China Galaxy Securities stated in a research report that due to high technical barriers in production, the number of global suppliers of specialty fiberglass fabric remains limited, leading to a supply shortage and continuously rising prices. Although fiberglass manufacturers are accelerating capacity expansion plans in 2025, the release of new capacity will experience a lag. Combined with sustained strong demand from AI computing needs, the tight supply of specialty fiberglass fabric is expected to persist. Looking ahead, robust demand from AI computing will continue to support tight availability of high-end specialty fiberglass fabric, which in turn will constrain the supply of traditional electronic fabric. Against this backdrop of limited supply, traditional fabric is entering a price increase cycle, and the entire electronic fiberglass industry chain is experiencing an upward trend.
The main views of China Galaxy Securities are as follows:
Event: On February 11, 2026, the fiberglass manufacturing sector rose by 10.45%, with several companies including International Composite Materials, Sinoma Science & Technology, Honghe Technology, Zaisheng Technology, China Jushi, and Shandong Fiberglass hitting the daily price limit.
AI computing demand is driving rapid growth in the need for specialty fiberglass fabric, and this strong momentum is expected to continue. Electronic information technology is advancing toward higher frequency, speed, and integration. Rapid technological iterations in end products such as AI servers, 5G base stations, and data center switches are increasing requirements for signal transmission speed and stability, directly driving upgrades in copper-clad laminate performance. Electronic fabric, used as a reinforcing material in copper-clad laminates, is seeing surging market demand for specialty fiberglass fabric with low dielectric constant (Low-dk), low dielectric loss (Low-df), and low coefficient of thermal expansion (Low-CTE), fueled by explosive growth in AI computing needs. Due to high production technology barriers, the number of global suppliers of specialty fiberglass fabric is scarce, resulting in a supply-demand gap and steadily increasing prices. While fiberglass manufacturers are accelerating capacity expansion in 2025, the time lag in bringing new capacity online, coupled with persistent strong demand from AI computing, suggests that the tight supply of specialty fiberglass fabric will continue.
Production shifts lead to tight supply of traditional electronic fabric, driving price increases as the sector enters an upward cycle. Due to the shortage of specialty fiberglass fabric, manufacturers are adjusting their product mix to pursue higher profits, shifting capacity from traditional electronic fabric to specialty fiberglass fabric. This has created a supply gap for traditional electronic fabric as well. On February 4, 2026, Guangyuan New Materials and International Composite Materials raised their quotes for electronic yarn and electronic fabric, with the market price for traditional 7628 electronic fabric increasing by 0.5–0.6 yuan per meter, a significantly larger hike than previous adjustments. China Galaxy Securities believes this price increase is mainly driven by two factors: supply tightness due to production shifts, and overall rises in PCB raw material costs following increases in copper foil prices. Going forward, strong AI computing demand will continue to support tight supply of high-end specialty fiberglass fabric, further squeezing capacity for traditional electronic fabric. In this context of supply constraints, traditional fabric is entering a price hike cycle, and the entire electronic fiberglass industry chain is witnessing rising prosperity.
Fiberglass companies reported strong performance in 2025, with industry profits expected to continue recovering. Recently, several fiberglass companies, including Sinoma Science & Technology, Honghe Technology, International Composite Materials, and Shandong Fiberglass, released their 2025 performance forecasts. Among them, Sinoma Science & Technology estimated a year-on-year increase in net profit attributable to shareholders of 173.76%–251.97%, while Honghe Technology projected growth of 745%–889%. The significant performance improvement for both companies is largely attributable to higher volumes and prices for electronic fabric driven by AI demand. Additionally, International Composite Materials is expected to turn a profit in 2025, and Shandong Fiberglass is forecast to reduce losses, indicating an overall profit recovery trend in the fiberglass industry. Looking ahead, with sustained strong demand from AI computing, electronic fabric prices are expected to rise further, supporting continued profit recovery in the sector. Fiberglass companies with advantages in capacity layout and cost control are likely to benefit substantially.
In terms of investment targets, two directions are recommended: 1) Continued high prosperity in specialty fiberglass fabric due to booming AI demand and accelerated domestic substitution, with prices expected to keep rising. Companies with production technology for specialty fiberglass products may exhibit significant earnings elasticity. Recommended关注: Sinoma Science & Technology (002080.SZ) and Honghe Technology (603256.SH). 2) Tight supply of traditional electronic fabric due to production shifts, leading to sustained price increases and potential profit recovery for companies. Recommended关注: China Jushi (600176.SH), which has scale and cost advantages in traditional electronic fabric production.
Risk warnings include potential fluctuations in raw material prices exceeding expectations, weaker-than-expected downstream demand, and faster-than-expected capacity expansion.
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