Taiwan-based IC substrate suppliers including Unimicron Technology and Nan Ya PCB are expected to continue experiencing tight supply of ABS substrates throughout 2020 despite losses of orders from Huawei, but their profitability may fall slightly, according to industry sources.
As Huawei has required huge capacity support for ABF substrates to process high-end networking chips solutions, Unimicron and Nan Ya have readied as much capacity as possible for the Chinese tech giant, and even smaller maker Kinsus Interconnect Technology has also landed a portion of orders, the sources said. The three suppliers have all stressed that they can now hardly predict prospects for shipments to Huawei beyond September when fresh US sanctions take effect, the sources said.
Huawei/HiSilicon did offer better prices and contract terms than industry average seeking to gain capacity commitment for high-end ABF substrates from the three supply partners, the sources said. If the US toughens its sanctions against Huawei as scheduled, capacity vacated by the Chinese client can be easily filled by other clients with profitability, however, to shrink as a result, the sources continued.
Many potential clients, especially Taiwan's vendors of 5G base station chips solutions, are inquiring about the possibility of booking ABF substrate capacity looking to take over market shares left by Huawei, the sources said.
The sources said tight ABF substrate supply is expected to persist as demand will ramp up from dedicated vendors of networking, process and graphic chip solutions as well as system makers with in-house IC development capability to support growing 5G applications.
Article translated by Willis Ke
