Why is the price of fiberglass rising?
What is fiberglass? Fiberglass is a high-performance inorganic non-metallic material with many varieties. Its advantages include excellent insulation, strong heat resistance, good corrosion resistance, and high mechanical strength. Glass fiber is manufactured from raw materials such as pyrophyllite, kaolin, limestone, and quartz sand through processes including high-temperature melting, drawing, drying, and winding. Its single filament diameter ranges from a few micrometers to over twenty micrometers, equivalent to 1/20 to 1/5 the diameter of a human hair. Simply put, glass fiber is "super-fine glass fiber" drawn from glass, many times thinner than a human hair.
Glass fiber can be classified according to its alkali content into alkali-free glass fiber (E glass fiber), medium-alkali glass fiber (C glass fiber), and high-alkali glass fiber. E glass fiber is the absolute mainstream, accounting for over 95% of the industry's production. According to its application, it can be divided into electronic-grade glass fiber and industrial-grade glass fiber. Electronic-grade fiberglass products mainly include electronic yarn and electronic cloth, used in printed circuit boards (PCBs), copper-clad laminates (CCLs), and high-frequency, high-speed materials, belonging to high-end fiberglass. Electronic-grade fiberglass is categorized into first, second, and third generation fabrics. First-generation fabrics are primarily based on traditional E-fiber, offering strong versatility and used in general PCBs and consumer electronics. Second-generation fabrics are low-dielectric-low-loss (Low-Dk/Df) fiberglass cloths, with significantly better dielectric constant and loss than first-generation fabrics, resulting in more stable signal transmission. They are used in mid-to-high-end PCBs, mid-to-high-end servers, 5G/6G base stations, automotive electronics, etc. The lower the dielectric constant (Dk), the faster the electrical signal travels; the lower the dielectric loss (Df), the less signal loss and the lower the heat generation. Third-generation fabrics are ultra-low Dk/Df quartz fiberglass cloths, also called Q (Quartz) cloths, used in high-frequency, high-speed communication, AI servers, high-frequency radio frequency, and high-end packaging substrates, making them a core material for current high-end electronic substrates. Industrial-grade fiberglass products include roving, chopped strands, surface mats, woven fabrics, unidirectional fabrics, and glass wool, used in wind turbine blades, building materials, automobiles, and pipelines. Based on glass composition, industrial-grade fiberglass is further divided into E (Electronic) glass, the most mainstream; C (Chemical) glass, with good acid resistance, used in chemical pipelines and storage tanks; S (High-Strength)/R (Reinforcement) glass, used in aerospace, high-pressure gas cylinders, and high-end wind power; and HM (High Modulus) glass, used in large wind turbine blades.
The global fiberglass industry is highly concentrated, forming a clear oligopoly. China Jushi, Taishan Fiberglass, International Composites, Owens Corning (OC), NEC Glass (NEG), and Shandong Fiberglass account for approximately 70% of the global fiberglass production capacity. Among them, China Jushi, Taishan Fiberglass, and International Composites, these three major fiberglass manufacturers account for approximately 70% of the domestic fiberglass production capacity.
Fiberglass Applications and Their Proportions: The main application areas of fiberglass and their percentages are as follows: infrastructure and building materials 25%, transportation 24%, electronics and electrical engineering 18%, energy and environmental protection 14%, consumer goods 8%, and others 11% (marine industry, aerospace, medical, etc.). These include relatively cyclical application areas (building materials, industrial equipment, etc.) as well as emerging application areas (automotive lightweighting, 5G, wind power, photovoltaics), thus the fiberglass industry possesses both "cyclical" and "growth" attributes.
In short, fiberglass is a strong and tough glass fiber made of stone, thinner than a human hair. It is monopolized by a few global giants and is used in traditional fields such as infrastructure and construction, as well as emerging sectors such as wind power, photovoltaics, and AI, combining stability and growth.
Why the Price Increase? Recently, fiberglass prices have continued to rise, even leading to shortages. This is primarily due to the combined effects of surging demand, rigid supply constraints, and rising costs, mirroring the price increases seen in memory chips.
On the demand side, explosive growth in the high-end sector is the core driver. AI servers are driving a surge in demand for high-end electronic fabrics, with the fiberglass usage per PCB unit being more than double that of ordinary servers. Simultaneously, the trend towards larger wind turbine blades and lightweighting in new energy vehicles is accelerating, further amplifying overall industry demand and creating a situation of "high-end shortage and traditional tight balance."
On the supply side, limited flexibility makes it difficult to match demand growth. Fiberglass manufacturers are proactively adjusting their product structure, shifting traditional production capacity to high-margin specialty fiberglass fabrics, leading to a contraction in the supply of ordinary electronic fabrics. Furthermore, the delivery cycle for core equipment in high-end electronic fabrics is as long as 18-24 months, making domestic substitution impossible in the short term. Coupled with low industry inventory levels, the supply-demand imbalance is prominent.
On the cost side, rigid pressures are forcing companies to raise prices. The price of core raw material platinum has surged, with auxiliary raw materials such as pyrophyllite also rising, significantly compressing profit margins. Price increases have become an inevitable choice for companies to maintain normal operations. In addition, the slowdown in industry capacity expansion further supported price increases.
