AI industry demand is strong! Electronic grade fiberglass giant officially announced a 20% price increase

Driven by strong demand in the AI ​​server, high-performance computing (HPC), low-orbit satellite communications and automotive electronics markets, the supply of high-end fiberglass cloth T-Glass (low coefficient of thermal expansion, Low CTE) continues to be tight. Nittobo, a global giant in electronic-grade fiberglass materials, announced that the price of related fiberglass products of its Composite Materials Division will be increased by 20% from August 1.

Market analysts believe that although this move will increase the manufacturing cost of PCB and high-end substrates, large manufacturers are expected to smoothly pass on the cost and improve gross profit margin.

Nittobo's products for price increase include fiberglass roving cloth, chopped strand, chopped strand mat, roving cloth, cut fiber and surface mat. Nittobo emphasized that the cost of raw materials, manpower, logistics and equipment maintenance continues to rise. Although cost rationalization has been carried out through internal measures, it is still difficult to fully absorb it. Price increases are necessary to maintain stable supply and business continuity.

According to industry insiders, the world's highest-end fiberglass cloth is T-Glass, which has the characteristics of low thermal expansion coefficient and is widely used in high-end IC substrates (such as ABF substrates) and advanced chip packaging substrates; the second is low dielectric (Low DK) glass fiber cloth, which is mainly used for high-frequency and high-speed transmission PCB boards. In addition to Nitto Bosho, the world's major T-Glass suppliers include AGY in the United States and Taiwan Glass in Taiwan, but the overall production capacity is in a tight supply and demand situation.

Nitto Bosho's new plant is scheduled to be put into production at the end of 2026, when it will greatly increase the supply of high-end fiberglass materials, helping to alleviate the supply shortage. The timing of this price increase coincides with the strong demand in the AI ​​industry. Investment institutions believe that it will be beneficial to the development of AI and high-end substrate-related supply chains in the medium and long term.

Industry insiders said that due to the high technical threshold and strong market demand for high-end PCB substrates, manufacturers have strong cost transfer capabilities. The prices of high-end ABF substrates from substrate manufacturers such as Xinxing and Zhending are expected to rise due to the increase in material costs, thereby improving gross profit. However, facing the pressure of rising raw material prices, PCB manufacturers are also actively promoting the diversification of the supply chain and testing other alternative materials to reduce dependence on a single source of materials.

Nittobo is an important supplier of raw materials for substrate production. Changes in material costs will affect product quotations. The final quotation still needs to be determined after consultation with customers based on factors such as quantity and delivery time.

Overall, this wave of Nittobo's raw material price increase does cause cost pressure in the short term, but with the continued strong support of terminal market demand, the product prices of high-end substrate manufacturers are expected to adjust synchronously. Investment institutions expect that the operating performance of AI-related PCB supply chains in the second half of this year will remain optimistic.