Smartphone Chip Production Threatened by Prolonged T-Glass Shortage Amid AI Boom

The smartphone industry could soon face a new bottleneck – not in chips or displays, but in one of the least-discussed yet most vital materials behind modern silicon. According to new analysis from Goldman Sachs, a severe shortage of T-glass – the high-silica fiberglass used in the substrates of integrated circuits – is unfolding as AI hardware demand continues to explode, diverting resources away from smartphone manufacturing.

This scarcity could soon reach what the report calls a “double-digit percentage shortage,” a problem that might ripple across the entire mobile supply chain.

To understand the issue, it helps to know what T-glass and its derivatives do. T-glass is a form of fiberglass prized for its thermal stability, ultra-flat surface, and superior structural integrity, which makes it ideal for use inside microchip substrates. These substrates act as the foundational layer of a semiconductor package, where integrated circuits are mounted and connected. They not only support mechanical stability but also assist in heat dissipation – a key factor in chip reliability.

At the heart of the current squeeze are Ajinomoto Build-up Film (ABF) substrates, essential components for AI-focused GPUs and ASICs. These substrates use multiple layers of resin films laminated onto copper foil, enabling ultra-dense wiring and higher pin counts – the kind needed by high-performance chips like Nvidia’s H100 or custom AI accelerators from Google and Amazon. The catch? ABF substrates rely heavily on T-glass, which means that most available supply has been consumed by the AI sector’s insatiable appetite.

As a result, there is now a major supply imbalance affecting another category: Bismaleimide Triazine (BT) substrates. These are the backbone of smartphone SoCs – chips that power every feature, from AI photo processing to 5G connectivity. BT substrates also require T-glass reinforcement, but with AI hardware production taking priority, the smartphone industry is being squeezed out of the queue.

Goldman Sachs warns that the shortage could persist for several quarters, potentially disrupting production timelines for flagship smartphones in 2025 and 2026. This comes at a delicate time: Apple, Samsung, and other OEMs are gearing up for aggressive product cycles, including Apple’s rumored six iPhone variants next year – one of which could be its first foldable model. If the T-glass crunch worsens, it could drive up SoC costs and extend lead times, forcing smartphone makers to compete directly with AI chip vendors for critical substrate materials.

In short, while most of the tech world is fixated on GPU shortages, a quieter crisis may be forming under the surface – one that threatens to ripple from datacenters to consumers’ pockets.