Blaze Pascal

Why No Price Hike Despite a Severe Shortage? Why doesn't Nittobo raise prices to reap windfall profits? The AI server boom has triggered an explosion in global demand for high-end glass fiber materials. Yet even as the market tightens into deepening shortage, Nittobo (Nitto Boseki, 日東紡) has opted for a counterintuitive strategy. Management made clear that the company currently has no plans for further price increases on its low-CTE (low coefficient of thermal expansion) glass fabric (T-glass), emphasizing that at this stage it will focus on expanding capacity to "defend market share." According to Japanese media reports, Nittobo is a leading major supplier that commands the critical global supply of high-end low-thermal-expansion glass fiber. The company said it had initially planned to prioritize expanding low-Dk (low dielectric) glass fiber capacity, but as demand from AI servers and edge devices such as smartphones outpaced expectations, the supply-demand gap for low-thermal-expansion T-glass widened sharply. In response, it has decided to accelerate the pace of expansion, adding glass fabric production lines at its Fukushima site in Japan while also installing new glass melting furnace equipment in Taiwan. Nittobo noted that T-glass demand is currently expanding rapidly. Not only is demand for the "thick fabric" used in semiconductor packaging substrates for AI servers continuing to climb, but the growth rate of the "thin fabric" used in edge devices such as smartphones is exceeding initial expectations by an even wider margin. The company emphasized that it has reached an internal consensus to further scale up the relevant capital investment in order to meet the strong demand from both thick-fabric and thin-fabric customers simultaneously. Defending Market Share Over Short-Term Price Hikes On the future price trajectory that the market is watching closely, Nittobo management responded that it currently has no plans to make further price adjustments to either T-glass or low-dielectric glass, and will continue selling at the prices set at the start of this fiscal year. The company reiterated that its top priority at present is expanding capacity to meet customer demand, thereby cementing its leadership position in the high-end materials market. It added that, so long as its products remain competitive and market demand holds firm, it will not hesitate to commit to capacity expansion. Nittobo had previously announced that it would raise the capital expenditure (CapEx) budget in its FY2024–2027 medium-term management plan by a substantial 50%, from the originally planned ¥80 billion to ¥120 billion—a move intended to respond to product demand and shifts in the market environment. Glass fabric is a critical component of IC substrates and printed circuit boards (PCBs), serving as the most fundamental chip-reinforcement layer material in electronic devices. As advanced chip packaging imposes extremely stringent requirements on micro-scale deformation, T-glass—with its low-thermal-expansion properties—can effectively prevent package warpage, establishing itself as a core element in ensuring the stability of high-end computing.

Feels like there is mispricing in the EV sector. Worth watching who can repurpose EV power electronics for the 800V data center buildout.

We are going to see a huge shortage of microcontrollers soon

JUST IN: Japanese toilet maker TOTO announces pivot into AI chip components, stock soars +18%.

A striking sentence I read today: We don’t think power is the constraint for TSMC’s chip demand, at least for 2027, but ABF substrate and HBM supply are major gating factors. -Morgan Stanley

Mitsui kinzoku revised up its full-year guidance once again.