The AI supply chain battle has now spread to the furthest upstream. Following the shortage of T-glass fiberglass cloth, HVLP4 copper foil is emerging as the new bottleneck in 2026—with an estimated shortfall of 1,500 metric tons, expanding to 2,500 metric tons by 2027.
NVIDIA, in a rare move, has bypassed CCL manufacturers to directly secure capacity for copper foil and fiberglass cloth, while pressuring Google, AWS, and Meta Platforms to coordinate inventory stocking. The supply-demand imbalance is unlikely to ease in the near term, granting exceptional pricing power to the few suppliers controlling critical material capacity.
Demand for AI infrastructure continues to expand, and the high-end PCB supply chain is facing a new upstream bottleneck. Following T-glass fiberglass cloth, HVLP4 copper foil is emerging as the most critical supply constraint in the second half of 2026, with the market expecting a shortfall of 1,500 metric tons this year, widening further to 2,500 metric tons in 2027.
According to industry sources cited by Digitimes Asia, NVIDIA and its key customers are once again directly engaging in upstream material supply coordination to ensure that mass production and shipment schedules for next-generation AI servers remain unaffected.
$NVIDIA (NVDA.US)$Providing clearer order visibility to fiberglass cloth and copper foil suppliers and advancing direct consignment models to lock in key upstream capacity more than a year in advance.
This move signals that competition within the AI supply chain has extended beyond chips and substrates to even more upstream raw materials. NVIDIA-led customer groups are bypassing copper-clad laminate (CCL) manufacturers to engage directly with fiberglass cloth and copper foil suppliers, aiming to resolve bottlenecks before material shortages escalate into end-product shipment crises.
HVLP4 copper foil shortage intensifies; 2027 shortfall expected to widen to 2,500 metric tons
As mainstream AI servers and high-speed computing platforms rapidly transition from HVLP2 and HVLP3 to HVLP4, demand for the corresponding copper foil is surging sharply. According to market sources cited by Digitimes, the HVLP4 copper foil supply-demand gap is projected to reach 1,500 metric tons in 2026.
Although Mitsui Kinzoku and Taiwan-based Co-Tech Development are actively expanding production capacity, supply growth remains constrained by the high technical barriers and manufacturing complexity associated with very-low-profile copper foil, making it difficult to keep pace with AI-driven demand. The shortfall is expected to widen further to 2,500 metric tons in 2027.
HVLP4 copper foil is an ultra-low-profile copper foil and serves as a critical material enabling high-frequency, high-speed signal transmission. As demand for high-end CCL shifts from M6 to M7, M8, and even M9 specifications, requirements for copper foil quality are rising in tandem, yet the number of suppliers capable of mass production remains extremely limited.
NVIDIA bypasses CCL makers to gain direct control over upstream materials
Fiberglass cloth and copper foil suppliers have long resided in the 'upstream of the upstream' within the PCB supply chain, with material development and production planning historically led by CCL manufacturers such as Elite Material and Doosan Electronic Materials of South Korea,$Apple (AAPL.US)$、$NVIDIA (NVDA.US)$making it difficult for end customers to directly access this tier.
However, as supply constraints persist at the IC substrate and PCB levels, NVIDIA-led customer groups are reshaping this dynamic by establishing direct relationships with upstream material suppliers, bringing fiberglass cloth and copper foil under their own supply chain control. According to industry sources, NVIDIA is also exerting greater procurement pressure on U.S. cloud service providers, including$Alphabet-C (GOOG.US)$, AWS, and$Meta Platforms (META.US)$—to step up procurement efforts.
CCL suppliers have implemented a rare quota-based allocation system, requiring IC substrate and PCB manufacturers to take delivery strictly in line with actual usage, further underscoring the severity of upstream material shortages.
T-glass fabric is similarly in short supply, with a projected supply-demand gap exceeding 40% by 2026.
HVLP4 copper foil is not the only bottleneck. Supply of T-glass fabric used in IC substrates is also extremely tight. Japan’s Nittobo controls more than half of global capacity, while yield issues faced by new entrants such as Taiwan Glass have delayed deliveries, resulting in an estimated supply-demand gap of over 40% by 2026.
According to Digitimes, even by 2027, the T-glass supply-demand gap is still expected to remain as high as 25%, continuing to constrain capacity expansion for ABF substrates. In the high-end glass fabric segment, Low DK2 and T-glass are the primary shortage items, already triggering active price increases across the supply chain.
For investors, the dual bottlenecks in upstream materials mean that tightness in the AI server supply chain is unlikely to ease in the near term. A limited number of suppliers with HVLP4 copper foil and T-glass fabric capacity will continue to benefit from pricing power driven by this supply-demand imbalance.
Editor/melody