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Nitto Boseki is one of a small number of global producers of ultra-fine, low-thermal-expansion "T-glass" cloth used to reinforce the resin substrates that carry the most advanced logic ICs — including the large multi-die packages used in AI accelerators and servers, where dimensional stability under thermal cycling is a binding yield constraint. Demand for this grade has risen sharply with the AI-server buildout, and Nitto Boseki holds an outsized share of global supply for the finest weaves.
METI's Supply Security Plan mechanism (under the 2022 Economic Security Promotion Act, see 2022-05-18-japan-economic-security-promotion-act) lets a company file a plan committing to a minimum 10-year continuous-production period for a designated "specified critical good" in exchange for a capex grant of up to roughly a third of project cost. This is plan certification No. 3 in the 2025 semiconductor tranche (2025半導体第3号), following an earlier 2025 tranche certification for JX Metals' sputtering-target capacity (both filed under the same METI semiconductor-materials supply-security track, plan numbers 2025半導体第1号 and 2025半導体第2号).
The certified project: a new line at Nitto Boseki's Fukushima No. 2 plant (Fukushima City), total investment ~JPY 7.2bn, max grant ~JPY 2.4bn (33%), targeting a ~200% increase in production capacity for cutting-edge-logic-IC glass cloth, supply starting July 2027, with a minimum 10-year continuous production commitment attached as a condition of the grant.
Severity is set low (2/5, quant) — this is a single-company capex subsidy of modest absolute size (~USD 16m), not a trade-restrictive measure. It is filed because it is a concrete data point in the broader Japan ESPA supply-chain-resilience program and a rare instance of state support explicitly targeting a niche materials chokepoint (specialty glass cloth) rather than end-device fabs.
designated under Japan's specified-critical-goods regime, alongside semiconductors themselves and sputtering targets — a materials-layer, not just fab-layer, resilience push.
supply-side data point for AI-server substrate bottleneck watchers.
grant) likely to recur for other niche semiconductor-materials producers filing under the same METI track.
JX Metals (plan 1) and Nitto Boseki (plan 3) name other materials chokepoints worth tracking individually.
publishes execution data.