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Driven mostly by Nvidia (NVDA, Financials), Japanese producer Ibiden is looking at methods to boost manufacturing capacity to satisfy rising demand for chip substrates vital for artificial intelligence computers. CEO Koji Kawashima made the statement while in an interview with Bloomberg.
Based in Ogaki, Japan, Ibiden provides specialized substratesincluding powerful graphics processing units from Nvidiathat are vital for producing artificial intelligence chips. Strong orders have driven the business to investigate capacity increases because, according to Kawashima, demand is projected to stay high until next year.
Ibiden is building a new manufacturing site in Gifu Prefecture to handle these demands. By late 2025 the plant will start running at 25% capacity; by early 2026 it will rise to 50%. Talks on complete operating capability to satisfy consumer expectations are still under progress.
Kawashima underlined the need of increasing output to maintain customer satisfaction and said that customers had already asked about next projects.
Although Nvidia continues to be a major client, Ibiden has broadened its portfolio of business to include firms engaged in advanced computing technology. Once the biggest source of income for Ibiden, Intel now accounts for less of revenues. While stressing the need of lowering dependence on any one customer, Kawashima pointed out the historical significance of the link with Intel.
Though rising sales of AI-specific devices, Ibiden recently changed its profit projection due to declining demand for server-related components in non-AI applications. Kawashima voiced hope for overcoming these obstacles by means of strategic alliances and creativity.
Citing logistical and labor cost issues, the corporation has decided against building manufacturing plants located in the United States.
As competition in the AI chip industry rises, Ibiden expects to be offering a wider spectrum of customers ahead. From established companies like Nvidia to startups with unique silicon designs, Kawashima pointed out the company's flexibility in fulfilling changing market demands.
This article first appeared on GuruFocus.