Electronic cloth achieves zero inventory for the first time in 20 years!

2026,05,27

Currently, the monthly shortage of electronic cloth in major domestic CCL factories has soared to 40-50 million meters; the monthly shortage for a single leading factory reaches 10 million meters; the inventory has remained at a level close to zero since the end of last year - orders are fulfilled and then immediately shipped out, and even some CCL factories have directly stood by the looms, pulling the cloth off the machine as soon as it is produced. The downstream CCL orders have reached 80% of those for June. The industry has maintained 1-2 months' worth of orders for 3-4 consecutive months, far exceeding the normal cycle of 7-10 days. It is expected that in June, the price of 728 electronic cloth will increase by 5 cents per meter, thin cloth by 7-8 cents per meter, and CCL will be uniformly raised by 10%. This is a level of tension that has never been seen in the 20-year history of the industry - in the 2021 round, there was still inventory to absorb, but in this round, there is no inventory at all. More importantly, AI is restructuring the entire CCL material system in an unprecedented way: the demand side has tripled the number of PCB layers, the supply side is monopolized by Toyota alone, and the value center has rapidly shifted from traditional thick cloth to high-end thin cloth priced at 30-40 yuan per meter.

Industrial information. Let's take a look here first.

The moonlight decreased by 50 million meters - for the first time in 20 years, there was no even a single piece of inventory left.

Currently, the monthly shortage of electronic cloth for large-scale CCL factories in China has reached 40-50 million meters; even a single leading factory has a monthly shortage of 10 million meters. The inventory has remained at a level close to zero since the end of last year - orders are fulfilled and then immediately removed, and even some CCL factories have been standing by at the looms, pulling the cloth off the loom and taking it away immediately. The downstream CCL orders have been scheduled up to 80% for June. The industry has maintained 1-2 months' worth of orders for three to four consecutive months, far exceeding the normal 7-10-day cycle. This is the first time in the 20-year history of the industry - in 2021, that round was somewhat tight, but there was still inventory to absorb; this round is a complete imbalance between supply and demand, and even the inventory buffer has been removed.

AI has tripled the number of PCB layers - the share of traditional 7628 type has dropped from 60% to 40%

The PCB layers of AI servers have reached 10 to 30, which is more than three times that of traditional computers or mobile phones (4 to 10 layers). The amount of electronic fabric required for the same chip has increased several times. Even more severely, the supply side - ultra-thin fabrics such as 1080 and 2116 - have been completely consumed by AI demand, squeezing the production capacity of traditional 7628 thick fabrics. The proportion of 7628 in the production of electronic fabrics has dropped from 60% in the past to over 40%. Leading high-end CCL factories have switched to produce high-end products like Ma8 and Ma9, and traditional materials are basically not receiving orders. The next wave of risks is more clear: if the future research direction relaxes the requirements for quartz fabrics and Ma8 and Ma9 switch to use first-generation and second-generation fabrics, traditional fabrics will suffer a second blow.

The loom was completely shut down by Toyota - the production halt will be postponed until the second quarter of 2027.

The expansion project is stuck at the narrowest bottleneck - the loom. The supply of looms is basically monopolized by Toyota Automatic Looms, with an annual production capacity of less than 2,000 units and no expansion plans in place; other suppliers like Jin Tianju have a very small market share. The expansion of the CCL process is also hindered by increasingly strict environmental pollution permit approvals. Jieshi's 50,000-ton capacity was ignited in May, but it will take 2-3 months after ignition to actually start producing fabric; the earliest shipment is in June-July, with a monthly increase of only 10 million meters; Jiantao's 70,000-ton capacity will be ignited in July and won't start producing fabric until September. Experts have clearly determined that even if both expansions are fully implemented, there will be no sign of the shortage being alleviated until 2026, and the problem won't be truly resolved until the looms return in the second quarter of 2027.

The unit price of thin fabric ranges from 30 to 40 yuan per meter - the value center is accelerating its upward movement.

The unit price of traditional 7628 fabric is less than 10 yuan per meter, and even at its peak in 21 years, it only reached 8.5-9 yuan per meter. However, the unit price of the first and second generation thin fabrics (used in the high-end AI products of Model 8 and Model 9) is 30-40 yuan per meter, which is 5-10 times that of ordinary fabrics. If the demand for AI continues to increase and the requirements for quartz fabric/cob cloth in Model 8 and Model 9 are relaxed to those of the first and second generation fabrics, this gap will become even more exaggerated, with higher unit prices and greater profits. Manufacturers mainly engaged in fabric production have the greatest flexibility - for the same loom, the marginal value of switching to produce the first and second generation fabrics is more than five times that of the ordinary 728 fabric. This is a typical structure where the bottleneck is tightening and the value is rising.

1. This round of shortage of electronic components vs. the round in 2021-202

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