A significant supply chain shift is underway, driven by the relentless advancement of AI technology.
The core of this story is NVIDIA's next-generation AI platform, Rubin, scheduled for mass production in the latter half of 2026. To unleash its full potential, Rubin requires a massive leap in data transfer speed. This is accelerating the industry's transition from 112G to 224G PAM4 networking technology, effectively doubling the data highway's capacity for AI servers. It’s like upgrading from a local road to a multi-lane superhighway overnight.
However, this speed upgrade presents a major technical challenge. First, at such high frequencies, electrical signals lose their integrity much faster, a phenomenon known as 'dielectric loss'. Second, the immense processing power generates significant heat, causing the circuit boards to expand and contract, which can disrupt the delicate signal paths. This makes the performance of the underlying printed circuit board (PCB) materials a critical bottleneck.
To overcome this, the industry needs new, advanced materials. This is where Low Dk (Low Dielectric Constant) and Low CTE (Low Coefficient of Thermal Expansion) materials come in. Specifically, high-performance Copper Clad Laminates (CCL) with Low Dk properties are needed to minimize signal loss. These laminates are reinforced with special glass fibers that have a Low CTE to ensure the board remains stable under extreme temperatures.
This surging demand is creating a supply squeeze. Taiwanese CCL giant Elite Material is seeing its top-tier products (M7/M8) face shortages and is fast-tracking its next-generation M9 material for an early launch in the third quarter of 2026. The situation is even more critical for the raw material: low-CTE 'T-glass' fiber, a market virtually monopolized by Japan's Nittobo. Despite Nittobo's efforts to expand capacity, the supply is expected to remain tight until at least 2027. This bottleneck gives significant pricing power to key players in the materials supply chain, from Nittobo to Taiwanese CCL and glass fiber manufacturers.
- CCL (Copper Clad Laminate): The base material of a printed circuit board, consisting of a laminate sheet with a thin layer of copper on one or both sides.
- Low Dk / Low CTE: 'Low Dk' (Dielectric Constant) refers to a material property that reduces electrical signal loss, crucial for high-speed data transfer. 'Low CTE' (Coefficient of Thermal Expansion) means the material expands and contracts very little with temperature changes, ensuring stability.
- 224G PAM4: A next-generation signaling technology that transmits 224 gigabits of data per second per electrical lane. PAM4 allows for more data to be sent over the same channel compared to older methods.