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You are at:Home » Nvidia supplier Ibiden considers rapid growth in AI demand
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Nvidia supplier Ibiden considers rapid growth in AI demand

Adnan MaharBy Adnan MaharJuly 1, 2007No Comments4 Mins Read0 Views
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(Bloomberg) — IBIDEN, a major supplier of chip packaging substrates used in Nvidia Inc.’s cutting-edge semiconductors, may need to ramp up production capacity to keep up with demand, its chief executive says. said the CEO. board member.

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Sales of AI substrates from the 112-year-old company are strong, with customers buying up all of IBIDEN’s products, and CEO Koji Kawashima added that demand is likely to continue at least until next year. .

IBIDEN is building a new circuit board factory in Gifu Prefecture, central Japan, and plans to operate at 25% capacity around the fourth quarter of 2025, reaching 50% by March 2026. But that may not be enough, Kawashima said. The company is discussing when to bring the remaining 50% capacity online.

“Our customers are concerned,” he said in an interview. “We are already being asked about the next investment and the next capacity expansion.”

IBIDEN shares rose as much as 5.5% in Tokyo on Monday, the biggest intraday gain in more than a month.

In addition to Nvidia, IBIDEN’s customers include Intel, Advanced Micro Devices, Samsung Electronics and Taiwan Semiconductor Manufacturing Co., according to data compiled by Bloomberg. Many consult Japanese companies early in product development because the substrates that help transmit signals from semiconductors to circuit boards must be tailored for each chip. To form an AI chip package with components such as memory, the board must be made to withstand the heat of the Nvidia graphics processing unit.

Founded in 1912 as a power company, IBIDEN developed its semiconductor expertise through a partnership with Intel. Kawashima developed this skill in the early 1990s, spending his days waiting in front of Santa Clara’s offices for engineers and executives seeking product feedback. At one time, Intel accounted for about 70% to 80% of Ibiden’s revenue from chip packaging substrates. That share fell to about 30% in the fiscal year that ended in March, as the U.S. chipmaker struggles to turn around, including the recent firing of CEO Pat Gelsinger.

The dependence on Intel has hurt Ibiden’s stock price, which has fallen about 40% this year. IBIDEN lowered its profit forecast in October, citing sluggish demand for components used in general-purpose servers as having outpaced growth in AI server-related products. However, Kawashima said he was confident Intel would bounce back, although he noted the importance of expanding business with chipmakers other than Intel.

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“Intel’s overall technology is very sophisticated,” the 61-year-old said. “Intel has helped us grow and opened so many doors for us. We will always treasure our relationship with Intel and they will forever be an important customer. ”

Intel is likely to play a key role in Washington’s goal of increasing domestic cutting-edge semiconductor production capacity, as many foreign chip makers are reluctant to transfer cutting-edge technology to the United States, Kawashima said. said. Ibiden itself does not have manufacturing facilities in the United States. Kawashima said there are no plans to build one because of labor and logistics costs, regardless of President-elect Donald Trump’s plans to impose tariffs on a wide range of products.

Currently, all of Nvidia’s AI semiconductors use IBIDEN substrates, but Taiwanese rivals such as Unimicron Technology are also eyeing the field. However, Toyo Securities analyst Hideki Yasuda said that it will not be easy for IBIDEN to break its position as a dominant supplier.

He said, “NVIDIA’s AI chips require sophisticated substrates, and only IBIDEN can mass-produce them with good production yields.” “Taiwanese competitors will not be able to take much of IBIDEN’s market share.”

AI semiconductors account for more than 15% of IBIDEN’s approximately 370 billion yen ($2.3 billion) in sales, and that percentage is expected to rise further. Nvidia said it has begun full-scale production of its next-generation Blackwell chips after facing some early technical challenges.

Read: Nvidia partner Hon Hai strengthens ability to meet ‘crazy’ AI demands

In the long term, NVIDIA could face increased competition from special-purpose chips from Marvell Technology Inc. and Broadcom Inc., as well as from its own silicon from Alphabet Inc.’s Google and Microsoft Corp. In theory, IBIDEN should be able to: Kawashima said the AI ​​chip’s package design and materials will likely remain similar to Nvidia’s, so it can accommodate all of them.

(Added stock price movements in the 5th paragraph.)

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Adnan Mahar
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Adnan is a passionate doctor from Pakistan with a keen interest in exploring the world of politics, sports, and international affairs. As an avid reader and lifelong learner, he is deeply committed to sharing insights, perspectives, and thought-provoking ideas. His journey combines a love for knowledge with an analytical approach to current events, aiming to inspire meaningful conversations and broaden understanding across a wide range of topics.

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