Tight for advanced package substrates. 3 of 4 warning signs are red, 1 is unknown. Confidence: medium.
Under every AI chip sits a package substrate, a small multi-layer board that connects the chip to the rest of the server. Demand and pricing support a capacity constraint in advanced substrates: Ibiden expects demand above industry supply "to continue," and its prices are firming.
The inputs differ. Glass cloth supply is improving for some buyers as new suppliers appear. Ajinomoto, the dominant insulating-film maker, says it has "no concerns about our current supply chain overall," so a film shortage isn't established. Server circuit boards need their own assessment.
Outlook: a dominant supplier isn't automatically a shortage. Track qualified output, comparable lead times and realized prices by material and product grade.
New here? Skip to Background below for the basics. Coming back? Start with What changed.
This month
October 2026 · Updated Oct 5 · Next update after Ibiden's Oct 29 results
What changed since last month
First reading. From next month this section leads with what moved and why.
Scorecard (advanced package substrates)
Warning sign | What we saw | Reading | Source |
Long waits | No current, comparable lead-time data for advanced substrates. In March, lead times for materials made with T-glass were reported to have stretched from 8–10 weeks to over 20. Since then Ibiden said glass cloth suppliers have increased. These aren't the same measurement, so the sign is unknown. | ⚪ Unknown | |
Orders above supply | Ibiden: "The situation where demand exceeds the industry supply capacity is expected to continue." Nearly all its plants run at full capacity. | 🔴 Yes | |
Prices going up | Ibiden attributes ¥26.5B of its revised full-year electronics operating-profit outlook to better pricing and product mix versus its previous forecast. That includes smaller planned price cuts, rising prices on some models and passing on material costs, so not all of it reflects scarcity. Nittobo says it has largely completed planned T-glass price increases. | 🔴 Yes | |
New capacity not enough | Management assessments, not measured deficits: Ibiden expects demand above industry supply to continue while it expands. Nittobo's president, as reported by Nikkei via TrendForce, says tripled T-glass capacity "will not be enough." | 🔴 Yes |
Score: 3 red, 0 green, 0 mixed, 1 unknown = 🟠 Tight. One sign is unknown, so confidence is medium. The two red forward-looking signs rest on management assessments rather than measured industry data.
Reading by stage
Stage | Reading | Why |
Advanced package substrates | Tight | Strongest direct evidence: Ibiden reports demand above supply, full plants and firmer pricing. |
T-glass (low-expansion glass cloth) | Tight, improving for some buyers | Nittobo dominates supply and warns demand outruns its expansion, but Ibiden now sees third and fourth suppliers and says its materials for this fiscal year are secured. |
ABF insulating film | Not established | Ajinomoto is dominant, but says it has "no concerns about our current supply chain overall" and expects to meet demand through 2030 with staged expansions. |
Server and networking circuit boards | Not established | TTM reports constraints in lower-complexity materials while its high-end supply "remained adequately supported." Not enough evidence for a shortage rating. |
Dates to watch
Oct 26: Amkor Q3 results. A large chip packager and substrate user. Watch comments on substrate supply and costs.
Oct 29: Ibiden half-year results. Watch whether demand still exceeds supply, realized pricing, and new-capacity decisions.
Nov 4 (expected): TTM Technologies Q3 results. Watch Data Center and Networking growth and whether material costs squeeze margins.
Nov 5: Nittobo half-year results. Watch T-glass capacity progress and any price changes.
"Expected" dates come from earnings calendars. The company hasn't announced them yet.
Status history
- Oct 2026: 🟠 Tight (3 red, 1 unknown), medium confidence. First reading.
Background
Reference. Updated when the facts change, not every month.
What it is
A chip can't plug straight into a server board. It sits on a package substrate: a small, very precise multi-layer board that spreads the chip's thousands of tiny connections out to a size the server board can use. AI chips need large substrates with many layers, and those must stay flat as they heat up.
The chain has separate stages, each with its own suppliers and its own supply picture:
- Insulating film (ABF): the build-up layers of high-performance substrates. Ajinomoto holds 95% or more of this high-performance segment.
- Low-expansion glass cloth (T-glass): woven glass fiber in the substrate core that limits warping with heat. Nittobo holds a reported share of about 90% of T-glass. Nittobo's other specialty cloths, such as low-dielectric-loss glass for circuit boards, are separate products.
- Finished substrates: the largest makers include Unimicron, Ibiden and Shinko.
- Server circuit boards (PCBs): larger boards connecting chips, memory and network parts, built from their own laminates and copper foil.
Where it sits: Film + glass cloth → package substrate → chip packaging (CoWoS at TSMC, or Amkor and others) → server circuit board → server
When something is short, two things happen. The seller can charge more and stays fully booked. The buyer waits or pays more. Same shortage, opposite effect on the stock.
Why can't they just build more?
- Few qualified suppliers. New material suppliers exist, but customers must test and approve them first.
- Bigger chips need more. Each new AI chip uses a larger substrate with more layers, so substrate demand grows faster than chip counts.
- Expansions are staged. Ibiden's first phase of about ¥220B, at Gama and other existing plants, starts production from fiscal 2027 within a roughly ¥500B plan through fiscal 2028. Nittobo targets tripled T-glass capacity by March 2029.
How big is it?
Measure | Number |
Ajinomoto share of high-performance substrate insulating film | 95% or more |
Nittobo share of T-glass (reported estimate) | About 90% |
Ibiden expansion | About ¥500B over fiscal 2026–2028. First phase about ¥220B, with production from fiscal 2027 |
Nittobo T-glass capacity target | 3 times March 2026 levels by March 2029; Taiwan capacity doubled by March 2028 |
Ajinomoto film plans | Staged increases through 2030; new plant planned for 2032 for later demand |
TTM Technologies Data Center and Networking (Q2 2026) | 40% of sales, up 91% year over year |
Who supplies whom
Direct customers are labeled where a company or filing confirms them. Others are reported relationships or downstream users.
Supplier | Sells to | Where it ends up |
Ajinomoto (film) | Reported customers: substrate makers including Ibiden, Unimicron, Kinsus, Samsung Electro-Mechanics, AT&S and Nan Ya PCB | Downstream users: AI accelerators and CPUs from NVIDIA, AMD and Intel, and custom chips for Google, Amazon and Microsoft |
Nittobo (T-glass) | Reported customers: laminate and substrate-material makers such as Mitsubishi Gas Chemical | Reported to be competing for its supply: NVIDIA, Google, Amazon, AMD, Qualcomm and Apple |
Ibiden (substrates) | Confirmed direct customer: NVIDIA, which names Ibiden as a substrate supplier in its annual report. Intel and AMD are reported customers | AI accelerators and server CPUs |
Who wins, who waits
The effects below are our interpretation, not company statements.
Company | Likely effect | Why |
Ibiden (4062.T) | Possible winner | A leading AI substrate maker with full plants and firmer pricing. Gains depend on pricing staying ahead of higher input costs, depreciation from its expansion, and execution. |
Unimicron (Taiwan: 3037) | Possible winner | One of the largest substrate makers. Reportedly raised substrate prices in 2026 and set record capital spending of NT$34B. Faces the same input-cost and expansion risks as Ibiden. |
Nittobo (3110.T) | Possible winner | Dominant T-glass supplier that has raised prices and is tripling capacity. New glass cloth suppliers are the main risk to its share and pricing. |
Ajinomoto (2802.T) | Possible winner | Dominant in high-performance substrate film with growing AI demand. Its CEO says it is prioritizing capacity over price increases, and a film shortage isn't established. Film is a small share of revenue, but revenue share alone understates its profit importance. |
TTM Technologies (TTMI) | Possible winner | US circuit-board maker. Data Center and Networking sales rose 91%, and non-GAAP gross margin rose to 21.9% from 20.9%. The open question is whether it keeps passing higher material costs on. |
Exposed | Their AI chips need the largest substrates. Firmer substrate prices raise their costs, and tight capacity can limit how many chips get packaged. | |
Exposed | Packages chips and uses substrates in the process. Higher substrate costs squeeze it unless passed on. |
The takeaway: the clearest constraint is in finished advanced substrates. Supplier concentration upstream is high, but concentration alone doesn't establish a shortage.
When does it end, and what could replace it?
- 2027: Ibiden's first expansion phase starts production. New glass cloth suppliers add volume as customers approve them.
- 2028–2030: Nittobo's Taiwan capacity doubles by March 2028 and total T-glass capacity triples by March 2029. Ajinomoto adds film capacity in stages through 2030.
- Glass-core substrates: these replace the conventional reinforced core with solid glass. They could change demand for core materials such as glass cloth, but don't automatically eliminate ABF or other build-up layers. Still early.
What could go wrong for this view
- New suppliers are approved faster. Ibiden already sees third and fourth glass cloth suppliers.
- AI chip demand slows. Substrate demand depends directly on AI chip volumes.
- Expansions land together. Several makers are adding capacity at once, which could ease the market after 2027.
How to read a change
Good easing
New capacity and approved suppliers lift qualified output, while AI chip orders keep growing.
Bad easing
Substrate makers report idle capacity or price cuts because AI chip customers cut orders.
What would change our view
- Gets tighter: comparable lead times lengthen, or substrate makers report allocation to customers.
- Gets easier (good): Ibiden or Unimicron say supply has caught up while demand still grows.
- Gets easier (bad): substrate makers cut prices because orders fall. A pause in price increases alone isn't easing, and a delayed expansion needs a stated reason before it signals weaker demand.
Past scorecards
Each month the previous scorecard moves here, newest first.
- None yet. October 2026 is the first reading.
Evidence and sources
Company statements
- Ibiden Q1 fiscal 2026 call (Aug 4, 2026): "The situation where demand exceeds the industry supply capacity is expected to continue"; nearly all plants at full capacity; "ASP and product mix will have a positive impact of JPY 26.5 billion" on full-year electronics operating profit versus the previous forecast, mostly ASP; "we didn't have to reduce the price throughout our negotiation"; "We are revising the ASP as we go every time we get a cost increase from our suppliers"; "For the revised plan for FY 2026... the sourcing has already been secured"; "there is a possibility that there would be a capacity constraint on the material supply side"; "third and fourth supplier is now visible for us." Transcript
- Ibiden capital plan (Feb 3, 2026): about ¥500B over fiscal 2026–2028; first phase about ¥220B for Gama and other existing plants; sequential operation and mass production from fiscal 2027. Notice
- Ajinomoto business briefing (Jun 30, 2026): "There are no concerns about our current supply chain overall" (slide 3); staged production increases through 2030 and a new plant planned for 2032 (slides 20–21); ABF demand "growing at a pace above expectations" (slide 15). Presentation
- Ajinomoto CEO (Jun 2026): expects to meet ABF demand until 2030; prioritizing capacity over price increases. GIGAZINE, Jun 15
- Nittobo results (Aug 5, 2026), as reported by Nikkei via TrendForce: President Hisanobu Hayashi, "even this expansion will not be enough"; capacity 3x March 2026 levels by March 2029, Taiwan doubled by March 2028; planned T-glass price increases largely completed. TrendForce
- TTM Technologies Q2 2026: sales $1.0B, up 37%; Data Center and Networking 40% of sales, up 91%; non-GAAP gross margin 21.9%, up 100 basis points; "supply constraints for lower-complexity materials," while higher-end supply "remained adequately supported." Release · Results summary · Call highlights
- NVIDIA annual report (fiscal 2023): "We purchase substrates from Ibiden Co. Ltd., Kinsus Interconnect Technology Corporation, and Unimicron Technology Corporation." 10-K
Press reports
- Ajinomoto to raise ABF film prices about 30% from Q3 2026, per Taiwanese substrate makers. Reported and not independently confirmed; Ajinomoto's CEO has since said it is prioritizing capacity over price increases. Digitimes, May 13
- Ajinomoto 95%+ share of high-performance ABF; Unimicron 2026 capital spending raised to a record NT$34B. Tom's Hardware, Sep 2026
- Nittobo about 90% of T-glass; downstream lead times from 8–10 to over 20 weeks. Tom's Hardware, Mar 9
- Unimicron substrate price increase as fiberglass shortage persists. Digitimes, Feb 26
- Reported Ajinomoto ABF customers (Ibiden, Unimicron, Kinsus, Samsung Electro-Mechanics, AT&S, Nan Ya PCB). Nikhs, Apr 8
- NVIDIA, Google, Amazon and Apple competing for Nittobo glass cloth. TrendForce, Feb 4 · Apple, NVIDIA, Google, Amazon, AMD and Qualcomm; Mitsubishi Gas Chemical relies on Nittobo cloth (Nikkei Asia via MacRumors, Jan 14)
- Ibiden customer base "led by NVIDIA, Intel and AMD." FundaAI
- Shortage spreading from CoWoS to substrates and packaging materials. TrendForce, Apr 30
- Dates: Ibiden IR calendar · Nittobo IR calendar · Amkor announcement · TTM estimate
- Where sources disagree: analysts forecast a growing substrate shortfall through 2028, but those are forecasts and aren't scored. Nittobo warns demand will outrun its expansion, while Ibiden says its own glass cloth sourcing has improved. A reported 30% ABF price increase conflicts with Ajinomoto's stated focus on capacity over price.
- What would sharpen this page: qualified substrate output, comparable lead times by material and grade, and realized pricing.
Words used on this page
- Package substrate: the small multi-layer board a chip sits on, connecting it to the server board.
- ABF (Ajinomoto Build-up Film): the insulating film used for the build-up layers of high-performance substrates.
- T-glass: a glass cloth that expands very little with heat, helping keep large substrates flat.
- Glass cloth: woven glass fiber used inside substrates and circuit boards. Different grades serve different needs.
- Build-up layers: the thin wiring and insulating layers stacked on a substrate's core.
- Glass-core substrate: a substrate whose core is a solid glass panel instead of a reinforced laminate.
- PCB (printed circuit board): the larger board that connects chips, memory and other parts in a server.
- Lead time: how long a buyer waits between ordering and delivery.
- ASP (average selling price) and product mix: profit changes from pricing and from selling more high-end products.
- Non-GAAP: company-adjusted figures that exclude some items required under standard accounting rules (GAAP).
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