A confluence of factors—soaring demand for AI servers, a constrained supply of electronic yarn raw materials, and Toyota's dominance in high-end loom manufacturing—has propelled electronic fabric prices upward for a full year, with the upward momentum showing no signs of abating. Presently, the price of 7628 fabric has surged past its previous high by more than 30%, with even steeper hikes observed for thinner fabric variants. This price surge has translated into substantial growth in the share prices and financial performance of relevant listed companies. The ripple effect of this price escalation is reverberating throughout the industrial chain, leading to the elimination of low-end suppliers and accelerating the consolidation of industry supply around leading players.

On the demand front, the enduring surge in AI server demand has elevated the baseline demand for electronic fabrics. Profit margins are incentivizing companies to pivot towards the production of specialty fabrics, thereby further constricting the supply of conventional fabrics. From a raw material perspective, the commissioning timeline for new electronic yarn kilns is protracted, with minimal additional capacity anticipated until 2026. Leading enterprises are prioritizing internal consumption, thereby limiting procurement opportunities for small and medium-sized factories.

In terms of equipment, the lead time for Toyota's high-end looms extends beyond two years. Although domestic loom manufacturers have made strides, they are still in the process of verification and market introduction. At present, only China Jushi and Kingboard Laminates have articulated clear plans to expand their electronic yarn and fabric production capacities. Meanwhile, Sinoma Science & Technology, International Composite Materials, and Honghe Technology are concentrating on broadening their specialty electronic fabric production.

Industry observers posit that 2028 will serve as a critical stress test for this current boom cycle. However, concerns regarding PTFE as a potential substitute for electronic fabrics have been exaggerated. Overseas production capacity for ordinary electronic fabrics is on the decline, resulting in a significant influx of orders to China. Consequently, there remains considerable room for further price appreciation in the domestic electronic fabric market.