Apple is presently contending with a major deficit of glass cloth, a vital element in the fabrication of chip substrates for its gadgets, especially iPhones. This deficit is anticipated to continue until at least the latter half of 2027, resulting in a bottleneck for the firm’s supply chain and production efficiency.
Glass cloth fiber is preferred for its dimensional accuracy, rigidity, and capacity to enable rapid data transmission, rendering it an indispensable material in the creation of printed circuit boards (PCBs) and chip substrates. The leading supplier of advanced glass cloth is Nitto Boseki, a Japanese firm that manufactures almost all of the high-grade varieties necessary for technology leaders.
The appetite for glass cloth has surged due to the AI surge, with enterprises like Nvidia, Google, and Amazon also pursuing this material for their AI chips. This heightened competition has triggered a supply shortfall similar to the recent memory chip crisis, elevating prices and complicating procurement efforts for Apple and others in the sector.
In light of the shortage, Apple, alongside AMD and Nvidia, has dispatched teams to Japan to negotiate with Nittobo for extra supplies, yet these attempts have seen limited success. The company is also considering alternative suppliers, including a smaller Chinese producer, Grace Fabric Technology, and is collaborating with Mitsubishi Gas Chemical to enhance the quality of materials from these new sources.
Despite the interest from new market entrants, such as Taiwan Glass and Taishan Fiberglass, the technological challenges in producing high-quality glass cloth are considerable. The fibers must be extremely thin, perfectly rounded, and devoid of bubbles, which makes it challenging for newcomers to fulfill the strict quality standards of major tech firms.
Qualcomm, another significant player in the mobile chip arena, is also impacted by the glass cloth deficit, with no immediate remedies in sight. The ongoing supply challenges present a considerable obstacle for the tech sector, as companies endeavor to sustain production levels amid rising demand for cutting-edge electronic devices.
