A "cloth" has been brought into the spotlight by AI! Institutions are optimistic about further price increases.

Driven by the explosive demand for AI, the supply of electronic glass fiber (electronic fabric) market is becoming increasingly tight. Some manufacturers told reporters that since Q4 last year, their sales prices have been continuously rising, and the industry generally implements a “price adjustment once a month.”

On the first trading day after the Spring Festival, the overall index of the glass fiber sector closed up 8.62%. Today, the sector continued its upward trend, with Philihua hitting the “20cm” limit up, Changhai Co., Ltd. rising as much as 14%, and Honghe Technology once up over 7%.

CITIC Securities believes that, similar to the storage super cycle, the supply and demand for special electronic fabrics remain tight. Driven by marginal profits, companies are motivated to continue producing special fabrics, leading to a continuous reduction in the capacity of 7628 electronic fabric weaving machines. From an investment return perspective, the price increase potential for 7628 electronic fabric could reach 8 yuan per meter.

Multiple Price Increases Already Implemented

Currently following a “once a month” adjustment schedule

As an investor, a reporter contacted the securities department of International Composites, who stated, “Current product prices are highly关注. The industry generally follows a monthly pricing model. This approach has been in place since the beginning of this year, with prices continuously fluctuating.”

Electronic fabric is woven from ultrafine electronic-grade glass fiber yarns. Its core application is as a key reinforcing substrate for manufacturing copper-clad laminates (CCL) and printed circuit boards (PCB).

Data from Zhuochuang Information shows that in October and December 2025, and January and February 2026, ordinary electronic fabrics have experienced four price hikes. The cycle of price increases has shortened from quarterly to monthly. According to Honghe Technology’s disclosed Q3 2025 operating data, the average selling price of electronic-grade glass fiber fabric rose from 3.74 yuan/m at the end of 2024 to 4.97 yuan/m, an increase of 33%.

An insider from China Jushi told reporters that the price of electronic fabric has been rising steadily since September last year, with particularly noticeable increases in the past two months, and the market is performing well. Although downstream manufacturers had stockpiled before the Spring Festival, sales remained strong after the holiday amid robust demand.

Regarding the main reasons for this round of price increases, China Jushi stated that multiple factors are at play: AI-driven low dielectric electronic fabric is占用 traditional electronic fabric capacity, combined with strong demand from new energy vehicles, a positive outlook for high-end demand, and industry trends toward thinner fabrics, all driving prices upward.

Staff from International Composites said that since Q4 last year, demand for thin and ultra-thin fabrics in the electronic sector has increased significantly. Both thin and ultra-thin fabrics, as well as thick fabrics, are produced using Toyota weaving machines, but there are significant differences in efficiency: thick fabrics require lower processing precision and are easier to produce, resulting in higher efficiency; thin and ultra-thin fabrics require finer yarns and more complex processes, leading to slower production speeds and lower machine efficiency.

“Driven by demand, the industry prioritizes producing ultra-thin fabrics, occupying a large portion of machine capacity. Meanwhile, Toyota is the only weaving machine supplier, with just over 2,000 units, creating a capacity bottleneck. After high-end products occupy machine resources, the available capacity for普通电子布 further decreases, which also pushes up prices for普通产品,” the staff said.

Regarding future price increase potential, International Composites added that electronic fabric prices have remained low in recent years, with a slow upward trend last year and a more明显 increase this year. It is currently difficult to accurately predict how high prices might go. Historically, the high point for electronic fabric prices has been just over 8 yuan/m. Whether prices can突破历史高点 remains uncertain, but based on current trends, there is still room for further increases.

Multiple institutions optimistic about exceeding expectations in price hikes

From disclosed announcements, driven by rapid demand growth, glass fiber companies are optimistic about their 2025 performance.

Honghe Technology expects net profit attributable to parent company in 2025 to be between 193 million and 226 million yuan, a year-on-year increase of 745% to 889%; net profit after deducting non-recurring gains and losses to be between 187 million and 219 million yuan, over 33 times higher than the previous year.

China National Materials Technology (CMTT) expects net profit attributable to parent in 2025 to be between 1.55 billion and 1.95 billion yuan, a year-on-year increase of 73.79% to 118.64%; net profit after deducting non-recurring gains and losses to grow by 173.76% to 251.97%. The company stated that the performance growth is mainly due to optimized product structure of glass fibers, rising prices year-over-year, and increased sales of wind turbine blades.

Looking ahead, the market is optimistic about the price surge driven by tight supply and demand.

Yangtze Securities believes that the demand explosion and capacity squeeze will drive a super cycle. This “super cycle” features strong demand rigidity and a long duration. The causes include: first, demand爆发, such as in storage chips and upstream strategic materials for PCBs (including electronic fabric and copper foil), benefiting from explosive growth in AI computing power; second, supply lag, leading to capacity squeeze, with limited production capacity shifting significantly toward high-value-added products.

Huatai Securities notes that the recent price increases are larger and the cycle shorter, reflecting that the shortage of electronic fabric is spreading from high-end to普通产品. Supply constraints for普通电子布 are significant, and a new price increase cycle may begin around 2026; high-end electronic fabrics, such as second-generation low dielectric and low thermal expansion products, will still face supply gaps in 2026 and may continue to see price hikes.

The price increase trend may also extend to other fields. Citigroup analysts predict that in 2026, electronic fabric prices could rise by 25% or more, potentially impacting end products like smartphones and laptops.

Shanghai Securities Graphical Explanation · Key Insights

(Article source: Shanghai Securities News)