Nvidia’s dependence on its contractors for the supply of computing accelerators illustrates the need to synchronize the efforts of components market participants to saturate it. The Japanese company Ibiden, which supplies substrates for chips, is confident that high demand for such products will continue in the next few years.
Image source: Ibiden
Now substrates for AI chips form about 15% of Ibiden’s revenue, which in total reaches $2.3 billion, but this share will grow in the future, according to company representatives interviewed by Bloomberg. All Nvidia accelerators now use only Ibiden substrates, although Taiwanese competitors such as Unimicron Technology are trying to squeeze out the Japanese supplier.
Ibiden developed its competencies in the field of substrate production in the last century with the active participation of Intel. In the nineties, for example, this American processor manufacturer generated up to 90% of Ibiden’s revenue from the supply of substrates. By the end of March of the outgoing year, this figure fell to 30%, but Ibiden management continues to consider Intel a very important client, and expresses confidence that everything will work out for it.
Intel itself will play a key role in the efforts of the US authorities to revive the national semiconductor industry, but Ibiden does not see any point in building manufacturing plants in the United States. This requires large costs for logistics and employee wages, and the increased duties promised by Trump will not be able to dramatically influence Ibiden’s decision.
Ibiden’s clients also include AMD, Samsung and TSMC, and they work closely with the Japanese contractor to develop their new products. Now the entire volume of products produced by Ibiden is being bought up by customers, high demand will continue at least until the end of next year. The company is building a new substrate production facility in central Japan. By the end of next year it will be running at 25% of its design capacity, and by March 2026 it will reach 50%. This will not be enough to satisfy the demand for substrates from customers, so the company is now negotiating with them about the timing of bringing the plant under construction to 100% capacity.