Surging demand for AI GPUs, custom ASICs, server CPUs and high-speed networking chips is propelling the global ABF packaging substrate industry into a new phase of structural expansion. Although leading manufacturers including Unimicron, Nan Ya PCB, Ibiden, Samsung Electro-Mechanics and AT&S are accelerating new capacity construction, the long build-out and ramp-up cycles for new fabs—combined with the ongoing evolution of AI chip substrates toward larger form factors, higher layer counts and greater complexity—mean that effective global ABF substrate capacity is likely to remain tight through 2027–2030.
The report projects that global ABF substrate demand will exceed supply by 9.3% in 2027 and 13.7% in 2028. As AI servers, GPUs, ASICs and high-speed networking chips continue to drive demand for advanced packaging substrates, ABF substrates are evolving from a key packaging carrier for traditional PC processors into a critical foundational material for AI data centers and high-performance computing systems.
- AI Computing Demand Drives a New Growth Cycle for ABF Packaging Substrates, with the Supply-Demand Gap Widening in 2027–2028
As global AI data center build-out continues apace, demand for high-performance packaging substrates from GPUs, AI ASICs, server CPUs and high-speed networking chips has grown significantly. High-end packaging substrates incorporating ABF (Ajinomoto Build-up Film) build-up insulating material are becoming an increasingly important link in the advanced computing chip supply chain. ABF substrate demand has gradually shifted from a structure historically dependent on PC processors and traditional servers toward a new phase driven by AI accelerators, high-performance computing and cloud data centers. In particular, against the backdrop of sustained growth in AI training and inference workloads, high-end processors require larger package footprints, more routing layers and more complex interconnect structures, significantly increasing the manufacturing resources consumed per chip for ABF substrates.
The report expects the global ABF substrate supply-demand balance to remain relatively stable in 2026, with a pronounced supply gap beginning to emerge from 2027. According to the latest supply-demand model, the demand-to-supply ratio will reach 109.3% in 2027 and rise further to 113.7% in 2028, corresponding to demand gaps of 9.3% and 13.7% relative to supply—markedly higher than the previously forecast 6.2% and 9.4%. By 2030, the demand-to-supply ratio is projected to reach 125.9%. This implies that even with continued capacity expansion by major global substrate manufacturers, new supply may still fall short of fully meeting the growing demand from AI computing chips.
Global ABF Substrate Demand-to-Supply Ratio Forecast
- AI Chip Packaging Substrates Are Migrating Toward Larger Sizes, Higher Layer Counts and More Complex Structures, Constraining Effective Capacity
The current tightness in ABF substrate supply and demand is not solely attributable to increased chip shipment volumes; more importantly, it reflects the continuous rise in AI chip packaging complexity. Compared with traditional PC CPUs, AI GPUs, custom ASICs and high-performance server processors typically feature larger die sizes, more complex I/O interconnect requirements and higher signal transmission densities, necessitating high-end FC-BGA packaging substrates with larger surface areas and more routing layers. As advanced packaging evolves toward higher bandwidth and greater system integration scale, the substrate manufacturing resources consumed per chip continue to rise, limiting the number of final substrates that can be produced with the same equipment and fab capacity.
Larger sizes, higher layer counts and more complex manufacturing processes mean that nominal capacity growth cannot translate directly into proportional increases in effective output. For high-end ABF substrates, manufacturing capability depends not only on fab floor space and equipment count but also on process complexity, production cycle times and yield. Consequently, even as global substrate manufacturers continue to add production lines, they must contend with the gap between high-end product production efficiency and actual deliverable capacity. This is a key technical reason why ABF substrate supply-demand tightness may intensify further in 2027–2028.
III. Growing Demand from Chinese AI ASICs and Global Cloud Providers’ In-House Chips Is Reshaping the ABF Substrate Market
The diversification of AI computing chip demand is a key factor behind the upward revision to ABF substrate demand forecasts. In the past, high-end AI computing demand was concentrated primarily on NVIDIA GPUs and a handful of large processor platforms. As global cloud providers accelerate in-house ASIC development, however, the sources of ABF substrate demand are steadily broadening. Amazon Trainium, Google TPU, NVIDIA GPUs, AMD GPUs, and custom AI chips from Microsoft and other technology companies differ in substrate size, layer count and packaging complexity, driving the entire ABF industry toward higher-end product structures.
Among these, growth in Chinese AI chip demand merits particular attention. The report incorporates chips from companies including Huawei, Cambricon, Hygon and T-Head into the “other ASIC” category and has significantly raised shipment forecasts for this segment. Shipments of other ASICs are expected to reach 6.4 million units in 2027, up from the previously forecast 4.6 million, and further rise to 8.7 million units in 2028, up from the previously forecast 6.2 million. By 2030, shipments in this category are projected to reach 13.4 million units. Meanwhile, forecasts for NVIDIA GPUs and server CPUs remain broadly stable, indicating that the upward revision to ABF substrate demand is not solely dependent on any single GPU vendor but is being driven jointly by the diversification of global AI chip architectures, the expansion of cloud providers’ in-house chips and the development of China’s AI computing industry.
Upward Revision to Other ASIC Shipment Forecasts
IV. Global ABF Substrate Manufacturers Accelerate Capacity Expansion: Unimicron, Nan Ya PCB, Kinsus, Ibiden and Samsung Electro-Mechanics Build Out Comprehensive Footprints
In response to growing demand from AI servers and high-performance computing chips, major global ABF substrate manufacturers are accelerating new fab construction and capacity expansion. Unimicron, Nan Ya PCB, Kinsus, Ibiden, Samsung Electro-Mechanics, AT&S and Daeduck have all announced capacity expansion plans at various stages. However, these projects typically require lengthy construction, equipment installation, process qualification and ramp-up cycles, meaning that even large-scale new capacity plans will struggle to quickly alleviate the tightness in high-end ABF substrate supply in 2027–2028.
The expansion timelines of individual manufacturers vary considerably. Unimicron plans to begin ramping production at its Guangfu No. 2 fab in 2027, adding approximately 10%–15% capacity, with additional projects including its Yangmei series fabs to follow in 2028–2030 and beyond. Kinsus expects capacity growth of approximately 30% in 2027, with further additions in 2028 and 2029. Nan Ya PCB plans to begin ramping production at its new fab in the second half of 2029. Samsung Electro-Mechanics is establishing AI server packaging substrate production bases in Sejong, Korea, and Vietnam, with the Sejong project scheduled for mass production beginning in September 2028 and the Vietnam project planned for operation by June 2030. In addition, Ibiden, AT&S, LG Innotek, Shinko and Toppan are also advancing related production base construction or high-end substrate business initiatives.
These expansion plans indicate that the global ABF industry is entering a new phase of capacity construction. What truly affects supply and demand, however, is not merely the number of new fabs but whether manufacturers can achieve mass production of high-end products on schedule, steadily improve yields and meet the manufacturing requirements of AI chips for large-size, high-layer-count substrates.
V. The ABF Substrate Demand Structure Is Undergoing a Fundamental Shift, with AI Servers and High-Speed Networking Chips Becoming Core Drivers
The ABF substrate industry is undergoing a structural transformation from PC-dominated demand to AI data center-dominated demand. In 2015, PC-related applications accounted for approximately 70% of the market value corresponding to global ABF substrate demand, while the share of servers, AI accelerators and networking chips was relatively low. With the development of cloud computing, AI training, AI inference and high-speed network infrastructure, the primary application areas for ABF substrates have changed markedly. The report estimates that the PC-related share has fallen to approximately 23% in 2025 and will decline further to below 10% by 2030, while the combined share of servers, AI GPUs, AI ASICs and networking-related applications is expected to exceed 80%.
This shift reflects the increasing concentration of ABF substrate applications in chips requiring higher performance and more complex packaging. Compared with traditional PC processors, AI GPUs and large ASICs typically require higher-density signal interconnects, more complex power delivery networks and larger packaging substrate areas. At the same time, high-speed switch chips, network processors and server CPUs within AI data centers are also steadily increasing demand for high-end FC-BGA substrates.
As a result, the future development of the ABF substrate industry will depend increasingly on high-end applications such as AI servers, custom ASICs, high-performance CPUs and high-speed network processors. As AI computing gradually expands from training to large-scale inference, ABF substrates will need to continuously meet the requirements for higher interconnect density, more complex packaging structures and more stringent manufacturing precision.
VI. ABF Substrate Capacity Expansion Faces Long Construction Cycles, with High-End Manufacturing Capability Becoming a Key Supply Chain Constraint
Although the global ABF substrate industry has already launched large-scale capacity construction, medium- to long-term demand forecasts suggest that announced expansion plans may still be insufficient to fully cover future growth in high-end substrate demand.
Compared with traditional packaging substrates, high-end ABF substrate manufacturing involves more build-up layers, more complex fine-line patterning and more stringent requirements for layer-to-layer alignment and dimensional control. As substrate areas expand and routing layer counts increase, the number of process parameters requiring control during production also grows more complex, potentially further affecting production cycles and final yields.
At the same time, new fabs must go through multiple stages—including equipment installation, process debugging, customer qualification and capacity ramp-up—before achieving stable mass production. A newly built fab therefore does not immediately translate into high-end ABF substrate supply capability. For the large-size, high-layer-count substrates used in AI GPUs, ASICs and high-performance server CPUs, stable manufacturing processes and consistent production are particularly critical.
The future ABF substrate supply chain also faces uncertainties on multiple fronts, including shifts in actual AI server demand, the pace of new capacity commissioning by major manufacturers, the supply of key materials such as T-glass, and potential architectural changes arising from new packaging technology routes such as CoWoP.
The ABF substrate industry must therefore place greater emphasis on coordinating capacity planning with technological capability enhancement—optimizing manufacturing processes, improving production stability and enhancing effective output to meet the continuously upgrading packaging requirements of AI chips.
VII. The Competitive Focus of the ABF Substrate Industry Is Shifting from Capacity Scale to High-End Manufacturing Capability and Alignment with AI Chip Packaging Demand
The important changes in the ABF substrate industry over the coming years go beyond the scale of global fab expansion; they involve a simultaneous upgrading of the industry’s demand structure, product complexity and manufacturing capability requirements. As AI GPUs, custom ASICs and server CPUs advance toward higher computing performance, larger package sizes and more complex interconnect architectures, substrate manufacturers must possess the capability to produce large-size, high-layer-count, high-complexity FC-BGA substrates while continuously improving effective capacity and production consistency.
From a global industry layout perspective, Unimicron, Nan Ya PCB, Kinsus, Ibiden, Samsung Electro-Mechanics, AT&S and other companies are expanding high-end substrate supply capability through new fab construction, existing line upgrades and customer collaboration. Some substrate manufacturers are also strengthening long-term technical cooperation with major global semiconductor companies to plan in advance the substrate specifications, manufacturing processes and mass production capability required for next-generation AI processors.
In the future, technological competition in the global ABF substrate industry will increasingly center on high-end product manufacturing capability, new capacity commissioning timelines, production efficiency, process stability and the degree of alignment with customer requirements. Particularly as AI chips continue to advance toward higher computing power, more complex packaging and higher interconnect density, ABF substrates are no longer merely a supporting element of traditional packaging materials but an important component affecting the scalable manufacturing capability of high-performance chips.
Summary
How AI GPUs and ASICs are driving ABF substrates toward larger sizes, higher layer counts and higher-density interconnects, and how major global FC-BGA substrate manufacturers are responding to the new wave of AI computing demand through equipment and process upgrades, manufacturing capability enhancement and capacity deployment.
The key to the future development of the ABF substrate industry lies not only in how many substrates can be produced but in whether high-end substrates meeting the packaging requirements of next-generation AI chips can be manufactured reliably.
*This article was translated from the original Chinese article published by 芯联汇 on WeChat. Original link: https://mp.weixin.qq.com/s/fiFLEDHTkNTcubpXhXBvHA