Apple's supply chain and its efficiency may be the envy of the world, but even it is being constrained thanks to a sole supplier seeing increasing demand from AI companies.
One of the most important successes of CEO Tim Cook is Apple's supply chain, but some components that meet Apple's quality standards are still hard to get. Its strength was exhibited by Apple's resilience through COVID and recent tariffs, but there are still weak points.
According to a report from Nikkei Asia, a sole supplier of high-quality glass cloth used in printed circuit boards (PCBs), Nitto Boseki, has seen increased demand that has become unsustainable. Production capacity is being increased, but that won't take effect until late 2027, so there's nothing Nitto Boseki can do in the meantime.
Multiple industry insiders cited in the report say this is "one of the biggest bottlenecks for the electronics-making and AI industry for 2026." Other manufacturers are being explored, and even lower-quality glass cloth, but those may not prove enough compared to what Nitto Boseki provides.
Apple's increasing development of Apple Silicon has gone without much problem in the past decade, as it was one of the biggest buyers in the space and few others had such demand. The company essentially had the run of the supply, and everyone else got what was left, and that was fine until AI came along.
Now PCBs that are of higher quality are in such high demand that Apple is being pushed down the list. Nvidia, Google, and others have their own representatives in Japan begging for more supply, just like Apple does.
What makes matters worse is that every aspect of developing these boards is getting more expensive and supply is limited. One example that was provided is that the thickness of boards has increased, which means drill bits wear out faster and more need to be ordered.
Qualcomm is also feeling the pressure of increased demand with low supply. If it and Apple are unable to make critical components needed for the iPhone, Mac, iPad, and other devices, then consumers could see the result in dwindling supply through 2026.
The industry isn't resting on its laurels waiting for a solution to come along or more capacity to appear. Improved techniques, more specialized suppliers, and alternative solutions could help vary this sector of the supply chain and ease the bottleneck.
It isn't clear exactly how these constraints might affect Apple and its product launches in 2026, but if consumers notice it's harder to get an iPhone than usual, then at least we know to blame glass cloth.
