Fiberglass in the sights of AI: scarcity, prices, and hidden power

The race for artificial intelligence is putting immense pressure on the technology supply chain, and one of the most critical points has a name: high-precision fiberglass used in chips and circuits . What was a relatively unremarkable material just a few years ago has become a strategic resource capable of influencing product launches, multi-million dollar investments, and even the industrial policies of several countries.

Behind this special fiber, very different from that found in insulation or surfboards, are a handful of Japanese and Chinese companies, but above all, one undisputed protagonist: Nitto Boseki (Nittobo), the almost exclusive supplier of what's known as T-glass or glass cloth . The demand unleashed by AI chips from NVIDIA , Google , Amazon, and other giants is stretching their capacity to the limit and opening the door to price increases, delays, and a new global bottleneck similar to the one experienced with RAM.

From two Japanese weavers to an invisible pillar of the chip era

Just over a century ago, two Japanese textile companies, Fukushima Boseki Co., Ltd. and Katakura Seishi Iwashiro Bosekisho, decided to join forces to create what we know today as Nitto Boseki Co., Ltd., or simply Nittobo, the discreet giant that weaves the "fabric" on which modern chips rest . What began as a textile business gradually evolved into advanced materials, especially those related to glass.

Over the decades, the Japanese firm moved away from traditional textiles and into the manufacture of technical fibers. In 1938, almost simultaneously with Owens Corning Fiber Glass in the United States, Nittobo became one of the first companies in the world to produce fiberglass on an industrial scale , opening up a vast field of industrial and electronic applications that would eventually become critical.

The major technological leap came in 1969, when the company first developed an extremely fine and uniform glass fabric, known as glass cloth. This material began to be used as the base for the printed circuit boards (PCBs) that make up virtually every electronic device . The key was achieving a stable, heat-resistant fabric with very specific physical properties to withstand increasingly demanding manufacturing processes.

Back in 1984, Nittobo launched its famous T-glass, an evolution of that fiberglass fabric that took performance a step further. It wasn't your typical construction or leisure fiberglass, but an ultra-thin fabric with a very low coefficient of thermal expansion, designed to serve as a substrate for advanced chips . This property is essential: when a chip heats up and cools down rapidly, any difference in expansion between layers can generate stress, failures, and even breakage.

Thanks to its dimensional stability and exceptional quality, Nittobo's T-glass gradually found its way into the products of major technology companies. Apple was one of the first to adopt this glass as a base material for key components of its iPhones , and over time other giants in the mobile and semiconductor sectors have followed suit.

What makes T-glass fiberglass so special

Although it may appear to be a simple rigid plastic at first glance, the T-glass or glass cloth used in the manufacture of chip substrates is actually a material of tremendous sophistication. Each filament of this fiber must be thinner than a human hair, perfectly round, and free of bubbles . Any microscopic imperfection can result in a serious failure in the final chip.

The primary function of this glass fabric is to serve as a "skeleton" for the substrates on which chips are mounted and for many circuit boards. Therefore, in addition to its strength and purity, it stands out for its extremely low coefficient of thermal expansion and a rigidity that ensures stability even at very high temperatures . This prevents the structure from deforming when the chip is operating at peak performance.

Another key feature is its ability to facilitate very high-speed data transmission . An unstable substrate or one with micro-defects can cause interference, electrical noise, or signal delays—unacceptable in high-performance processors, data center chips, or GPUs designed for AI, where every nanosecond counts.

This type of high-quality fiberglass is not an interchangeable commodity. Leading chip manufacturers, from those producing mobile processors to those developing AI solutions, rely almost entirely on a type of T-glass that only a few suppliers can manufacture to the required standards . This concentration of supply is therefore a major concern for the entire industry.

In this context, the Japanese company Nittobo has become the dominant player in the production of the most advanced fiberglass used in chip substrates . Other firms, such as the Chinese company Grace Fabric Technology or the Japanese company Unitika, are trying to compete, but currently they still lag behind in both scale and consistency of quality, making large chip manufacturers very reluctant to change suppliers.

The AI ​​explosion: everyone wants the same fiberglass

The rise of artificial intelligence has completely changed the priorities of the technology sector. From training massive models to real-time inference, AI requires colossal amounts of computing power and memory . This translates into an unprecedented demand for GPUs, specialized CPUs, accelerators, and, by extension, all the materials involved in their manufacture.

Companies like NVIDIA, Google, and Amazon Web Services have seen a surge in orders for AI-specific chips. Each new generation of GPUs for data centers comes with large contracts for the supply of substrates and advanced components , among which T-glass is absolutely central. The result is fierce competition to secure as much of Nittobo's production capacity as possible.

Before the AI ​​boom, mobile market giants like Apple and Qualcomm rarely had trouble securing this fiberglass. Their consumption was high, but Nittobo's production could easily meet the demand. However, the arrival of AI superchips radically changed the balance , leaving many players competing for a limited resource.

RAM and NAND flash memory have been the first serious warning: the strong demand for training AI models has led to sharp price increases and a lack of availability for other segments . Something very similar is happening with T-glass: the bulk of the capacity is being diverted to the highest-paying customers with the largest demand, namely, the large AI-focused companies.

The consequences are felt throughout the entire supply chain. Consumer electronics manufacturers, from smartphones to laptops and other devices, fear being sidelined in the bidding for high-quality fiberglass. When this key material is sold to the highest bidder, the margins and bargaining power of companies with more competitively priced products suffer , and their sales forecasts may be affected.

A global bottleneck with a 2026 date

Semiconductor industry experts warn that a shortage of high-quality fiberglass could become one of the biggest bottlenecks in the tech industry by 2026. The situation is reminiscent of the post-pandemic chip crisis, but in this case, the focus is on a specific material with very few suppliers.

Nittobo acknowledges that, at least in the short term, the situation is practically at a standstill. According to the Asian business press, a company executive even stated that "if we don't have additional capacity, we don't have it, no matter how much pressure is put on Nittobo ." This is a polite way of saying that the factories are simply operating at their limit and it's impossible to create more output out of thin air.

The Japanese company has plans to increase its capacity, but this increase won't happen immediately. Expansion projects and new facilities require substantial investments, permits, and, above all, time to bring extremely complex production lines online . It appears that a significant boost to supply will only become clear in the second half of 2027.

This timeline aligns with other market pressures. Companies like SK Hynix have warned that the RAM shortage could persist until at least 2028. The convergence of two bottlenecks—memory and high-precision fiberglass—could lead to a prolonged period of high prices, delayed product launches, and extreme customer prioritization.

The shortage of this material doesn't just affect consumer hardware. Sectors like telecommunications, banking, and energy are increasingly reliant on data center infrastructure and cloud services, which also require advanced chips and large quantities of fiber . Several analysts suggest that if the situation persists, hardware and cloud service costs could rise significantly starting in 2026, impacting the digital economy as a whole.

Apple, Qualcomm and glass diplomacy

One of the most striking consequences of this silent crisis is the direct involvement of governments and top executives to secure supplies. Apple, which has used Nittobo's T-glass components in its iPhones for several generations, has sent executives to Japan to negotiate face-to-face with the supplier and representatives of the Japanese government.

Apple's concerns aren't limited to current models. The company has particularly sensitive products on the horizon, such as its highly anticipated foldable iPhone and future devices with even more intensive use of AI and advanced connectivity. Any restrictions on access to high-quality fiberglass could disrupt their launch schedules , something that, in a company of this size, means billions of dollars are at stake.

Qualcomm, for its part, has also found itself caught in this bottleneck. Known for its Snapdragon processors for mobile phones and other connected devices, the American company has tried to diversify its supply. It has approached Unitika, a smaller Japanese fiberglass manufacturer , in search of an alternative to Nittobo, but so far has not found a solution capable of handling the volume it needs.

The problem for both companies—and for many other chip manufacturers—is that the quality required of T-glass for advanced substrates is so high that a manufacturing defect can ruin entire batches of components . It's not simply a matter of "trying" another supplier: the risks to performance, reliability , and reputation are enormous.

Analysts like Chiu Shih-fang of the Taiwan Institute of Economic Research emphasize that the stability of T-glass is crucial for the final quality of the substrates . If even a customer the size of Apple encounters limitations, smaller manufacturers risk being relegated to the sidelines, with much more restricted access or prohibitive prices.

Nittobo, maximum caution to avoid repeating history

The obvious question is why Nittobo doesn't simply increase its capacity to capitalize on this strong demand. The answer lies in the recent history of other markets, such as DRAM and NAND memory , which experienced a cycle of overproduction, plummeting prices, and significant losses for manufacturers in 2022.

Following those events, many Japanese companies in the materials and electronics sectors have become particularly conservative. Nittobo doesn't want to fall into the temptation of over-engineering its factories and then being left with overflowing warehouses if demand normalizes or if competitors emerge with alternative technologies. The message is clear: they will grow, but slowly and cautiously.

Nittobo's CEO, Hiroyuki Tada, has publicly admitted that "it's inevitable that we'll lose some market share" and that there's a limit to the level of risk a relatively small company can accept . In other words, the company prefers to cede some ground rather than embark on uncontrolled expansion that could backfire.

This stance, understandable from a business perspective, nevertheless fuels market tension. Large buyers of fiber for AI, with extremely high margins (NVIDIA, for example), can afford to pay more and sign long-term contracts, securing the bulk of current capacity. Consumer electronics manufacturers, with tighter margins, are left in a much more precarious position and must seek alternatives, which are still in their early stages.

Meanwhile, China and Taiwan are emerging as potential sources of new suppliers. Apple and Qualcomm, among others, are already working on diversification strategies toward Chinese and Taiwanese companies capable of producing advanced fiberglass . But the necessary leap in quality is significant, and the industry knows that a mistake at this stage cannot be fixed with a simple software patch.

Corning: the other major player in glass in the AI ​​era

Although Nittobo is receiving media attention due to the T-glass bottleneck, it's not the only glass giant benefiting from the rise of AI. The American company Corning, with nearly 175 years of history and headquartered in a small town in upstate New York, has established itself as a key player on multiple fronts related to glass, ceramics, and optical communications.

Corning has been achieving technological milestones for over a century. It manufactured Edison's glass envelopes in 1879, launched Pyrex tough glass in 1915, developed a large mirror for the Hale telescope in 1948, and, as early as 1962, produced the first hardened safety windshield for automobiles , designed to break into small fragments and reduce injuries in accidents.

In 2007, a name crossed their path that would change everything: Steve Jobs. The Apple co-founder was looking for a particularly resistant glass for the screen of the first iPhone, fearing that breakage would ruin the user experience. Corning responded brilliantly, and from that collaboration, Gorilla Glass was born, the family of hardened glass that today equips millions of mobile phones, smartwatches, and tablets worldwide.

But Corning's contribution to the digital age goes far beyond screens. In 1970, the company developed a low-loss optical fiber capable of transmitting data over long distances , laying the foundation for modern communications networks. Its cabling solutions, such as Edge and Edge8, are widely used in data centers, the true physical heart of the cloud and AI.

The arrival of artificial intelligence has further elevated the importance of this business. A state-of-the-art data center dedicated to AI can require up to 180.000 kilometers of internal fiber optic cable , a distance equivalent to circling the Earth more than four times. In a high-density, high-speed market, Corning's technological expertise has allowed it to position itself as a preferred supplier for many major technology companies.

Corning, AI and the future of data centers

In the race for AI, Corning is not just selling cabling and fiber. The company is involved in developing new optical interconnect solutions for next-generation data center architectures , where photonic integration is increasingly relevant for reducing power consumption and latency.

One example is their participation in Broadcom's CPO (Co-Packaged Optics) program. In addition to classic optical connectors, Corning has developed new FAU (Fiber Array Unit) products with higher density and tighter bend radii , optimized for high-capacity multiplexing systems and data center transceivers. Although they appear to be passive and discreet components, they conceal a level of precision and industrial processing that reflects their long tradition in advanced glass.

Among the technical advantages of these solutions are increases of nearly 35% in fiber density for the same width, 50% reductions in the height of certain modules thanks to tighter bend radii, and excellent core alignment tolerance for designs with very high fiber counts . All of this contributes to building more compact, efficient data centers capable of handling the massive data flows typical of AI.

The market context supports this strategy. Microsoft, Google, and other cloud giants have announced investment plans of tens of billions of dollars in data centers , many of them directly driven by the needs of generative AI and related services. Microsoft, for example, has tied part of its investment to its partnership with OpenAI , while Google has stated capital spending expectations heavily focused on data infrastructure.

Corning, as a supplier of essential materials and components, benefits from this long-term investment cycle. Unlike low-cost competitors that compete on price and volume, the company has chosen to focus on technological differentiation and becoming a key partner to major equipment manufacturers and data center operators , thereby securing its position in the AI ​​value chain.

In addition to optical communications and Gorilla Glass, Corning maintains other strategic lines of business in environmental technologies, specialty materials, and life sciences. It supplies components for solar energy, space, and military applications , including ceramic radomes for missiles, designed to avoid disrupting radar signals and withstand extreme thermal changes, further reinforcing its profile as a critical supplier in a wide range of fields.

Economic impact: rising prices and risk of a “technological freeze”

The combination of explosive demand for AI and a limited supply of key materials and components is creating a global "technology freeze ." Large companies are competing to reserve capacity several years in advance, and suppliers with differentiated technologies—such as Nittobo in T-glass or Corning in advanced optical fiber—are gaining considerable bargaining power.

For countries like Spain, this situation is not a distant concern. Telecommunications operators, banks, electricity companies, and large corporations depend on data centers, fiber optic networks , and cloud services whose costs could skyrocket if hardware prices continue to rise due to material shortages. Delays in advanced digitization projects or applied AI deployments could translate into a loss of competitiveness.

Some experts predict that, if current tensions persist, hardware and cloud service prices will rise significantly from 2026 onwards . This would affect both large corporations and SMEs that outsource their IT infrastructure, and ultimately the end user, who would see these costs reflected in more expensive products and services.

Faced with this scenario, supply chain actors are seeking diversification: more suppliers, more production regions, and, in some cases, new materials or architectures that reduce dependence on certain critical components . However, the speed at which AI is advancing and the technical complexity of the materials involved make it very difficult to achieve a balance in the short term.

Within this complex landscape, established companies like Corning have demonstrated remarkable resilience. With nearly 60.000 employees and five major business divisions, the company has achieved significant growth in optical communications sales and a stock market performance far exceeding that of indices like the S&P 500 or the EuroStoxx 50, fueled precisely by the wave of investment in AI and data centers.

The story of Nittobo and Corning illustrates the extent to which the artificial intelligence revolution relies heavily on seemingly modest materials like fiberglass and engineering glass . The ability to produce them with the required purity, stability, and precision has become a decisive factor that can accelerate or hinder the adoption of AI worldwide, influencing prices, timelines, and the very strategies of major technology companies.