There is a global shortage of high-end fiberglass cloth. Huang Renxun personally went to Japanese companies to buy it.

According to Nikkei Shimbun,The global demand for AI chips continues to explode, which has triggered a supply shortage of its key basic material, high-end glass fiber cloth. This special fiberglass cloth is the core material for manufacturing AI chip carrier boards and high-speed printed circuit boards (PCBs), which directly affects the signal transmission speed and stability of the chip.Currently, technology giants such as Apple, Nvidia, Google, Amazon, and Microsoft are competing fiercely for this.

To ensure stable supply,NVIDIA CEO Jensen Huang has recently personally visited Nittobo, the leading supplier in this field.

The manufacturing process of fiberglass cloth is extremely demanding, requiring melt spinning at a high temperature of approximately 1,300°C. The equipment requires the use of expensive platinum, and has near-perfect requirements for the fineness, roundness and bubble-free nature of the fiber.

AI chips and high-end processors have extremely high requirements for the stability and speed of data transmission, and must rely on special specifications of low-expansion coefficient (Low CTE) high-end glass fiber cloth (also known as "T-glass"). It has the characteristics of dimensional stability, high rigidity, and is conducive to high-speed signal transmission. It is an indispensable material to support current advanced packaging technologies (such as TSMC's CoWoS) and HBM memory integration.

Currently, there are three main manufacturers in the world that can produce this type of Low CTE fiberglass cloth: Nittobo of Japan, Taiwan Glass of Taiwan, and Taishan Fiberglass of mainland China. Among them, Nittobo occupies more than 90% of the global market share and is the only supplier that can meet Nvidia's most stringent quality requirements, so it has an absolutely dominant position in the supply chain.

Nittobo's business also extends to low dielectric constant (Low DK) fiberglass cloth required for AI servers (market share is about 80%), as well as more advanced NER glass fiber cloth for 800G switches (market share 100%).However, in the face of the surge in global AI demand, its production capacity has been severely stretched, and it has been out of stock since early 2025. The situation is very similar to the DRAM chip shortage since the second half of last year.

Industry insiders predict that the tight supply situation may not be substantially alleviated until Nittobo's new production capacity is put into operation in 2027. To cope with the bottleneck, Nvidia has begun looking for Taiwanese glass as an alternative supplier.

However, since the fiberglass cloth is buried deep inside the carrier board, it cannot be reworked once there is a quality problem. Therefore, most chip manufacturers are extremely cautious about changing suppliers.