Taiwan-based IC substrate providers including Unimicron Technology, Nan Ya PCB and Kinsus Interconnect Technology have seen the visibility of orders for ABF substrates extend to second-half 2021, promising another lucrative year for them, according to industry sources.
With ABF substrates needed to process CPU and GPU chips, US chipmakers AMD and Nvidia have been aggressively placing orders for such substrates with Taiwanese suppliers to meet strong demand for PS5 CPUs and GeForce RTX 30 series GPUs, respectively, and expand market shares in the segments, the sources said. Intel's major ABF substrate supplier Unimicron has also readied capacity to support upcoming volume production of its new Whitley CPU platforms, the sources continued.
ABF substrate demand for 5G networking chips also has been strong. Despite the loss of orders from Huawei/HiSilicon, suppliers have seen other clients including Broadcom and Xilinx steadily ramp up orders to deepen their presence in the 5G infrastructure sector, the sources said, adding that HPC chips are another lucrative segment for ABF substrate vendors.
The growing complexity in applications has enabled ABF substrate makers to expand their customer bases and see order visibility lengthen further, the sources said, but they have to address new challenges in technology upgrades and growing difficulty in arranging production schedules for clients.
The market for ABF substrates is expected to sustain high growth momentum in the next 3-5 years, and order visibility stretching to 2-3 quarters ahead will become a new norm, the sources stressed.
Despite the increasing demand, Unimicron and Nan Ya both plan to enforce only a 10% capacity expansion for ABF substrates in 2021, as delivery lead time for related manufacturing equipment has been extended to almost one year, the sources noted.
Article translated by Willis Ke
