Taiwanese companies expand 5G fiberglass production capacity
The surge in global demand for AI infrastructure has driven a significant upgrade in PCB material specifications, but it has also exposed supply shortages of key upstream materials from Japanese suppliers, such as high-end glass fiber, HVLP4 copper foil, and coated drill bits. This poses a potential bottleneck for AI server shipments.
Regarding the demand for glass fiber with low thermal expansion coefficient and low dielectric constant, industry analysts point out that as ASIC server manufacturers expand their AI computing capacity in 2026, the supply-demand gap for this type of material is expected to widen further. This trend has accelerated the rise of alternative materials from Taiwan, potentially reshaping the market share landscape of the Taiwan-Japan supply chain.
Previously, a shortage of T-Glass from Nittobo, a leading Japanese glass fiber product manufacturer, severely disrupted the production schedules of downstream IC substrate manufacturers, leading to extended delivery cycles. However, this also created an opportunity for Taiwan Glass, which had already developed TS-Glass products years ago, enabling it to successfully enter Nvidia's supply chain.
Taiwan Glass stated that driven by AI-driven PCB demand, its existing low CTE and low Dk glass fiber production capacity is already operating at full capacity. With the commissioning of new kilns at the Taoyuan TT and Lukang TL plants in 2026, total production capacity is expected to increase by 40% to 50% compared to 2025, which will help alleviate supply pressure for AI customers. In addition to low CTE glass fiber, demand for first- and second-generation low Dk glass fiber is also continuously increasing.
In 2026, the monthly demand for first-generation low Dk glass fiber in the PCB supply chain will reach approximately 15 million square meters. Meanwhile, driven by AI-driven material upgrades, the adoption rate of second-generation low Dk glass fiber is continuously increasing, with a monthly demand of approximately 2.5 million square meters.
Major suppliers, including Nittobo, Asahi Kasei, Taiwan Glass, and Taishan Fiberglass in mainland China, had a total monthly production capacity of 5.5 million to 6 million square meters of low Dk glass fiber in 2025. Even with the release of new capacity in 2026, production may increase to 10 million square meters, but a significant supply-demand gap will still exist.
In response, Taiwan Glass recently announced an investment of NT$2.25 billion (approximately US$71.8 million) to build a TD yarn production line, aiming to increase its market share in the high-end electronic-grade glass fiber sector. The company's order visibility has now extended to 2027. With the expansion of low CTE and low Dk capacity by 2026, Taiwan Glass aims to become the second-largest supplier in this supply chain, targeting a market share of 40% to 50%.
Second-tier low Dk suppliers such as Fulltech Fiber Glass (FFG), as well as companies from mainland China such as Honghe Technology and DynaScan, are expected to become key strategic material sources in the AI field, gradually entering Nvidia's inventory supply system.