Electronic fabric prices increase for the 4th time, inventory drops by over 40%, and supply decreases by 15%, with giants raking in over $400 million!

If You Missed It: AI Computing Power Leasing + AI Animation! [Taogu Ba]

Don’t Miss Out Again: The Mainline Tech Theme Running Through 2026—Electronic Fabric!

Electronic fabric enters its off-season in March but continues to rise in price and dance, with glass fiber giants repeatedly raising prices by about 0.5-0.6 yuan/meter;

Taiyao “breaks defenses,” reducing fabric production due to shortages, abandoning mid-to-low-end products, while high-end electronic fabric demand remains strong;

Ordinary CCL, with inventory at absolute lows, downstream stocking accelerates;

Multiple driving factors are acting simultaneously, and the supply-demand gap in the industry will continue to exist, so electronic fabric price increases in 2026 are expected to persist!!

1. Electronic Fabric: The Ironclad Armor of the AI Industry

1. Electronic fabric (electronic-grade glass fiber fabric) is a key structural material for copper-clad laminates, used to ensure the structural safety and signal transmission quality of the laminate.

Electronic fabric is made from electronic-grade glass fiber yarn through processes such as warping, sizing, weaving, and post-treatment to produce raw fabric; it is then immersed in adhesives composed of different resins, allowing the fabric to absorb resin fully and form semi-cured sheets; finally, it is hot-pressed with copper foil on one or both sides to form copper-clad laminates.

2. Electronic fabric serves two main functions:

1. Structural protection: Provides mechanical support, enhances structural strength and rigidity, and improves the stability of copper-clad laminates under high/low temperatures and strong acids/bases;

2. Dielectric performance optimization: Uneven fiber distribution at contact surfaces with copper foil can cause local dielectric constant differences, leading to signal reflection or loss, requiring precise weaving processes to ensure uniform fiber distribution.

3. Wide application of electronic fabric:

2. Continuous Price Increases of Electronic Fabric

1. Taiyao faces severe fabric shortages:

Taiyao announced yesterday: fabric shortages leading to reduced production, abandoning mid-to-low-end products!

Taiyao is a late-stage CCL company (downstream of electronic fabric). Its normal operation involves low-cost M4 and below products, with some small clients stopped supply. Now, Taiyao confirms fabric shortages through official notices, with more than one operation adjusting (reducing low-end production, maintaining supply for high-end clients).

This will lead to reduced output and supply contraction for ordinary CCL, creating room for price increases, and upstream electronic fabric prices will rise further; market fears that reduced production will weaken demand for electronic fabric are unfounded—low-end CCL companies are highly dispersed, and many orders are available from leading firms that do not participate.

2. Domestic industry leaders raise prices again:

On February 4, Guangyuan New Materials, International Refractory Materials, and other glass fiber leaders announced further price hikes for electronic fabric, with a significant increase—about 0.5-0.6 yuan/meter, at least over 10%! Additionally, both companies raised the price of electronic yarn G75 by 1,000 yuan/ton, with the new price reaching 10,550 yuan/ton. This round of price hikes marks the second in 2026 and the fourth since early 2025, with the largest increase and shortest cycle, indicating strong and sustained future price increases for electronic fabric!

Electronic fabric prices are very likely to rise again in March, considering a 10% increase each month in January-February 2026.

Prices could break 6 yuan/meter, even 7, possibly surpassing the 2021 high of 9 yuan/meter!

3. CTE fabric: Overseas BT material giants (downstream CTE customers) have explicitly stated that CTE prices increased by 20% in January 2026, and weekly quotes in Taiwan are trending upward.

3. Industry Inventory at Absolute Low Levels

Inventory is a leading indicator of cyclical prices!

Currently, CCL inventory is at an absolute low: electronic fabric at 13 days, Shengyi 7628 inventory at 7-10 days, PCB stockpiles increased from 1 month to 2 months. The same applies to CCL, which is about 20% below previous highs.

In January-February 2026, capacity utilization of traditional domestic electronic fabrics (models like 7628, 2116) dropped from 85% to 70%, reducing effective supply by about 15%. As of February 10, 7628 electronic fabric inventory days fell to 12 days, a 40% decrease from the same period last year, reaching the lowest level since 2023.

By the end of 2025, electronic fabric industry inventory was 25-30 days (with giant stones at about 30 days). Currently, industry inventory has fallen to 15 days, at an extremely low level, supporting price increases. Additionally, there is a serious shortage of AI base station weaving machines, with supply gaps expected to last half a year to a year, and supply-side constraints persisting. Since the industry adopts direct sales, stockpiles are almost negligible, and downstream customer inventories are also low, further reinforcing the sustainability of price increases;

In 2026, the net supply increase of ordinary electronic yarns is expected to be less than 10%. According to Zhuochuang Information, from 2023 to the first half of 2025, aside from some capacity replacements, no new production lines have been put into operation in the ordinary electronic yarn sector.

The main new capacities in 2026 will come from China Jushi Huai’an project (Phase 1: 50,000 tons expected to start in Q1; Phase 2: 50,000 tons planned for H2) and Jintao Qingyuan 7-line (70,000 tons expected to start in H2). However, considering that two kilns of International Refractory Materials will undergo shutdowns simultaneously, the actual net capacity increase is expected to be less than 10% of current operating capacity.

4. Beneficiary Companies and Business Flexibility

The recent price increase is expected to bring a net profit increase of about 0.5 yuan/meter, contributing approximately 440 million yuan, 110 million yuan, and 110 million yuan respectively to three core domestic companies;

1. XXX:

The company’s traditional business (coarse sand + wind power exports) has a profit scale of about 3.3-3.5 billion yuan, with a net profit per ton of over 900 yuan, comparable to the profit levels in Q3 and Q4 2025. The electronic fabric business had a profit of about 1.2-1.3 yuan/meter in January, which can be revised upward to 1.6-1.7 yuan/meter after the price increase; the profit scale as of February has been revised upward to 5.2-5.3 billion yuan, with potential to break 6 billion in Q2, and if reaching historical highs, profits could reach 8 billion.

Potential elasticity of coarse sand: current price increase expectations are not strong, and the market does not expect prices to fall.

a. Supply side: 2026 is a low year for glass fiber supply; after considering shutdowns for maintenance, the industry’s new supply addition is expected to be neutral at 200,000-400,000 tons, compared to an average annual increase of about 500,000 tons over the past three years; the significant increase in platinum-rhodium alloy prices (platinum at 1.5 times early 2025, rhodium powder at 2 times) raises production costs, reducing industry expansion willingness, possibly leading to early shutdowns and surplus metal sales.

b. Demand side: relatively resilient, with industry and Jushi maintaining about 5% growth from 2023-2025.

2. XXX:

In 2026, exports of electronic fabric are expected to reach 250 million meters, coarse sand exports 60,000-70,000 tons. If electronic fabric profits increase and coarse sand prices rise by 700-800 yuan/ton, this could bring nearly 200 million yuan in profit elasticity;

Additionally, the AI electronic fabric business has clear PE elasticity, and after the Spring Festival 2026, it may become a direction with clear elasticity, with the market giving positive feedback on the company’s special glass fiber progress; the company previously achieved a breakthrough in models like 7628 electronic fabric, shipping 300-400 million meters in 2020-2021, reaching 1.034 billion meters in 2025, nearly tripling the volume.

Summary: AI animation is not just a “supplement” to the content industry but a “substitute”—just as short videos replaced long videos, AI animation will replace traditional low-to-mid-cost animation and some short dramas, with a substitution space exceeding 50% over the next three years.

In 2026, whoever masters the “IP + tools + computing power” triangle will hold the switch to the AI animation printing press! Who do you think it is?

Do you recognize the industry’s explosive potential? Where is the value? Where are the opportunities?

Summary:

The current round of electronic fabric price increases are driven by supply constraints and demand growth.

Under the influence of AI servers, high-speed network equipment, and other infrastructure construction, demand for electronic fabric continues to rise;

However, due to high investment costs and strong technological barriers, capacity expansion is limited.

Do you, in front of your screen, recognize the explosive potential of the electronic fabric industry? Where is the value? Where are the opportunities?

Like + share + comment: Electronic fabric prices keep rising, which giant has the most explosive potential?