the movement is also already reflected in the final goods manufactured by the electrical and electronic industry.

The most prominent case is that of memory. Since December 2024, major suppliers have been renegotiating contracts with Brazilian companies. Adjustments can reach 100% along the chain, with an estimated pass-through of around 30% in the final price of equipment such as notebooks, desktops, cell phones and TVs becoming more expensive, which may slow down sales.

“The current situation is considered more serious than what was experienced at the height of Covid-19. During the pandemic, the problem was a temporary mismatch in supply chains,” says Abinee’s CEO, Humberto Barbato. Now, what is driving the crisis is the explosive emergence of a new type of demand: data centers focused on artificial intelligence. “This pressure is expected to remain strong until 2028,” he says.

On the other hand, semiconductor manufacturers’ response is slow due to the volume of investments and production complexity. “Supply has not kept pace with the same rate of demand,” he points out.

Industries have also been feeling the lack of components and raw materials in the market, although this indication is still small, rising from 7% to 8% in the February survey compared to the previous one. In the specific case of semiconductors, 13% of the companies interviewed that use these items in their production reported difficulties in acquiring them. This result was 5 percentage points above the 8% observed in the previous survey.

In addition to memory, companies are also seeing rising costs for other inputs such as gold, silver, copper, steel, aluminum, and plastic, with dispersed effects across various production chains depending on the degree of use of each item.

According to data from the London Exchange, the price of copper in reais rose 16.8% in March compared to the same month in 2025, while aluminum recorded an increase of 15.3% in a similar period. This increase was mitigated by the appreciation of the Real against the dollar.

In the case of gold and silver, which have reached record values, the increase results from the demand for these metals as safe-haven assets in a scenario of geopolitical tensions, currency depreciation, and uncertain economic policies.

The case of plastic is directly related to the escalation of oil since the beginning of the war by the US and Israel against Iran. According to data from the Energy Information Administration – EIA, the price of a barrel of Brent crude oil has even surpassed US$ 120, with growth of 46% in March alone compared to February. This movement is being reflected in the surge in prices of polymers and plastic resins, which have already exceeded 70%.

“At the same time, this situation is also putting pressure on fuels, with effects on freight prices and adding logistical bottlenecks to an already complicated scenario,” adds Barbato.

He states that the scenario is one of generalized global inflation, with impacts on companies’ production and revenue, on sales and on the population’s purchasing power, as well as effects on domestic economic policy, delaying the process of reducing the interest rate. “The final result may be GDP performance even lower than expected,” he concludes.