Why has high-end electronic fiberglass cloth suddenly become a hard currency?
However, many may not realize that behind this surge in market sentiment, the real revaluation isn't just about GPUs and AI chips themselves.
Who would have thought that this "inorganic fiber," previously found more often on construction sites and utility poles, has transformed into a "strategic material"-high-end electronic fiberglass cloth-that's now being closely watched by Nvidia CEO Jensen Huang and Apple's supply chain executives?
While the market is still celebrating GPU computing power, the real bottleneck in the AI industry chain has quietly shifted to the "physical foundation" supporting chip operation.
This article will guide you through understanding who truly forms the industrial backbone in this 1.6T era "arms race."
I. The Essence of Fiberglass: The "Backbone" of High-Performance Inorganic Non-metallic Composite Materials
Fiberglass is an inorganic non-metallic fiber material made from glass, melted at high temperatures and then drawn. The diameter of a single filament typically ranges from a few micrometers to over twenty micrometers.
The core performance characteristics of fiberglass are lightweight and high strength, with a specific strength far exceeding that of steel, high temperature and corrosion resistance, excellent electrical insulation, and good dimensional stability.
Fiberglass is rarely used alone; instead, it is used as a reinforcing material in composites with resins and other matrices to form glass fiber reinforced polymer (GFRP) composites, becoming a key basic material in modern industry to replace traditional metals and building materials.
The importance of fiberglass stems from its irreplaceable role as the "backbone" of industry.
From a supply chain perspective, fiberglass is at the very upstream raw material stage, with downstream applications spanning pillar sectors of the national economy such as building materials, transportation, electronics, energy and environmental protection, and aerospace, accounting for approximately 25%, 24%, 18%, 14%, and 11% of demand, respectively.
This highly diversified application structure endows the fiberglass industry with both cyclical and growth attributes. Demand in the traditional building materials sector fluctuates with the macroeconomy, forming the industry's cyclical foundation; while demand from emerging fields such as wind turbine blades, lightweight new energy vehicles, and AI computing hardware injects continuous structural growth momentum into the industry.
II. The AI Computing Power Revolution: A Structural Leap Driving Fiberglass Demand from Quantitative Increase to Qualitative Change
The demand for fiberglass driven by artificial intelligence is not simply a quantitative expansion, but a qualitative reshaping from low-end to high-end, and from general-purpose to specialized.
The core logic lies in the fact that the exponential growth of AI computing power places performance requirements on chip packaging substrates and high-frequency, high-speed PCBs far exceeding those of traditional electronic products. High-end electronic-grade fiberglass cloth is the physical foundation for achieving these performance indicators.
2.1 Low-Dielectric Electronic Cloth (Low Dk/Df): The "Signal Highway" for AI Servers and High-Speed Switches
AI servers and 800G/1.6T high-speed switches operate at extremely high frequencies. When signals are transmitted in the PCB, the dielectric constant (Dk) and dielectric loss factor (Df) of the substrate material directly determine signal integrity and transmission rate. The Df value of traditional E-glass electronic cloth can no longer meet the requirements; specially formulated low-dielectric electronic cloth must be used.
Taking NVIDIA's GB200/300 platform as an example, its PCB specifications have been upgraded to M8-level copper-clad laminate. The next-generation Rubin platform is expected to introduce even more stringent M9-level materials, leading to a rigid increase in demand for supporting low-dielectric fiberglass cloth. Currently, the price of 7628 electronic cloth has increased for four consecutive rounds, with a cumulative increase of nearly 40%, demonstrating the tight supply and demand situation.
2.2 Low Coefficient of Thermal Expansion Electronic Cloth (Low CTE/T Cloth): The "Physical Foundation" of Advanced Packaging
This is the most core and most challenging sector in the AI-driven upgrade of fiberglass demand. As AI chip sizes continue to increase, for example, NVIDIA's Rubin GPU has reached 5.5 times the mask size, the mismatch in the coefficient of thermal expansion (CTE) between the chip and the packaging substrate has become a core bottleneck restricting yield. The CTE of the chip is approximately 3ppm/°C, while that of traditional organic substrates is as high as 15-18ppm/°C, causing severe warping under the high temperatures of reflow soldering, leading to solder joint cracking and interface delamination.
Low coefficient of thermal expansion (CTE) electronic fabric, known in the industry as "T-fabric," boasts a CTE as low as 3-4 ppm/°C, precisely matching silicon chips and solving the warpage problem at the material level. It is an irreplaceable key consumable in advanced packaging such as CoWoS.
Currently, the global T-fabric market is dominated by Nittobo of Japan, and new effective supply is not expected to gradually materialize until after 2027. Institutional estimates suggest that the global T-fabric supply-demand gap may further widen to 18% in 2026.
A research report from CITIC Securities indicates that global total demand for T-fabric will surge from 9.63 million meters in 2025 to 20.42 million meters in 2026, a year-on-year increase of 112%, and will reach 69.59 million meters in 2028, representing a compound annual growth rate of over 90% over three years.
2.3 Quartz Cloth (Q Cloth): The Ultimate Solution for the 1.6T Era
When the exchange rate further increases to 1.6T, the required dielectric constant (Df) value of the fiberglass cloth drops to below 0.001, exceeding the physical limits of ordinary low-dielectric fiberglass cloth. Quartz fiber cloth, with its extremely low dielectric loss (Df < 0.001) and ultra-low dielectric ester (CTE) (approximately 0.5 × 10⁻⁶/°C), has become the ideal solution for 1.6T high-speed copper-clad laminates. Domestic company Feilihua has achieved vertical integration of the entire industry chain from quartz sand to quartz cloth and has expanded its global customer base to include high-quality copper-clad laminates.
III. Core Expectation Gap: A Valuation Paradigm Shift from "Cyclical Goods" to "Inflation Goods"
The market's traditional understanding of the fiberglass industry remains within the framework of a "cyclical building materials product," but AI-driven structural changes are reshaping the industry's underlying logic. The supply and demand situation for high-end electronic fabrics, such as T-fiber fabric, low-dielectric fabric, and Q-fiber fabric, has shifted from "overcapacity" to "hard supply shortage." Expansion cycles are as long as 2-3 years, and technical certification barriers are extremely high, resulting in very limited new effective supply in the short term.
Meanwhile, panic buying in downstream industries has spread from chips to basic materials. South Korean PCB manufacturers have placed pre-orders with Chinese copper-clad laminate (CCL) manufacturers five times their normal monthly usage, and delivery cycles for some high-end CCLs have been extended to over six weeks.
This means that high-end electronic fabrics are transforming from a "cost item" to a "strategic material," and their pricing logic is shifting from cost-plus pricing to scarcity premiums.
IV. Industry Competitive Landscape: High-End Breakthrough Under Oligopoly Dominance
4.1 Competitive Landscape
The fiberglass industry is characterized by heavy capital and high technological barriers. Taking roving as an example, each 10,000 tons of capacity requires approximately 100 million yuan in fixed asset investment; a roving production line with an annual capacity of 120,000 tons requires an investment of approximately 1.2 billion yuan.
These barriers naturally lead to a high degree of industry concentration. Globally, the combined annual production capacity of six major fiberglass companies-China Jushi, Taishan Fiberglass (a subsidiary of Sinoma Science & Technology), International Composites, Owens Corning (OC), NEC Glass (NEG), and Shandong Fiberglass-accounts for approximately 70% of the global total.
Domestically, the combined production capacity of the three major fiberglass companies accounts for approximately 70% of the domestic market. As of the first half of 2025, China Jushi's capacity accounted for approximately 35%, Sinoma Science & Technology approximately 17%, and International Composites approximately 14%, with the top five companies accounting for nearly 80% of the total capacity.
In the electronic fabric (fine yarn) sector, the concentration is equally significant. The combined annual production capacity of five companies-China Jushi, Kingboard Holdings, Kunshan Bicheng, Taiwan Glass Industry, and International Composites-accounts for approximately 65% of the global fine yarn production capacity.
4.2 Overseas Manufacturers: Japanese Companies Monopolize High-End Markets, Slow Expansion Creates Supply Vacuum
① Nittobo: Global Dominant in T-Fabric
Nittobo is the absolute leader in global T-fabric, consistently holding approximately 85% market share. T-fiber fabric (T-fiber) has a CTE as low as 2.9-3 ppm/℃, precisely matching silicon chips. Before 2024, only Nittobo had the capacity for mass production of T-fiber fabric globally, forming a monopoly.
However, Nittobo's expansion cycle is as long as 18-24 months, with almost zero new capacity added in the short term. The explosive demand for AI computing power has triggered panic buying downstream due to its capacity bottleneck. Nvidia CEO Jensen Huang recently personally flew to Japan to visit Nittobo, while Apple has increased its personnel stationed in Japan for negotiations. Qualcomm has been forced to break through traditional supply chain layers to seek alternative resources.
② Asahi Kasei: The Second Pole in High-End Electronic Fabric
Asahi Kasei is the second largest supplier of high-end electronic fabric in Japan after Nittobo, together with Nittobo, accounting for more than 70% of the global high-end electronic fabric market share. It also faces the problem of slow capacity expansion, with extremely limited new supply.
③ Owens Corning (OC) and NEC Glass (NEG): Strategic Retreat of Roving Giants
Both Owens Corning (USA) and NEC Glass (Japan) are among the world's top six fiberglass companies, but their strategies have become more conservative in recent years. In 2025, Owens Corning sold part of its fiberglass business to a subsidiary of India's Praana Group. In contrast, the continued expansion of Chinese companies contrasts sharply with the strategic retreat of overseas leaders.
4.3 Domestic Manufacturers: Three Strong Roving Companies Remain Stable
① China Jushi: Global Fiberglass Leader
China Jushi is the world's largest fiberglass producer, with a 23% global market share in electronic fiberglass. This will increase to approximately 28% after the Huai'an base goes into operation.
In 2025, sales of fiberglass roving and products reached 3.2026 million tons, and sales of electronic cloth reached 1.062 billion meters, both record highs. Annual revenue reached RMB 18.881 billion (+19.08%), and net profit attributable to shareholders reached RMB 3.285 billion (+34.38%). In the first quarter of 2026, revenue reached RMB 5.282 billion (+17.93%), and net profit attributable to the parent company was RMB 1.267 billion (+73.48%). Profit growth far exceeded revenue growth, with the year-on-year increase in the average price of roving and electronic fabric being the core driving force.
In the high-end sector, China Jushi's self-developed low-dielectric yarn has passed NVIDIA certification, demonstrating its technological strength with the endorsement of core customers in the industry chain.
② Sinoma Science & Technology/Taishan Fiberglass: A Game Changer in T-Fabric
Taishan Fiberglass, a subsidiary of Sinoma Science & Technology, was the first domestic company to break Nittobo's monopoly on T-fabric. Around 2024, Taishan Fiberglass's low-expansion coefficient glass fiber products successfully passed end-customer verification, driving a restructuring of the competitive landscape in the low-expansion fiber fabric market.
Currently, besides Taishan Fiberglass, the main global suppliers of specialty fiber fabrics include only a few manufacturers such as Nittobo, Asahi Kasei, Taiwan Glass Group, and domestic companies like Honghe Technology, Guangyuan New Materials, and Feilihua.
③ International Composites: High Earnings Elasticity
International Composites' net profit attributable to shareholders nearly doubled year-on-year in 2025, and surged 412.94% year-on-year in the first quarter of 2026, demonstrating the most outstanding earnings elasticity in the sector. The company employs a dual-technology approach-crucible and pool furnace methods-in the field of low-dielectric electronic yarn, giving it a leading edge in this high-end segment.
Furthermore, International Composites holds a leading market share in "hidden champion" products such as high-end insulating yarn, high-modulus optical cable water-blocking fiber yarn, and water treatment membrane shell yarn, which are applied in ultra-high voltage insulator manufacturing and optical cable reinforcing cores.
④ Honghe Technology: A Benchmark for Specialized, Refined, and Innovative Specialty Electronic Cloth
Honghe Technology is a leading global supplier of mid-to-high-end electronic-grade glass fiber cloth, specializing in ultra-thin cloth, super-thin cloth, and specialty electronic cloths with low dielectric and low thermal expansion coefficients.
Net profit increased by 785% year-on-year in 2025, and net profit attributable to shareholders increased by 354.22% year-on-year in the first quarter of 2026, demonstrating strong earnings growth.
The company's T-fiber cloth performance indicators have reached 2.9-3 ppm/℃, approaching the level of Nittobo, and are expected to break Nittobo's monopoly. Low dielectric products have passed certifications from customers such as Doosan Electronics, Taikwang Electronics, Panasonic Electronics, and Tai-Yao Technology, while low thermal expansion coefficient products have passed certifications from companies such as Lisennoco, Taikwang Electronics, Shengyi Technology, and Doosan Electronics. Mass production is expected to begin in 2025.
⑤ Feilihua: Quartz Cloth (Q-fiber Cloth) Dominates the Market
Feilihua is one of the few manufacturers globally with mass production capabilities for quartz glass fiber, and is also the leading supplier of quartz glass fiber for the domestic aerospace industry.
In the electronics field, the company has achieved vertical integration of the entire industry chain from quartz sand to quartz cloth. Quartz cloth, with its extremely low dielectric loss (Df < 0.001) and ultra-low CTE (approximately 0.5 ppm/℃), has become an ideal solution for 1.6T high-speed copper-clad laminates.
