Nvidia 2.5x Substrate Expansion: Nittobo T-Glass, Ajinomoto ABF Exposure

Nvidia said on 21 October 2026 that it plans to raise package-substrate capacity for its products 2.5x over the next three years. [1][2] That Nvidia substrate expansion could lift demand for two materials inside every AI substrate that each have one dominant supplier: Nittobo's T-glass cloth and Ajinomoto's ABF film.

What Nvidia announced

Nvidia is providing a multibillion-dollar capacity reservation advance to support IBIDEN's Ono Plant in Japan, where the expansion targets capacity of 3x current levels. [1] Amkor, Kinsus, Samsung Electro-Mechanics, SPIL and Unimicron are also part of the expansion. [3] Samsung Electro-Mechanics is a new entrant to Nvidia's substrate supply chain and can supply immediately from existing Korean factories. [4]

The release named neither Nittobo nor Ajinomoto, and it came out after the Tokyo market had closed. [1]

Background: what goes into an AI chip substrate

An AI chip is first mounted on a package substrate. The substrate works like an adapter board: it fans the chip's dense contacts out into coarser wiring that connects to the server board. Bigger AI chips need bigger substrates with more layers.

Two materials matter most. The first is the glass-fiber cloth in the substrate core. When a chip heats up, a mismatch between how much the chip and the substrate expand can crack the solder joints, so high-end substrates use a low-expansion cloth known as T-glass. Japan's Nittobo is close to the only supplier. [5]

The second is ABF, an insulating film that substrate makers use to build up wiring layer by layer on the core. Ajinomoto, which started out making MSG, holds more than 95% of the global ABF market. [6]

Both materials were tight before this announcement. Nvidia, Microsoft, Google and Amazon have already booked most of Nittobo's premium glass cloth capacity for this year. [5] On 2 September, Unimicron's chairman said ABF substrate capacity is extremely tight because AI needs larger, more complex substrates. [7]

How substrate capacity flows to Japan's two material makers

First, Nvidia uses prepayments to lock in new substrate capacity. Unimicron's new line is expected to start between Q2 2027 and mid-2028, and IBIDEN's Ono plant is expected to ramp in Q1 2028. [1]

Second, 2.5x over three years works out to about 36% growth a year. More and larger substrates need roughly proportionally more glass cloth and ABF film.

Third, because both inputs were already tight, substrate capacity funded by Nvidia could become firmer multi-year volume for the material makers.

Fourth, the gain would reach the two companies' profits, but both say they do not plan further price increases. Nittobo plans no further T-glass price hikes, and Ajinomoto said there is currently no need to raise ABF prices. [5][8] Growth would therefore come from volume, capped by each company's own capacity plan.

Companies that could be affected

Nittobo (3110.T) makes glass-fiber products; its Electronic Materials unit produces T-glass cloth, the substrate-core input in this chain.

Electronic Materials carries most of the company's profit. Nittobo raised the unit's operating profit target for the fiscal year ending March 2027 from JPY 26.0 billion to JPY 28.0 billion, up 44% year over year, against a company-wide operating profit target of JPY 30 billion. [5] The unit's JPY 77.8 billion revenue target is about 55% of company revenue guidance; how much of it comes from package substrates is not disclosed. [5]

Nittobo expects capacity to reach three times the current level by the fiscal year ending March 2029. [5] If substrate-grade cloth volume grows about 36% a year at flat prices, Electronic Materials operating profit could rise by JPY 8-10 billion a year. That is an estimate from the materials above, not company guidance.

Nittobo could benefit, depending on whether new capacity arrives on time and whether low-expansion cloth from rivals such as Nan Ya qualifies.

Nittobo closed at JPY 3,040 on 21 October, after JPY 2,912 the previous session; its April monthly close was JPY 5,708. [9]

Ajinomoto (2802.T) is a Japanese food group and the main supplier of ABF film, the build-up input in this chain.

Its ABF-centered Functional Materials segment earned JPY 54.6 billion, up 35% year over year, 30% of group operating profit, at a margin above 50%, while electronic materials sales were only JPY 100.7 billion, about 6% of revenue. [6] On its 6 August call, the company said demand for ABF for AI servers and networks remained robust. [8]

Assuming ABF for AI substrates grows about 30% a year at flat prices, Functional Materials profit could rise by about JPY 15-16 billion a year, roughly 8-9% of group business profit. Nvidia's share of ABF demand is not disclosed, so the growth rate is an assumption.

Ajinomoto could benefit, depending on whether existing capacity keeps up; its new plant is planned for 2032. [6]

Ajinomoto closed at JPY 5,278 on 21 October, after JPY 5,230 the previous session. [9]

What to watch

Near term, watch Tokyo trading on 22 and 23 October, the first two sessions after the release.

In early November, both companies report results for the half ending September 2026. For Nittobo, watch Electronic Materials profit against the JPY 28.0 billion target and any faster expansion or long-term take-or-pay contracts. For Ajinomoto, watch Functional Materials sales growth and any pull-forward of ABF capacity.

Volume will not show until 2027, and the full step-up waits for the Ono plant ramp in Q1 2028.

The chain would break if:

• Nvidia's substrates move to a design that needs less material per unit, such as a glass core, or low-expansion cloth from Nan Ya or Chinese makers qualifies at scale;
• either company guides electronic-materials volume flat or lower for the fiscal year ending March 2028, which would mean Nvidia is displacing other buyers;
• the 2.5x mostly reflects share shifting among substrate makers rather than new substrate area;
• T-glass or ABF prices fall noticeably as new capacity arrives in 2027-2028.

This only helps you find transmission chains you may have missed. It is not a stock recommendation.

Sources

[1] NVIDIA · 2026-10-21 · GTC Berlin supply-chain capacity release · https://www.stocktitan.net/news/NVDA/nvidia-and-supply-chain-partners-expand-capacity-to-accelerate-ai-bkndg0mw4g2i.html [2] Sina Finance 7x24 · 2026-10-21 · Nvidia plans 2.5x substrate capacity in three years · https://finance.sina.cn/7x24/2026-10-21/detail-inivysyq4915707.d.html [3] Sina Finance 7x24 · 2026-10-21 · Nvidia works with Amkor, IBIDEN, Kinsus, Samsung Electro-Mechanics, SPIL and Unimicron · https://finance.sina.cn/7x24/2026-10-21/detail-inivysyn8146406.d.html [4] Korea Times · 2026-10-21 · Samsung Electro-Mechanics joins Nvidia substrate supply chain · https://www.koreatimes.co.kr/amp/world/20261022/nvidia-adds-samsung-electro-mechanics-to-substrate-supply-chain-plans-capacity-expansion-in-s-korea [5] TrendForce · 2026-08-06 · Nittobo raises FY2027 forecast; no further T-glass price hikes planned · https://www.trendforce.com/news/2026/08/06/news-nittobo-raises-fy2027-net-profit-forecast-by-jpy-3b-no-further-t-glass-price-hikes-planned/ [6] TrendForce · 2026-05-08 · Ajinomoto land buy for 2032 plant; ABF margins top 50% · https://www.trendforce.com/news/2026/05/08/news-ajinomoto-ramps-chip-packaging-push-with-%C2%A51-2b-land-buy-for-new-plant-in-2032-abf-margins-top-50-on-ai-boom/ [7] Drillr news · 2026-09-02 · Unimicron chairman on ABF substrate capacity at SEMICON Taiwan [8] Investing.com · 2026-08-06 · Ajinomoto Q1 FY2026 earnings call transcript · https://www.investing.com/news/transcripts/earnings-call-transcript-ajinomoto-q1-2026-profit-jumps-127-as-outlook-lifts-93CH-4840482 [9] Drillr price and segment data · 2026-10-21 · 3110.T and 2802.T closing prices