Author: Junxi
In early March 2026, Japanese material giants Resonac and Mitsubishi Gas Chemical successively announced substantial price hikes of up to 30% for copper-clad laminates (CCL) and related materials. At almost the same time, domestic glass fiber leaders Guangyuan New Material and Chongqing Polycomp International Corp. (CPIC) also issued a new round of price increase notices. Prior to this, Unimicron, a major IC substrate manufacturer, had explicitly stated at its February investors' conference that the supply-demand imbalance of glass fiber cloth "will not be resolved in 2026." This series of intensive price hikes and shortage signals has brought the structural shortage of glass fiber cloth—a basic material long operating behind the scenes of the industry—into the spotlight. Glass fiber cloth is a core upstream material for manufacturing PCBs (Printed Circuit Boards) and IC (Integrated Circuit) packaging substrates. Its shortage means that the entire semiconductor industry chain, from advanced packaging of AI chips to terminal products of consumer electronics, will face pressures of rising costs and extended lead times. Currently, order backlogs at upstream material manufacturers have reached up to half a year. Downstream PCB manufacturers are experiencing high performance growth driven by AI demand, and NVIDIA CEO Jensen Huang has reportedly visited upstream suppliers in Japan in person to secure material supply. It is extremely rare in the semiconductor industry for terminal chip companies to directly approach the most upstream material manufacturers. How severe are the problems triggered by this glass fiber cloth shortage?
01. Persistent Shortage of Glass Fiber Cloth
Glass fiber cloth is the core skeleton material of CCL, which in turn is the direct raw material for manufacturing PCBs and IC packaging substrates. Among them, high-end low coefficient of thermal expansion (CTE) glass fiber cloth is widely used in the organic core layer of IC substrates for AI chips, providing necessary dimensional stability and mechanical support for large-size, high-power-consumption chip packaging. The industry refers to it as "chip armor." The value of glass fiber cloth accounts for approximately 30% of CCL costs, making it a key variable in the PCB cost structure.
One of the fundamental reasons for the current supply tension lies in the extreme concentration of the high-end glass fiber cloth market. Japan's Nitto Boseki controls approximately 90% of the global supply of high-end glass fiber cloth. The production of this type of glass fiber cloth relies on special electric melting furnaces operating at 1,600 to 1,700 degrees Celsius. From raw material melting, spinning, to weaving, the process chain is long with high technical barriers, and the construction cycle for new capacity usually takes several years. This highly concentrated supply structure leaves the market with almost no elastic buffer in the face of sudden demand changes.
Since the second half of 2025, high-end glass fiber cloth has entered a state of continuous shortage. Entering 2026, price hikes have significantly accelerated. On February 4, domestic glass fiber leaders Guangyuan New Material and CPIC issued price increase notices, raising the quotation for 7628-type traditional glass fiber cloth by 0.5 to 0.6 RMB per meter, a significantly larger margin than before. In the international market, Resonac has increased the prices of CCL and adhesive films by more than 30% since March 1. Subsequently, Mitsubishi Gas Chemical announced a 30% across-the-board price increase for CCL, prepregs, and resin-coated copper foil starting April 1.
Both Resonac and Mitsubishi Gas Chemical are core suppliers of IC substrate materials. Industry insiders analyze that the price hikes by the two Japanese companies reflect market expectations of stronger IC substrate demand in the second half of 2026, driven primarily by the AI, smartphone, and memory sectors. Mitsubishi Gas Chemical issued delivery delay notices to customers in mid-2025, stating that CCL and prepreg orders have exceeded existing capacity, and upstream glass fiber cloth supply lags behind demand growth. According to feedback from BT substrate manufacturers, the lead time for Mitsubishi Gas Chemical's orders has been extended to over 16 weeks.
In terms of price trends, the price of 7628-type glass fiber cloth has risen from 4.15 RMB per meter at the end of September 2025 to the current 4.75 RMB per meter, with price increases in October and December 2025, and January 2026, each ranging from 0.15 to 0.25 RMB per meter. Building on a price increase of over 50% in 2025, glass fiber manufacturers in China's Taiwan region have adjusted prices monthly by 10% to 15% in 2026. Industry research predicts that prices could double by the end of 2026. Huatai Securities believes that glass fiber cloth has undergone four rounds of price hikes since early 2025, and the shortage has spread from high-end to ordinary products, potentially kicking off a new round of price increase cycles in 2026. Citigroup analysts expect the price increase of glass fiber cloth in 2026 to potentially reach 25% or even higher.
02. Surge in PCB Demand
AI computing power demand is the core driving force behind this round of supply tension. The iteration of AI chips, represented by NVIDIA, is fundamentally changing the technical specifications and material consumption of PCBs and packaging substrates.
According to public data, the PCB layer count of NVIDIA's GB300 server has increased to over 16 layers, with a single unit requiring 18 to 24 meters of glass fiber cloth, an approximately fivefold increase compared to traditional servers. In higher-end product lines, the PCBs used in traditional 8-GPU servers have 20 to 24 layers, while those for the Rubin architecture have reached 40 to 78 layers. The interposer area of NVIDIA chips has expanded from 814 mm² in the Hopper architecture to 1,700 mm² in the Blackwell architecture, an increase of 109%, and will continue to expand in subsequent Rubin and Feynman generations. Larger packaging areas and higher power density impose stricter requirements on the CTE and dimensional stability of substrate materials, making high-end glass fiber cloth an irreplaceable choice.
Bilal Hachemi, an analyst at Yole Group, pointed out in an interview that this high-end glass fiber cloth has specific dielectric constants and CTE, outperforming other alternative materials in the organic core substrates of AI chips, and "it is not easy to replace it."
This magnitude change in demand is directly reflected in the value.
According to institutional estimates, the PCB value of a single AI server is as high as 19,500 RMB, which is eight times that of a regular server. Goldman Sachs analysis points out that AI is driving the PCB industry into a "super cycle." In 2026, the global AI server PCB market size will grow by 113% year-on-year, driving the upstream CCL market growth rate to 142%, and the price hike trend will run through 2026 to 2027. Consulting firm Prismark predicts that from 2024 to 2029, the compound annual growth rate (CAGR) of the global PCB industry output value will be about 5.2%, among which the CAGR of AI server-related HDI boards will reach 16.3%. Data from market research firm Mordor Intelligence shows that the global PCB industry scale will increase from $85.2 billion in 2026 to $109.68 billion in 2031.
The concentrated explosion of demand has brought about a significant capacity crowding-out effect. Guojin Securities analysis points out that the capacity required to produce one unit of high-end CCL is equivalent to crowding out the capacity of 4 to 5 units of ordinary CCL. A substrate executive at a listed PCB company revealed, "It is expected that glass fiber cloth will remain in a tight supply situation throughout this year, and it is not expected to be alleviated until the second half of 2027," with current substrate lead times extended to half a year. The executive also stated that AI-related PCB demand is extremely strong, while consumer demand remains relatively stable.
From a global perspective, the supply-demand gap data for high-end materials is more intuitive. According to industry statistics, the global monthly capacity of HVLP4-grade high-end copper foil is only 700 tons, while demand in 2025 has already reached 850 tons; for low-dielectric glass fiber cloth, global demand in 2026 is expected to be 18.5 million meters, with effective capacity at only 10 million meters. Japanese companies hold over an 80% share in segmented markets such as M9-grade CCL and high-end glass fiber cloth, forming a de facto supply monopoly. They prioritize high-priced AI orders, causing the delivery cycle for traditional orders to stretch from 8 weeks to 20 weeks.
03. Multidimensional Impact on the Semiconductor Industry Chain
The supply tension of glass fiber cloth and CCL has had a substantive impact on the semiconductor industry chain through multiple pathways.
Packaging substrates have become a key bottleneck for AI chip delivery. Advanced packaging technologies, represented by TSMC (Taiwan Semiconductor Manufacturing Company) CoWoS, are the core link in the current mass production of AI chips, and the manufacturing of ABF packaging substrates relies on high-end glass fiber cloth. The shortage of glass fiber cloth directly translates into an insufficient supply of ABF substrates, thereby limiting the capacity release of CoWoS. Reports indicate that the rapid increase in CoWoS advanced packaging demand has driven up ABF substrate material orders, further crowding out upstream glass fiber cloth supply. Unimicron, a major IC substrate and PCB manufacturer, explicitly stated at its February 2026 investors' conference that due to strong AI customer demand, the supply-demand imbalance of glass fiber cloth "will not be resolved in 2026," affecting almost all AI customers.
NVIDIA, as a terminal chip design company, has unprecedentedly directly contacted the most upstream material supplier Nitto Boseki to ensure the capacity supply of high-end glass fiber cloth. Yole Group analyst Hachemi stated, "This is the first time I have seen a terminal customer like NVIDIA directly contact upstream material suppliers to secure capacity." This move, on the one hand, highlights the severity of the supply problem; on the other hand, it also raises market concerns about further supply concentration—once head customers lock in most of the capacity, other chip companies and application fields will face greater supply pressure.
The wave of price hikes is spreading to a broader range of semiconductor fields. Since the beginning of 2026, price hikes in the semiconductor industry are no longer limited to PCB materials. Samsung has raised DRAM prices by nearly 100%, and NAND flash memory prices by 55% to 60%, with SK Hynix and Micron following suit; Infineon plans to increase power semiconductor prices by 5% to 15% in April; Texas Instruments is raising prices for some analog chips by 15% to 85% starting in April; and TSMC's advanced processes are expected to see price increases of 3% to 10%. The common background for these price hikes is the pull effect of AI computing power demand on the entire industry chain, as well as the contradiction between new demand and limited capacity after the end of the inventory digestion cycle from 2023 to 2024.
The consumer electronics market bears the pressure of cost transmission. Omdia's latest forecast shows that global PC shipments are expected to drop by 12% to 245 million units in 2026, mainly due to the sharp increase in memory and storage prices, which will rise by at least 60% in the first quarter of 2026. Among them, PC shipments priced below $500 are hit the hardest, with an expected decline of about 28%. This data indicates that price hikes for upstream materials and chips are affecting the terminal market through the cost transmission mechanism, with a more significant impact on price-sensitive mid-to-low-end products. Citigroup analysts previously also expected that the price increase of glass fiber cloth is highly likely to be transmitted downstream, pushing up the selling prices of terminals such as smartphones and laptops.
Acceleration of Domestic Substitution Process. Against the backdrop of tight global supply of high-end materials, Chinese companies are accelerating technological catch-up and capacity layout in the field of glass fiber cloth. As of August 2025, the monthly capacity of special glass fiber cloth from domestic manufacturers has exceeded 6 million meters. Honghe Technology, as a leader in low-dielectric glass fiber cloth, saw its net profit attributable to shareholders increase by 745% to 889% year-on-year in 2025, with the increase in net profit excluding non-recurring gains and losses reaching as high as 3377% to 3969%. CPIC has achieved mass production of second-generation low-dielectric glass fiber cloth, with full orders and full-capacity operation. The national "15th Five-Year Plan" lists ICs as a key development area, which will further stimulate the demand for domestic substitution of key materials such as glass fiber cloth. However, it should be pointed out that in the most high-end glass fiber cloth field, there is still a significant technological gap between domestic enterprises and Nitto Boseki, making complete substitution difficult in the short term.
04. When Will Supply and Demand Rebalance?
In the face of continuous supply tension, major manufacturers have launched large-scale capacity expansion plans. Under its "Big VISION 2030" strategy, Nitto Boseki plans to invest 80 billion yen, approximately $510 million, over four fiscal years for global capacity expansion. Of this, 15 billion yen will be invested in building a new high-end glass fiber cloth factory at the Fukushima site, with the goal of increasing capacity to more than three times the 2025 level by 2028. Meanwhile, Nitto Boseki is expanding yarn capacity at its plant in China's Taiwan region and cooperating with Nan Ya Plastics to outsource part of the weaving. It is expected that by 2027, about 20% of the glass fiber cloth will be woven by Nan Ya. Panasonic Industry has also announced an investment of 7.5 billion yen to build a new MEGTRON circuit board material production line to meet AI server demand.
However, the release of new capacity takes time. The capacity of Nitto Boseki's new Fukushima factory will enter the market at the earliest by mid-2027. Yole Group analyst Hachemi estimates that the supply-demand imbalance is not expected to be alleviated until the second half of 2027 at the earliest. During this period, the supply tension of high-end glass fiber cloth and CCL will persist, and the pressure of price hikes will be hard to dissipate. Goldman Sachs judges that the price hike trend will run through 2026 to 2027.
Bank of America estimates that the sales of Nitto Boseki's electronic materials division will increase from 40.9 billion yen in 2025 to 87.7 billion yen by March 2028, with an operating profit margin approaching 48%. Bank of America analyst Takashi Enomoto pointed out that "the demand growth for high-end glass fiber cloth may exceed initial expectations." Not only is the demand for thick specifications used in GPU/CPU packaging growing, but the demand for ultra-thin specifications is also rising, as frontier devices are transitioning from traditional to high-end glass fiber cloth.
Hachemi from Yole Group also warned that glass fiber cloth is not the only potential bottleneck in the IC substrate supply chain. Materials such as copper foil layers, solder resist films, and CCL may also experience similar supply tensions. This means that even if the supply and demand of glass fiber cloth gradually ease after 2027, the overall vulnerability of the semiconductor packaging material supply chain will remain a long-term issue.
05. Conclusion
This supply chain tension triggered by the glass fiber cloth shortage is essentially the result of AI computing power demand transmitting from the application layer to the physical layer, and it will last at least until the second half of 2027. It exposes the global semiconductor supply chain's over-reliance on a single supplier and forces chip companies to intervene in the upstream material segment with unprecedented depth.
The semiconductor industry is shifting from the old cycle dominated by consumer electronics to a new cycle driven by AI computing power. In this transition, the ability to control underlying materials and packaging technologies will become a key factor in determining the competitive landscape, just like advanced process nodes.