How Taiwanese Giants are Adapting to AI and 800G Growth in ABF Substrate Industry
Table of Contents
You might want to know
- How are Taiwanese ABF manufacturers positioning themselves in light of AI and 800G advancements?
- What does the future hold for the ABF substrate industry?
Main Topic
The ABF substrate industry is poised for a significant transformation by 2025, driven by increased demands from AI servers, 800G switches, and AI PCs. After a period of adjustment, experts anticipate a golden cross in supply and demand. This shift is crucial for Taiwanese giants, including Unimicron, Nan Ya PCB, and Kinsus Interconnect Technology. As the market focuses on these players' strategies for seizing new growth opportunities, the question arises as to how they will adapt to increasing demands.
ABF substrates, essential for advanced packaging due to their multilayer and precision design capabilities, are vital for core components in AI and high-performance computing (HPC) servers. Having undergone inventory and capacity adjustments over the last two years, it is anticipated that demand will rebound by 2025. This resurgence will be driven largely by AI server needs, with these applications projected to comprise about 20% of global ABF substrate demand.
Unimicron has been strategically enhancing its capital expenditure to cover GPU and ASIC platforms, making it well-positioned to benefit from high-end substrate specification upgrades and expanded shipments. Nan Ya PCB boasts a robust market share in the 800G switch sector, with its ABF substrate revenue expected to reach 55%. Kinsus, in turn, is poised to see growing operational momentum due to increased demand for PC GPU and the NVIDIA Rubin platform.
The ABF industry faced a temporary oversupply during the aggressive expansion from 2023 to 2024. However, with new applications spreading across AI, AI PCs, and 800G switches, an anticipated reversal in industry structure by 2025 will lead to a scenario where demand surpasses supply. Goldman Sachs forecasts a supply-demand gap of around 9% by 2026, second to the 2021 peak, indicating a sustainable growth trajectory.
Key Insights Table
| Aspect | Description |
|---|---|
| Key Fact 1 | Supply-demand dynamics in the ABF substrate industry are set to change, favoring supply shortages by 2025. |
| Key Fact 2 | Taiwanese companies are strategically positioning to capitalize on AI-driven growth. |
Afterwards...
As we approach 2025, the industry's biggest challenges include material bottlenecks, particularly the scarcity of Low DK glass cloth, a critical component for ABF substrates. While progress has been made in domestic production of certain layers, the market still heavily relies on Japanese suppliers, with long lead times for capacity and quality certification.
Short-term volatility may arise from US-China trade policies, currency fluctuations, and client demand patterns. However, longer-term structural trends—such as AI infrastructure upgrades, CPO integration, and increased penetration of automotive electronics—provide a promising backdrop for industry expansion. The global ABF substrate market is predicted to reach $11.3 billion by 2027, underscoring its integral role in the electronic industry's value chain and highlighting opportunities for mid- to long-term investment.