The supply chain for artificial intelligence has a new front opening up. This time, it’s not about GPUs, HBM memory, or the electrical capacity of data centers, but about a much less visible material to the general public: low-expansion glass cloth, known in the industry as low-CTE glass cloth or T-glass. According to Nikkei, Asahi Kasei is preparing to enter this segment, a move that directly targets one of the most sensitive bottlenecks in advanced semiconductor packaging for AI.
This news is noteworthy for two reasons. First, because this material is critical in the substrates used for advanced chip encapsulation, helping to control deformation caused by heat and ensuring mechanical stability in increasingly dense designs. Second, Nitto Boseki, known as Nittobo, currently holds a very dominant position in this niche: various market sources, supported by Goldman Sachs analysis and industry publications, estimate its share at around 90% of the global market for low-expansion glass cloth for semiconductor substrates.
This dominance has not arisen by chance. Nittobo has been positioning its T-glass as an essential material for semiconductor encapsulation substrates in high-performance chips for years. In its corporate documentation, the company states that this high-elasticity, low-expansion glass is key to meeting the demands of substrates used in servers, communications, and advanced chips—roles that have become even more important with the rise of generative AI and advanced packaging.
A discreet material but decisive for advanced packaging
Although discussions about semiconductors often focus on manufacturing nodes or AI accelerators, advanced encapsulation has become a strategic aspect of the business. As chips integrate more components and operate under higher thermal demands, the substrate they are mounted on needs to provide greater stability, less deformation, and better performance against temperature changes. That’s where low-CTE glass cloth comes into play.
In August 2025, Nittobo formally acknowledged that the adoption of advanced packaging for AI semiconductors was significantly boosting demand for its T-glass. The company noted that this material had been recognized as an effective solution for issues like thermal expansion and warpage in logic advanced encapsulation substrates, and approved an investment of approximately 15 billion yen to expand capacity in Fukushima. If this entire expansion is dedicated to T-glass for logic devices, production could nearly triple current levels.
That announcement already hinted at how tense the market was becoming. If a company that dominates such a specialized niche needs to massively expand its capacity—and admits that the investment might still fall short of meeting total demand—the conclusion is clear: AI is also stressing the foundational materials of advanced electronics.
Asahi Kasei’s move indicates a market under pressure
In this context, Asahi Kasei’s entry doesn’t seem like a minor move. The Japanese company isn’t coming from outside the sector. In its official catalog, Asahi Kasei already presents itself as a top-tier supplier of glass fabric for printed circuit boards and encapsulation substrates, emphasizing that it is one of the global leaders in ultrathin glass fabrics for compact devices like smartphones and tablets. Furthermore, its 2025 annual report lists glass fabric among its leading products, positioning itself as a key player in the low-dielectric-constant glass fabric market.
This means their move into low-CTE glass cloth builds on an already established industrial and commercial base in electronics materials. The difference now is that, according to Nikkei, the company aims to enter the segment that has so far been almost solely associated with Nittobo. If product capability and capacity growth are confirmed, the market could begin to gain an alternative in a part of the supply chain where current concentration increasingly concerns chipmakers, substrate manufacturers, and advanced electronics producers.
However, an important nuance should be noted. As of now, there has been no official, detailed announcement from Asahi Kasei comparable to the one Nittobo made regarding its expansion plans. The information about Asahi Kasei’s entry into low-CTE glass cloth comes from Nikkei and industry publications that have reported on this move. From a journalistic perspective, this means treating the news as reported by reputable financial and technological outlets, but not yet as a fully documented product launch by the company itself.
Why it matters to the AI industry
The significance of this news goes beyond the competition between two Japanese groups. What’s at stake is the resilience of a supply chain dependent on very specific materials, produced by a very limited number of players, with high entry barriers. By 2026, the narrative around AI will go beyond just software or large models. It will also hinge on whether the industry can secure interposers, substrates, thermal components, technical glass, and specialized materials that enable the assembly of increasingly complex chips without compromising performance or reliability.
In this context, Asahi Kasei’s potential entry into low-CTE glass cloth can be seen as a background signal: AI’s race is reorganizing industrial markets that until recently operated mainly within technical circles. Japan, which maintains strong positions in advanced materials, is again emerging as a key player in a battle not only fought in semiconductor factories but also in the less visible layers of its supply chain.
Frequently Asked Questions
What is low-CTE glass cloth and how is it used in AI chips?
It’s a low-thermal-expansion glass fabric used in encapsulation substrates and other advanced electronic applications. Its function is to help reduce deformation caused by heat and improve stability in high-performance semiconductors.
Why is this material gaining attention now in the semiconductor sector?
Because the rise of AI and advanced packaging has sharply increased the demand for materials capable of withstanding higher temperatures, greater integration densities, and increased reliability requirements in substrates and boards. Nittobo officially recognized this demand increase in 2025.
What is Nitto Boseki’s position in this market?
Industry sources and market analyses place Nittobo with a share close to 90% in low-expansion thermal glass fabric for semiconductor substrates, making it the dominant player in the segment.
Has Asahi Kasei officially confirmed its entry into low-CTE glass cloth?
So far, the move has been reported by Nikkei and industry publications. Asahi Kasei confirms on its website and corporate communications that it already manufactures glass fabric for electronic substrates and plates, but has not yet issued a detailed announcement comparable to Nittobo’s expansion plan.
via: nikkei