Ibiden Co, the main provider of chip bundle substrates vital to Nvidia Corp’s superior semiconductors, is evaluating plans to speed up its manufacturing growth to maintain tempo with surging demand for AI chips.
The corporate’s CEO, Koji Kawashima, revealed that prospects have already secured all accessible substrate provides, with demand anticipated to stay robust by 2025.
The 112-year-old Japanese firm is developing a brand new substrate manufacturing facility in Gifu prefecture, central Japan. The ability is scheduled to begin operations at 25% capability within the final quarter of 2025, ramping as much as 50% by March 2026.
Nonetheless, Kawashima acknowledged that even this deliberate capability may fall wanting demand, prompting discussions on advancing the timeline for the remaining 50% capability.
“Our prospects have issues,” Kawashima said. “We’re already being requested about our subsequent funding and the following capability growth.”
Ibiden’s shares surged by 5.5% in Tokyo on Monday, marking the corporate’s largest intraday achieve in over a month. The rise displays investor optimism about Ibiden’s dominant place within the AI substrate market, the place it serves main purchasers like Nvidia, Intel Corp., Superior Micro Gadgets Inc., Samsung Electronics Co., and Taiwan Semiconductor Manufacturing Co. (TSMC).
Many of those purchasers collaborate with Ibiden early in product improvement to customise substrates that transmit alerts from semiconductors to circuit boards and face up to the warmth generated by Nvidia’s graphics processing models.
Based in 1912 as an influence utility firm, Ibiden developed its semiconductor experience by a partnership with Intel within the Nineties. Kawashima personally cultivated the connection by in search of suggestions from Intel engineers and executives. Intel as soon as contributed 70% to 80% of Ibiden’s income from chip bundle substrates, although this dropped to 30% by the fiscal yr ending March 2023 as Intel struggled with its turnaround efforts. Regardless of this decline, Kawashima expressed confidence in Intel’s restoration, calling the corporate an important and “treasured” buyer.
Ibiden has confronted challenges this yr, together with a 40% drop in its inventory worth because of its reliance on Intel and weaker demand for general-purpose server parts. In October, the corporate revised its revenue outlook downward, citing these components.
Nonetheless, AI server-related development has bolstered Ibiden’s outlook, with AI semiconductors now contributing greater than 15% of its ¥370 billion ($2.3 billion) gross sales—a proportion anticipated to rise additional.
Whereas rivals like Taiwan’s Unimicron Expertise Corp. are eyeing the AI substrate market, analysts consider Ibiden’s dominance will stay intact. Toyo Securities analyst Hideki Yasuda famous that Ibiden’s capacity to mass-produce refined substrates with excessive manufacturing yields makes it troublesome for opponents to seize vital market share.
Nvidia, which solely makes use of Ibiden’s substrates for its AI chips, has begun full manufacturing of its next-generation Blackwell semiconductors following preliminary technical challenges.
Over the long run, Nvidia might face competitors from application-specific chips developed by Marvell Expertise Inc. and Broadcom Inc., in addition to customized silicon from Google and Microsoft. Kawashima indicated that Ibiden is well-positioned to serve all these potential purchasers, as their substrate necessities are more likely to stay much like Nvidia’s.
Regardless of the rising demand for AI substrates, Ibiden has no plans to construct manufacturing amenities in america, citing excessive labor and logistics prices. Kawashima famous that Intel’s function in boosting home semiconductor manufacturing aligns with Washington’s objectives, and the corporate will preserve its deal with supporting Intel and different purchasers from its current areas.