ABF substrate supply may stay short of demand through 2023

Jay Liu, Taipei; Willis Ke, DIGITIMES Asia 0

ABF substrate supply is likely to remain short of demand through 2023 although makers in Taiwan, Japan and South Korea have all geared up capacity expansions at the request of chipmaking clients, according to industry sources.

Major chipmakers have been keen to book dedicated capacity from ABF substrate suppliers or join their capacity expansions by contributing equipment or investment funds, seeking to secure maximum supply for the next few years, the sources said.

Intel, for instance, has booked dedicated ABF substrate capacities from makers including Taiwan's Unimicron Technology, Japan's Ibiden and Shinko, and Austria's AT&S to meet its demand for processing new HPC chips in the next five years, the sources continued.

The Intel move has prompted AMD and Nvidia to more aggressively pursue capacity support for 2022-2023 from more ABF substrate makers as they are eager to expand presence in the HPC CPU and GPU sectors. Xilinx, now a major networking chips supplier for Europe telecom equipment vendors, is also striving to cement ABF substrate capacity from suppliers including Unimicron, Nan Ya PCB and Kinsus Interconnect Technology, noted the sources.

Unimicron's joint-venture ABF substrate plant with Intel, in Yangmei, northern Taiwan, is set to start commercial runs in second-half 2022. The company will also resume full-scale production of ABF and BT substrates at another northern Taiwan plant, which was damaged by a fire in October 2020.

After commercializing new capacity at its plant in Kunshan, China in first-half 2021, Nan Ya will also ready new capacity at its plant in Luchu, northern Taiwan by the end of the year. Its plant in Shulin, New Taipei will roll out new ABF substrate capacity in 2022 when its overall capacity for such substrate grows 40% from 2020.

Kinsus will carry out ABF substrate capacity expansions at its plant in Yangmei in stages, with 30-40% annual increases in 2021-2023.

Despite capacity expansions under way or planned by Taiwan makers and their peers in Japan and Korea, ABF substrate supply still cannot satisfy the ever-growing demand from clients, the sources said, reasoning that such substrates involve highly complicated manufacturing technologies with yield rates usually starting with 30-50% and then ramping up slowly, affecting actual shipments from suppliers.