GTHT has released a research report maintaining an "Overweight" rating on the fiberglass industry. Leading copper-clad laminate (CCL) manufacturers are collectively vying for a larger share of the high-end market by 2026, driving an upward revision in the procurement framework for special electronic fabrics. Meanwhile, traditional electronic fabrics continue to see strong pricing momentum due to production shifts in weaving machines. The supply shortage for thin fabrics is particularly pronounced. The report recommends focusing on leading companies in both special and conventional electronic fabrics that demonstrate breakthroughs with marginal clients or cost advantages in production capacity. Key insights from GTHT include:
1. **High-End CCL "Order Competition Season" Spurs Procurement Framework Revision** The high-end CCL sector has entered a new "order competition season," targeting greater market share in ASIC and Nvidia supply chains by 2026. For instance, demand for Google’s TPU-driven ASICs is accelerating, with potential upgrades to M8-grade CCLs for its eighth-generation products by 2026. Similarly, Nvidia’s Rubin series is expected to boost demand for high-frequency, high-speed materials, further pushing upgrades to M8/M9-grade CCLs. This year-end procurement framework revision mirrors the industry’s M9 supply chain push in July 2025, where CCL players collectively raised procurement targets to secure material supply and demonstrate supply chain resilience to key clients.
2. **Market Focus Shifts to Second-Generation Low-Dielectric Fabrics** Industry attention has centered on second-generation fabrics, driven by: - Google’s TPU next-gen products likely adopting M8-grade CCLs paired with second-gen fabrics, creating incremental demand. - Nvidia’s supply chain showing steady uptake of second-gen fabrics. Procurement frameworks of top CCL players—including Shengyi Technology (expanding clientele), Taiwan Union Technology (scaling ASIC chain volumes), and Panasonic (leveraging client upgrades)—are under close watch. First-gen fabrics face a more stable 2026 supply outlook, while quartz fabrics (representing industry trends) await clearer signals on scalability, processability, and cost optimization.
3. **"Crowding-Out Effect" Widens Supply-Demand Gap; Conventional Fabric Prices Rise** Data shows early-December price hikes for fiberglass electronic fabrics: thick fabrics (7628) up RMB 0.2/sq.m and thin fabrics up RMB 0.3–0.5/sq.m. Three factors underpin the rally: - Limited industry capacity expansion in recent years. - AI demand boosting thin fabric (e.g., 1080-type) usage alongside specialty fabrics. - Production shifts to higher-margin specialty and thin fabrics, which require more loom time, squeezing capacity for conventional fabrics. The resulting supply-demand gap suggests thin fabric inventories remain low, with minimal net capacity additions expected in 2026, indicating further price upside.
**Risks**: Slower-than-expected AI demand growth; shifts in electronic fabric capacity dynamics.
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