"AI Surge Elevates Electronic Cloth to Core Computing Material, Driving Prices and Demand"

Electronic Cloth Ignited by AI: From Supporting Material to Computing Power Foundation

Electronic cloth (electronic-grade glass fiber fabric) serves as the core reinforcing substrate for copper clad laminate (CCL) and ultimately enters printed circuit boards (PCBs). In the past, electronic cloth was mostly used as a supporting material. However, as AI servers have driven a dramatic leap in PCB requirements for layer count, signal speed, and stability, low-dielectric (Low-Dk) and ultra-low-loss electronic cloth has become a necessity, elevating it to a core foundational material for computing power and communication infrastructure.

Amid this demand boost, supply tightened and prices surged. Citing operational data disclosed by an industry leader, the average price of electronic-grade glass fiber cloth climbed consistently from 4.51 yuan/meter in Q1 2025 to 9.78 yuan/meter in Q1 2026, a YoY increase of 116.85%.

2026 Expansion Panorama: An "Electronic Cloth Arms Race"

Boosted by AI demand, publicly listed firms along the industry chain have intensively disclosed plans for electronic cloth project construction and capacity commissioning in 2026, with capital expenditure intensity reaching elevated levels in recent years. Based on publicly available information alone, the newly planned capacity of top-tier players is already considerable: an industry leader, whose electronic cloth sales reached 1.062 billion meters in 2025—ranking first in the industry—announced newly planned capacity of approximately 570 million meters in the past two months alone. Many enterprises are currently operating at full capacity and selling all output.

Glass Fiber Drawing and Pt-Rh Bushing

The birth of electronic fabric begins at an ultra-high temperature of approximately 1600°C: raw materials such as silica sand and pyrophyllite are melted into molten glass, which flows through an alloy bushing precisely formulated with platinum and rhodium, exiting from thousands of micron-sized nozzles. Under the traction of a high-speed drawing machine, it is drawn into glass fibers finer than human hair (down to 9 µm or below). This bushing is key to glass fiber production lines and the entry point for platinum demand:

• Irreplaceability: In a molten glass environment at 1300–1600°C, ordinary metals will rapidly oxidize, corrode, or even melt. Only Pt-Rh alloys combine high-temperature tolerance, resistance to molten glass erosion, and the ability to control temperature through electric heating.
• Permanent Consumable Attribute: The bushing continuously wears down under high-temperature scouring, with a life cycle of about 1–1.5 years (shorter for standard bushings; 12–18 months for dispersion-strengthened bushings), exhibiting a very strong repurchasing characteristic. In 2025, the total volume of in-service Pt-Rh bushings across the industry reached 85.7 mt, with over 10,000 bushings in operation.
• Capital Expenditure Threshold: For a 100kt-scale roving production line, the investment in Pt-Rh alloy alone has risen from approximately 200 million yuan to around 450 million yuan; for every 1 mt of electronic yarn produced, an investment of roughly 6,300–6,900 yuan in Pt-Rh bushings is required.
• Demand Volume: The global glass fiber industry's annual platinum demand is approximately 700,000 oz (about 21.8 mt); the circulation volume of platinum involved in the entire life cycle of China's bushings exceeds 3.5 million oz (about 109 mt). The annual feed volume of bushing manufacturers doubled over five years. In 2025, the global total of in-service Pt-Rh bushings was about 85.7 mt, with over 10,000 bushings in operation; bushing life cycle is about 1–1.5 years, requiring maintenance/replacement for over 10,000 units annually. China accounts for over 60% of global glass fiber capacity, making it the largest consumer market, corresponding to the majority share of the in-service stock being retained in domestic production lines.

Overall, electronic fabric has become another clear platinum demand growth sector after hydrogen energy. Pt-Rh alloy bushings used in glass fiber tank furnaces constitute the core consumable. Building a new production line requires a significant one-time initial feed, and continuous volatilization losses occur during production, constituting a persistent net consumption. The current AI-driven capacity expansion of high-end PCBs is lifting both volume and price of electronic fabrics, spurring accelerated rollout of ultra-thin and low-dielectric specialty fabric capacities. This, in turn, is driving both new purchases of platinum bushings and higher losses during full-capacity production, providing marginal growth for platinum's industrial demand. In terms of scale, overall demand from the glass fiber sector remains smaller than that from auto catalysts, but its high cyclical elasticity and strong linkage to the AI industry chain make it a structural growth point in platinum demand that cannot be ignored. Platinum pricing is currently still largely determined by macro factors, mine supply, and auto catalyst demand, while electronic fabrics largely amplify the supply-demand tight balance expectations at the margin.