Textile mills have been weaving fabric for a lifetime, but there is one type of fabric whose customers are not apparel brands, but NVIDIA and Apple. It is not used for clothing, nor is it dyed or printed; instead, it has become the most lucrative yet low-profile track right now—electronic fabric, fully named electronic-grade glass fiber fabric, which is the core skeleton material for copper clad laminates (CCL) and printed circuit boards (PCB). Without it, there would be no PCBs; without PCBs, there would be no smartphones, computers, or AI servers. This 'fabric' hidden deep inside servers is telling a brand-new story about weaving, with a pricing rhythm of 'adjusting every month.'
01. From 'Niche Supporting Role' to 'Rigid Demand for Computing Power'
In the past, the fate of electronic fabric was highly tied to consumer electronics such as smartphones and PCs, resulting in steady industry growth, strong cyclical fluctuations, and limited profit margins. However, since 2025, the explosion of AI servers has completely rewritten the logic of this track. According to a research report by Huatai Securities, the market demand for low-dielectric electronic fabric driven by computing GPUs will reach approximately 68.57 million meters in 2025, and will increase to 140 million meters in 2026; Zhongyan Puhua estimates that it is expected to approach 240 million meters in 2027, with a compound growth rate of about 87% from 2025 to 2027. QYResearch data shows that the global high-end electronic glass fiber fabric market size reached USD 1.596 billion in 2025, and is expected to grow to USD 1.692 billion in 2026.
The root of the demand explosion lies in the qualitative change in the specification requirements of PCBs for AI servers. The number of PCB layers in traditional servers is only 8 to 14, while AI servers have generally increased to 20 to 40 layers, with the orthogonal backplanes of some flagship models reaching up to 78 layers. Every layer requires electronic fabric as a skeleton, so the electronic fabric consumption per AI server is 3 to 5 times that of traditional servers. Morgan Stanley's bill of materials cost breakdown report released in May 2026 pointed out that the PCB value per cabinet in NVIDIA's Rubin architecture has increased by 233% compared to the previous generation, ranking first in the growth rate among the downstream components it covers. This means that electronic fabric is no longer an 'inconspicuous auxiliary material,' but a key variable determining the performance of computing power equipment.
02. Triple 'Choke Points' on the Supply Side
Amid the surging demand, the supply side is facing an almost unsolvable short-term bottleneck. This shortage is not a problem of a single link, but a superposition of triple constraints. The first comes from midstream raw materials—electronic yarn capacity is tight, and companies are taking the initiative to shift their production lines to higher-profit AI-specific high-end fabrics, resulting in a contraction in the supply of conventional categories. The second comes from core equipment—the air-jet looms used for high-end electronic fabrics are overly dependent on a few suppliers such as Toyota in Japan, and the delivery cycle, as well as the construction and debugging cycle of a single high-end production line, is as long as 18 to 24 months. The third comes from the technical barriers themselves—high-end electronic fabrics with low dielectric and low thermal expansion properties have extremely high requirements for formulation and process control, making it difficult for new entrants to cross in the short term.
The result of the superposition of triple constraints is the soaring prices. This round of electronic fabric price increases started in the fourth quarter of 2025. Taking the most widely used 7628 specification as an example, its price has risen from CNY 3.8 per meter to CNY 11.8 per meter in early September 2026, which is more than 30% higher than the peak of the previous round; the cumulative increases for the thinner 1080 fabric and 2116 fabric have reached 290% and 280%, respectively. Kingboard Laminates (01888.HK), a leader in copper clad laminates, has issued seven price increase notices within the year. Zhang Guorong, chairman of its controlling shareholder Kingboard Holdings (00148.HK), frankly stated at the group's interim results presentation that electronic fabrics are priced up as soon as they are available, and even the supply needed for its own copper clad laminate production is insufficient, 'expecting no worries about business in the next two to three years.'
03. 'China's Breakthrough' in the High-End Market
From the perspective of the global competitive landscape, the electronic fabric industry shows a clear differentiated situation of 'oversupply at the low end and shortage at the high end.' In the most high-end low thermal expansion (Low-CTE) fabric field, Nitto Boseki of Japan accounts for about 90% of the global supply, with a market share of over 60% for Low-Dk second-generation fabric and quartz fabric, and a delivery cycle of up to 9 months; Asahi Kasei is technologically leading in the low-dielectric fabric field, with a global market share of about 31%.
However, this pattern is being gradually broken by Chinese companies. As the world's top company in electronic fabric capacity, China Jushi (600176) sold 1.062 billion meters of electronic fabric in 2025, with an electronic fabric capacity of about 960 million meters at the end of the year, and a market share of 23% in the global electronic glass fiber market. Through its self-developed low-dielectric yarn technology, its cost is 30% lower than that of its peers, and it has passed NVIDIA's certification to enter the AI server supply chain. On March 18, 2026, the production line of China Jushi's Huai'an project, with an annual output of 100,000 tons of electronic-grade glass fiber and 390 million meters of electronic fabric, was successfully ignited. This is the world's largest single electronic-grade glass fiber production line, with a capacity scale accounting for 9% of the global market. The product planning covers high-end varieties urgently needed for 5G/6G communications, such as ultra-fine yarn and ultra-thin fabric. Sinoma Science & Technology (002080)'s products have covered the full categories of first-generation and second-generation low-dielectric, low-expansion, and ultra-low loss low-dielectric fabrics, all of which have completed the certification and mass supply for leading domestic and foreign customers. Honghe Technology (603256) has achieved the world's first in revenue in the field of ultra-thin and very thin fabrics, with a market share of 20.5%, and is the only domestic manufacturer capable of mass-producing the full series of low thermal expansion (Low-CTE) fabrics.
04. Expansion Wave and the Long-Distance Race for Domestic Substitution
Facing relatively clear demand growth, the expansion plans of leading domestic companies are being intensively implemented. Since 2026, China Jushi has announced capacity expansion three times, and the total capacity of electronic fabric is expected to leap to over 1.6 billion meters. The total planned capacity of Sinoma Science & Technology's special fiber fabric is over 100 million meters, with the capacity of three newly built projects totaling 94 million meters. Chongqing Polycomp International (301526) also plans a private placement of no more than CNY 5 billion to step up high-end electronic fabric. However, from the perspective of capacity, the newly added high-end capacity will be gradually put into operation and released from 2027 to 2028, which means that the tight balance between supply and demand will continue for at least the next year or two.
What is more worthy of attention is the deep significance of domestic substitution. Quoting Zhou Yuxian, chairman of China National Building Material Group, the Economic Information Daily pointed out that high-end electronic base materials have long relied on imports, which is 'like using someone else's foundation on a high-rise building, always posing safety hazards.' At present, about 75% of the global copper clad laminate capacity is concentrated in mainland China, which provides the broadest application market for upstream electronic-grade glass fiber. However, for the most top-tier ultra-low dielectric and ultra-thin products, there is still a gap between domestic and the highest international levels. Liu Changlei, secretary-general of the China Glass Fiber Association, also pointed out that the over-reliance on imports for key equipment such as air-jet looms and tension controllers used in the production of high-end glass fiber electronic fabrics has restricted the development of the industry.
From an inconspicuous industrial base material to a strategic material that drives the AI computing power competition, the value re-evaluation of the electronic fabric industry has just begun. When global AI giants are queuing up for a piece of fabric, the opportunity for Chinese companies does not lie in repeating the expansion of low-end capacity, but in whether they can truly gain a firm foothold in the most high-end products. This competition about 'fabric' is, in the final analysis, a long-distance race for the autonomy of material processes and equipment.
It should be pointed out that the current high prosperity of high-end electronic fabrics is largely built on the short-term rigidity of supply. If the capacity under construction by companies such as China Jushi, Sinoma Science & Technology, and Chongqing Polycomp International is released intensively on schedule from 2027 to 2028, coupled with the fluctuation of downstream AI capital expenditures, there is a possibility of phased price corrections, and the sustainability of this round of prosperity remains to be observed.