TLDR: Japanese electronics manufacturer Ibiden, a key supplier to Nvidia, is significantly increasing its production of integrated circuit (IC) package substrates. This expansion, driven by the explosive growth in artificial intelligence, particularly generative AI servers, aims to boost output by 150% by 2027 and nearly double demand for AI-related substrates in fiscal 2025.
TOKYO – Ibiden, a prominent Japanese electronics manufacturer and a crucial supplier for Nvidia, is undertaking a substantial expansion of its integrated circuit (IC) package substrate production. This strategic move, as confirmed by President and CEO Koji Kawashima to Nikkei, is a direct response to the escalating demand fueled by the global artificial intelligence (AI) boom, specifically from the generative AI server market.
Currently operating three facilities across two plants for substrate manufacturing, Ibiden plans to rapidly scale up its operations. The company intends to reconfigure equipment to have five facilities across three plants actively producing these critical components within the current fiscal year, which ends in March 2026. This aggressive expansion is projected to result in a 150% increase in production volume, measured by package area, from 2024 levels by the year 2027.
A cornerstone of this expansion is the establishment of a new, dedicated facility for IC package substrates tailored for generative AI servers. This facility will occupy half of the 150,000-square-meter lot at Ibiden’s Ono plant in Gifu prefecture, central Japan, with production slated to commence next month. The company will assess technological advancements in IC substrates before deciding on the utilization of the remaining half of the site.
Kawashima highlighted the immediate impact of the AI surge, stating that Ibiden anticipates demand for generative AI server-related substrates to ‘nearly double from the previous year’ in fiscal 2025. Ibiden is widely recognized as a leading global provider of these specialized substrates, particularly those used in Nvidia’s advanced AI chips.
The company has set ambitious financial targets for its electronics business, which is heavily reliant on IC package substrates. Ibiden aims to achieve sales of 380 billion yen (approximately $2.57 billion USD) in this segment by the fiscal year ending March 2028. This represents a significant 93% increase from the 369.4 billion yen recorded in the fiscal year ended March 2025, where the electronics business accounted for over 50% of consolidated sales. The majority of this projected growth is expected to originate from products serving the generative AI server sector.
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Despite the robust growth in AI-related demand, Ibiden acknowledges a contrasting trend in other areas, with sales for products linked to personal computers and general-purpose servers remaining stagnant. In terms of geographical strategy, Ibiden plans to centralize its PC production at its factory in the Philippines. CEO Kawashima also noted that the company is not currently considering IC package substrate production in the United States, citing challenges in securing a sufficient number of skilled engineers.
