Panasonic recently announced it will stop producing a key electronics material, its E-glass based laminates.
This decision reflects a massive shift happening deep within the electronics supply chain, all driven by the artificial intelligence (AI) boom. High-performance AI servers require components that can handle data at incredible speeds. This has created a surge in demand for advanced, low-Dk (low dielectric constant) materials. In response, upstream suppliers of glass cloth—the fabric-like core of circuit boards—are reallocating their production capacity away from traditional materials like E-glass to focus on these new, more profitable alternatives.
The causal chain leading to Panasonic's decision is quite clear. First, the explosive growth in AI created a technical need for materials that don't slow down electrical signals. Second, Nittobo, the dominant global supplier of high-end glass cloth, began shifting its production to meet this demand. This created a scarcity of the older E-glass cloth, leading to a series of price hikes starting in late 2025. Third, facing a tightening supply and rising costs for a legacy product, CCL makers like Panasonic saw the writing on the wall. When competitors like Resonac announced drastic price increases of over 30% in early March 2026, it confirmed that the E-glass market was no longer sustainable.
For companies that use these Panasonic materials to build printed circuit boards (PCBs), this is a significant challenge. They now have a very short window—until March 31, 2026—to place their final orders. Even then, there's a risk that Panasonic won't be able to fulfill all orders if demand exceeds its remaining supply of E-glass cloth. This forces them to quickly find and approve alternative materials.
Unfortunately, switching materials isn't as simple as just paying more for a different product. Moving from an E-glass base to a low-Dk one changes the electrical properties of the circuit board. This requires engineers to redesign their products and go through a lengthy and expensive re-qualification process to ensure everything still works reliably. This is a clear example of how the AI revolution is reshaping even the most fundamental layers of the technology supply chain, forcing an industry-wide evolution.
- Glossary:
- E-glass: A standard, general-purpose type of fiberglass used for decades as a reinforcement material in PCBs. It's cost-effective but has electrical properties that are less suitable for very high-speed applications.
- Copper Clad Laminate (CCL): The base material for a printed circuit board. It's a rigid sheet, typically made of woven glass fabric and resin, with a thin layer of copper foil bonded to one or both sides.
- Low-Dk: Stands for 'low dielectric constant'. Materials with a low Dk allow electrical signals to travel faster and with less signal loss, which is critical for high-frequency applications like AI accelerators and servers.