Technology
Nvidia Boom: Why Ibiden Is the Secret King of the AI Revolution
The inconspicuous supplier from Japan is at the center of global AI chip production – and is struggling with the challenge of keeping up with rapidly growing demand.
Artificial intelligence is the engine of the technological future, and Nvidia provides the heart with its advanced GPUs. But in the shadow of the Silicon Valley giant, there is a silent hero: Ibiden Co.
The 112-year-old Japanese supplier is the leading manufacturer of chip substrates used in Nvidia's AI chips. These substrates are far more than just a connection between chip and board – they are the key to making the massive computing power of AI processors possible. "Our customers buy everything we can produce," says Ibiden CEO Koji Kawashima.
But the pressure is mounting. The construction of a new factory in Japan's Gifu Prefecture is already underway. Production is set to start at 25% capacity by the end of 2025 and increase to 50% by March 2026. But even that is not enough. "Our customers are concerned," explains Kawashima, "they are already asking about the next investment.
A partnership that made history
Ibiden does not only have Nvidia on its customer list. Intel, AMD, Samsung, and TSMC are also included. But the relationship with Intel is special: In the 1990s, Kawashima waited daily in front of the headquarters in Santa Clara to get feedback directly from engineers. A partnership that made Ibiden big – at that time, Intel generated up to 80% of Ibiden's substrate sales.
Today, this relationship has changed. Intel now accounts for only 30% of the revenue. "Intel raised us and opened doors," says Kawashima, but emphasizes: "Intel will always remain an important customer.
The Challenge of Growth
While demand for AI server components explodes, the market for general servers weakens. The dependency on Intel and the stock price, which fell by 40% in 2024, highlight the company's challenges. Yet analysts remain optimistic: "Ibiden is the only supplier capable of delivering Nvidia substrates in this quality and quantity," says Toyo Securities analyst Hideki Yasuda.
The secret? A combination of technological leadership and perfected production. Even Taiwanese competitors like Unimicron struggle to meet these standards.
The look ahead
Ibiden is not only dependent on Nvidia.
The race for the AI crown has just begun – and Ibiden is in the driver's seat.
