China And Japan Might Save Apple's Rising Prices From The AI Boom

The AI boom and resulting strained supply chain created by AI companies always needing more RAM and other components is already affecting the industry overall. However, RAM isn't the only component manufacturers are struggling to get their hands on, as a major Japanese company behind a glass cloth fiber used in iPhone models and other popular devices can't keep up with demand from Apple, Qualcomm, Nvidia, Google, Amazon, and others.

This glass cloth is made from fine glass fibers to reinforce layers in printed circuit boards(PCBs), and the most prevalent of these fibers are made by Japan's Nitto Boseki (aka Nittobo). According to Nikkei Asia, Apple was an early adopter of Nittobo's glass cloth. However, with AI companies requiring untold numbers of high-performance PCBs, this specific glass cloth has reportedly put Apple at risk of a supply shortage.

Nikkei Asia says that industry insiders are calling this strain "one of the biggest bottlenecks for the electronics-making and AI industry for 2026." Apple has been closely monitoring the situation by not only sending its own staff to Japan to ensure it gets the material, but also reaching out to other companies that might be able to help the company avoid possible launch delays, product shortages, or price hikes.

While Apple under Tim Cook is known for its ability to get everything that it needs from the supply chain without issues (barring rare circumstances like iPhone 14 Pro production issues during the COVID-19 pandemic), the company is now pursuing other options. A person familiar with the situation told Nikkei that Nittobo will not catch up with demand until the second half of 2027.

As a result, Apple is focusing on small Chinese glass fiber makers, like Grace Fabric Technology, to ensure it can deliver a glass cloth of similar quality to Nittobo's, so it won't impact the release of new products, like future iPhone models. Nikkei says that Qualcomm is also targeting a similar strategy as Apple, but new supply chain companies are still struggling to develop this glass fiber, as the quality of Nittobo's fiber gives major tech companies confidence that their products won't be compromised.

In 2026, Apple is expected to unveil the iPhone 17e in the first quarter of the year. The iPhone 18 Pro, iPhone 18 Pro Max, and the upcoming foldable iPhone are all likely to debut in the second half of 2026. Meanwhile, Apple is still producing millions of iPhone 17 models in the months ahead, so it's clear that this could become a serious bottleneck in the near future if it's not resolved.