Surging AI Demand Strains Apple’s iPhone Supply Chain
Apple’s renowned supply chain, a testament to CEO Tim Cook’s strategic prowess, is encountering significant challenges due to escalating demands from the artificial intelligence (AI) sector. A critical bottleneck has emerged around a key component: high-quality glass cloth used in printed circuit boards (PCBs).
Nitto Boseki, the exclusive supplier of this specialized glass cloth, is grappling with an unprecedented surge in orders from AI companies. This surge has outpaced the company’s current production capabilities. Although plans are underway to expand capacity, these enhancements are not expected to materialize until late 2027. In the interim, Nitto Boseki faces limitations in meeting the soaring demand.
Industry insiders have identified this situation as a major bottleneck for both the electronics manufacturing and AI industries in 2026. Efforts to source alternative manufacturers or consider lower-quality glass cloth have been explored. However, these alternatives may not meet the stringent quality standards that Nitto Boseki’s products provide.
Over the past decade, Apple’s development of Apple Silicon has proceeded with minimal disruption, largely due to its dominant purchasing power in the market. This dominance allowed Apple to secure necessary components ahead of competitors. However, the advent of AI has intensified the demand for high-quality PCBs, leading to increased competition for these essential materials.
Tech giants such as Nvidia and Google are now vying for the same high-quality components, placing additional pressure on suppliers. Representatives from these companies, alongside Apple, are actively seeking to secure more supply from Japanese manufacturers.
Compounding the issue, the production of these advanced boards has become more costly and resource-intensive. For instance, the increased thickness of the boards accelerates the wear and tear on drill bits, necessitating more frequent replacements and orders.
Qualcomm is also experiencing the strain of heightened demand coupled with limited supply. Should both Qualcomm and Apple face challenges in procuring critical components for devices like the iPhone, Mac, and iPad, consumers might encounter product shortages throughout 2026.
The industry is proactively seeking solutions to alleviate this bottleneck. Innovations in manufacturing techniques, engagement with specialized suppliers, and exploration of alternative materials are among the strategies being considered to diversify the supply chain and mitigate the current constraints.
While the exact impact on Apple’s product launches in 2026 remains uncertain, potential difficulties in obtaining iPhones may arise. In such cases, the scarcity of high-quality glass cloth stands as a significant contributing factor.
