With high-end electronic fabrics in short supply, why is fiberglass becoming the toughest track in AI?

I. Overall Industry Landscape

 

Fiberglass is a core substrate of inorganic non-metallic new materials, exhibiting a global oligopoly, with China holding absolute dominance (accounting for over 70% of production capacity).

 

• Global Landscape: The top five companies (CR5) account for over 62% of the market share. China Jushi (22.1%) ranks first globally, followed by Owens Corning (13.8%), Nitto Boshoku (8.7%), Nippon Sheet Glass (7.2%), and Sinoma Science & Technology (Taishan Fiberglass, 13%).

 

• Domestic Landscape: A dominant player with several strong competitors, the top three companies (CR3) exceed 70%. China Jushi (32.48%) firmly holds the leading position, followed by Sinoma Science & Technology (Taishan Fiberglass, 15.68%) and Chongqing International (14.75%).

 

• Core Barriers: Heavy asset investment (approximately RMB 100 million per 10,000 tons of production capacity), high technology (tank furnace, formulation, spinneret, etc.), and high environmental protection thresholds.

 

II. Current Industry Status

 

1. Supply, Demand, and Cycle

 

• Supply Side: Domestic total capacity will exceed 8.7 million tons in 2025, with leading companies controlling production and eliminating outdated capacity.

 

• Demand Side: Traditional infrastructure/building materials maintain a stable foundation, while the three emerging sectors of electronics, wind power, and new energy vehicles are experiencing explosive growth. The industry is recovering from the bottom of the cycle, with both volume and price increasing from 2024-2026.

 

• Profitability: The industry bottomed out in 2023 (gross profit margin approximately 22%), but by 2025, leading companies' gross profit margins are expected to rebound to 30%-35%, with high-value-added products such as electronic fabric exceeding 40%.

 

2. Core Challenges

 

• Homogeneous competition in the low-to-mid-end market; reliance on imports for high-end products;

 

• Dependence on imported raw materials such as high-purity quartz sand exceeds 40%, resulting in a fragile supply chain;

 

• Significant pressure to reduce carbon emissions necessitates upgrading to green production capacity.

 

III. Major Sectors and Changes

 

1. Roving: Primarily driven by increased demand in construction, pipelines, and transportation; production capacity is stabilizing, prices are rebounding, and there is a trend towards higher modulus and higher strength. Wind power and automotive lightweighting are driving demand.

 

2. Electronic Grade Fiberglass: A core substrate for PCBs/copper clad laminates; AI is driving the explosive growth of high-end products such as Low-Dk and Low-CTE; there is a large supply gap, prices are soaring, and order backlogs exceed 9 months.

 

3. Wind Power Fiberglass: Larger blades are driving demand for high-modulus fiberglass; global installations are growing rapidly, and the penetration rate of E8/E9 high-modulus fiberglass is increasing rapidly.

 

4. Thermoplastic Fiberglass: A core material for lightweighting in new energy vehicles; usage per vehicle continues to increase, with an annual growth rate exceeding 25%, and it is penetrating from interior components to structural parts.

 

5. Specialty Fiberglass: Used in aerospace, military, photovoltaics, etc.; gross profit margin exceeds 50%; domestic substitution is accelerating.

 

IV. Development Direction

 

1. High-end: Focusing on electronic cloth, high-modulus wind power yarn, thermoplastic fiberglass, and specialty fiberglass.

 

2. Green Development: Zero-carbon furnaces, waste heat recovery, and low-carbon formulations will reduce carbon emissions per unit by 15% by 2030 compared to 2020.

 

3. Globalization: Overseas factories (Egypt, USA, Europe) circumvent trade barriers; overseas revenue accounts for over 30% of China Jushi's total revenue.

 

4. Intelligentization: Digital factories and intelligent manufacturing reduce costs and increase efficiency.

 

5. Supply Chain Collaboration: Vertical integration of fiberglass + wind power, fiberglass + automobiles, and fiberglass + electronics.

 

V. Recent Core Reasons for the Surge (AI + New Energy Dual-Engine Drive)

 

1. Explosive Growth in AI Computing Power (Strongest Catalyst)

 

• AI server PCB usage is 3-5 times that of traditional PCBs; Low-Dk low-dielectric electronic cloth is in high demand and has extremely high technological barriers; coupled with NVIDIA's new chip architecture, this further drives up demand for specialty electronic yarns/cloths.

 

• High-end electronic fabric is in short supply, and prices are soaring.

 

2. New energy sector drives overall growth.

 

• Wind power: Large-scale production and high installed capacity growth lead to a surge in demand for high-modulus fiberglass, becoming a stable foundation.

 

• New energy vehicles: Lightweighting is a necessity, leading to rapid growth in thermoplastic fiberglass production.

 

• Photovoltaics/energy storage: Demand for composite material brackets and enclosures is increasing.

 

3. Cyclical recovery + supply optimization.

 

• After a two-year downturn, prices bottomed out and began to rebound in 2024.

 

• Policies are eliminating outdated production capacity, increasing market concentration, and strengthening the pricing power of leading companies.

 

VI. Core Leaders: China Jushi vs. Sinoma Science & Technology

 

(I) China Jushi (600176) – The Absolute Global Leader in Fiberglass

 

• Positioning: Focused on the entire fiberglass industry chain, with the world's largest production capacity (over 1.5 million tons) and a market share of 22.1%.

 

• Business structure: Roving (60%), electronic fabric (25%, the world's largest), wind power yarn (10%), and specialty fiberglass (5%). • Core Advantages

 

a. Scale and Cost: Production capacity more than twice that of Sinoma, unit cost more than 500 RMB/ton lower;

 

b. High-end Products: E9 ultra-high modulus fiberglass (100GPa, globally leading), low-dielectric electronic cloth certified by NVIDIA;

 

c. Globalization: Bases in Egypt and the United States, overseas revenue over 30%, strong resistance to trade risks;

 

d. Green and Intelligent: Zero-carbon base in Huai'an, intelligent manufacturing, leading in cost and ESG.

 

• 2025 Performance: Revenue of 18.881 billion RMB (+19.08%), net profit attributable to parent company of 3.285 billion RMB (+34.38%).

 

• Strategy: Focusing on fiberglass, driven by both electronic cloth and wind power yarn, expanding high-end production capacity. (II) Sinoma Science & Technology (002080) – A diversified materials platform, a dual leader in fiberglass and wind power.

 

• Positioning: Three main businesses – fiberglass (Taishan Fiberglass, capacity 1.4 million tons, 13% global market share), wind turbine blades (global duopoly, 40% market share), and lithium battery separators (domestic leader).

 

• Fiberglass business: Taishan Fiberglass is the second largest in China, with products covering roving, electronic cloth, wind power yarn, and specialty cloth.

 

• Core advantages:

a. Industrial synergy: Deep synergy between wind turbine blades and fiberglass; 100% self-supplied wind power yarn, gross profit margin 35%+;

b. High-end electronic cloth: The only domestic company covering all categories of low dielectric 1-3 generations, Q cloth, and Low-CTE, supplying in bulk to leading copper clad laminate companies;

 

c. Diversified layout: Wind power and lithium battery separators resonate, strong risk resistance, and high growth potential;

 

d. Comprehensive technology: Leading technology in high-modulus fiberglass (E8 grade, 95GPa) and specialty fibers.

 

• 2025 Performance: Fiberglass business net profit of approximately RMB 1.1 billion, overall net profit of RMB 1.818 billion.

 

• Strategy: High-end fiberglass + large-scale wind turbine blades + lithium battery separator capacity expansion, with synergistic growth across the three major business segments.