Since 2026, the supply-demand imbalance in the AI computing hardware supply chain has been spreading downstream from GPUs and HBM to packaging substrates. ABF substrates—the core packaging platforms for high-end AI GPUs, ASICs, and CPUs—are expected to face a supply gap that will widen to 42% by 2028. Institutions such as Goldman Sachs have assessed the supply crunch as "more persistent than memory." In a May 2026 report, Morgan Stanley revised its forecast for the 2030 high-end ABF substrate supply gap from 15% to 22%, signaling that the industry has entered a prolonged period of tight supply. Upstream, Ajinomoto of Japan dominates about 95% of the global ABF film market. New pricing will take effect in Q3 2026, with a projected 30% price hike. Meanwhile, Nan Ya PCB—a key player in the substrate supply chain—reported May revenue of NT$4.44 billion, up 35.82% year-over-year, further confirming the structural boost AI computing is giving to the substrate industry. The underlying logic: AI chip packaging requirements have reached unprecedented complexity, and the supply chain’s capacity expansion pace cannot keep up with demand growth.
Why ABF Substrates Have Become the Bottleneck in the AI GPU Supply Chain
ABF substrates refer to FC-BGA (flip-chip ball grid array) packaging substrates that use ABF (Ajinomoto Build-up Film) as the insulating material. They are the core physical platforms for packaging AI GPUs, ASICs, and high-end CPUs.
On the demand side, AI computing is driving a structural increase in packaging requirements. Traditional PC chips require ABF substrates with 4 to 6 layers, while high-end AI chips now need 8 to 16 layers. The chip area has grown significantly, causing each chip’s ABF substrate consumption to rise 5 to 10 times compared to legacy products. Morgan Stanley has also revised its AI ASIC demand models upward, raising projections for Google, AWS, Meta, and Chinese in-house chips. By 2030, AI-related high-end ABF demand is expected to account for about 75% of total high-end substrate demand.
On the supply side, multiple factors are constraining output. ABF substrate capacity expansion cycles are long—2.5 to 3 years—and major manufacturers won’t be able to release significant new capacity until after 2028. The core material, ABF film, is monopolized by Ajinomoto, which holds about 95% of the global market. Its new plant won’t come online until 2032, so supply pressure will not ease in the short term. The ultra-low-loss glass fiber cloth required for advanced substrates is also in short supply. According to industry surveys, persistent shortages of T-glass have delayed some substrate manufacturers’ capacity expansion plans by 6 to 12 months.
Supply-Demand Gap Forecast: Goldman Sachs’ Logic
In its February 2026 ABF substrate report, Goldman Sachs provided a phased forecast for the supply gap. The report predicts that ABF substrate supply will become increasingly tight month by month, with the supply-demand gap reaching 10% in the second half of 2026, expanding to 21% in 2027 and 42% in 2028. The shortage cycle is expected to last "longer than memory." The report also raised the target prices for three Taiwanese substrate manufacturers—Nan Ya PCB, Kinsus, and Unimicron—with Nan Ya’s target price rising from NT$340 to NT$655, an increase of about 93%.
Trends in High-End ABF Substrate Supply-Demand Gap for AI GPUs, 2026–2028
Goldman Sachs’ assessment is based on two core factors. First, tight supply of T-glass will limit substrate shipments in 2026. Most suppliers, having experienced industry downturns, remain cautious about large-scale capital expenditures due to tight cash flow, so significant new capacity is unlikely before the second half of 2027. Second, AI server demand is growing at over 40% annually. AI GPU/ASIC substrate sizes are expected to increase 2.5 to 4 times over the next two years. As package sizes expand, the substrate area consumed per chip will rise sharply.
This supply gap trend echoes the shortages of 2020, when ABF substrate prices rose 20% to 30% year-on-year. Goldman Sachs therefore believes the ABF substrate industry has entered a new upcycle, with sustainable price increases ahead.
Global ABF Substrate Competitive Landscape: Differentiated Strategies of Three Major Players
The competitive landscape of the global high-end AI substrate market is consolidating rapidly. According to Unimicron’s public industry outlook in June 2026, only Unimicron and Japan’s Ibiden now have true high-end AI substrate supply capabilities. However, in the broader ABF substrate market, Nan Ya PCB also holds a key position thanks to its vertically integrated model, making these three companies the core suppliers of high-end ABF substrates.
Looking at the broader market, the main global ABF substrate manufacturers are Unimicron, Ibiden, Nan Ya PCB, Shinko Electric, and AT&S. The top five account for about 74% of the global market, with Unimicron leading at around 22%.
Competitive Comparison of the Three Leading Global ABF Substrate Manufacturers (2026)
| Dimension | Unimicron | Ibiden (Japan) | Nan Ya PCB |
|---|---|---|---|
| Global Market Share | ~22% (largest globally) | ~30% | Rapid catch-up with AI growth |
| 2026 CapEx | NT$34 billion (three increases) | JPY 500 billion (CNY 22.2 billion, FY2026–2028) | Higher than previous years, focused on debottlenecking |
| Core Competitive Edge | >70% ASIC substrate share, largest ABF supplier | 70–80% in high-end AI GPU segment, key NVIDIA/Intel supplier | Vertical integration (copper foil, glass fiber, CCL to substrate), cost advantage |
| Main AI Customers | NVIDIA, AMD, Broadcom, etc. | NVIDIA, Intel, AMD, etc. | Leading global AI chipmakers (including a major US client) |
| AI-Related Revenue Share | ~60% | High-end AI substrates as core, rising share | Surpassed 50% |
| Key Production Lines | Guangfu No.2, Yangmei No.2 | Kawajima (mass production FY2027), Ono (2.5x capacity by 2028) | Advanced products mass production in H2 2026 |
| Long-Term Contract Coverage | Long-term contracts cover 80–90% of Guangfu No.2/Yangmei No.2 future capacity | Mainly long-term supply agreements | Higher share of non-LTA, more price sensitive |
| Capacity Ramp-Up | H2 2027 to 2028 | From FY2027 | From H2 2026 |
Data sources: Unimicron 2026 investor conference & Yuanta Securities report; Ibiden board announcement, Feb 4, 2026; Nan Ya PCB May 2026 financials & industry analysis.
Unimicron is the most aggressive in expanding capacity during this AI boom. Its 2026 capital expenditure has been raised to about NT$34 billion, a record high, with roughly 70% allocated to ABF substrate expansion and process upgrades. Lead times for exposure and electroplating equipment have stretched to 14 months. Unimicron holds over 70% share in the ASIC substrate market, giving it a clear lead with ASIC customers. Its main production bases are running at full capacity, with 2026 average utilization expected to stay around 90%. Guangfu No.2 and Yangmei No.2 are the core new capacity sites: the former has completed construction and is installing equipment, aiming for limited production in H1 2027; the latter is set to ramp up from H2 2028. Notably, almost all new capacity has already been locked in by customers through long-term contracts—covering 80–90% of Guangfu No.2 and Yangmei No.2’s future capacity for up to five years. In terms of order visibility, AI-related revenue share reached about 60% in 2026, with full-year revenue likely to hit a record high.
Japan’s Ibiden is the global technology leader in ABF substrates, with about 30% market share and serving as a core supplier to NVIDIA, Intel, and other AI chipmakers. In the high-end AI GPU substrate segment, industry analysis puts Ibiden’s share at around 70%. The company plans to invest about JPY 500 billion (CNY 22.2 billion) from FY2026 to FY2028—its largest expansion ever—to boost AI substrate capacity to 2.5 times the 2024 level. About JPY 220 billion will go to upgrading the Kawajima plant (originally dedicated to Intel, now a multi-client high-performance substrate line), with mass production starting FY2027. Another JPY 280 billion is for the Ono site, which began producing AI server substrates in October 2025. Ibiden is known for its deep technical barriers in the high-end market, especially in mSAP processes and yield control for 30+ layer ABF substrates.
Nan Ya PCB stands out for its differentiated competitive edge. As a subsidiary of Nan Ya Plastics, it is vertically integrated from copper foil and glass fiber to ABF and BT substrates, giving it a natural cost advantage. Nan Ya PCB plans to launch high-end IC substrate capacity in 2026 and is steadily upgrading to more advanced products. In May 2026, its single-month revenue hit NT$4.44 billion, up 35.82% year-on-year. ABF substrates now account for 55–60% of its business, with AI and HPC-related applications exceeding 50% of revenue. Its 2026 capital expenditure is significantly higher than in previous years, focusing on debottlenecking, new process development, and production line upgrades, with total investment likely to surpass the 2022 peak. While the Taiwanese ABF substrate market is currently led by Unimicron and Kinsus, Nan Ya PCB’s vertical integration model is emerging as a unique competitive advantage as high-end AI applications accelerate.
Upstream Material Bottlenecks: The Dual Squeeze of Ajinomoto and T-Glass
The upstream material structure for ABF substrates is highly concentrated, forming the most challenging supply constraint.
ABF film is the core insulating layer for ABF substrates, with Ajinomoto controlling about 95% of the global market. Although Ajinomoto has announced a third plant, it is not expected to come online until 2032, meaning new ABF film capacity will be extremely limited for the next five years. According to industry sources, Ajinomoto has notified customers of a new ABF film price effective in Q3 2026, with a projected increase of up to 30%.
Beyond ABF film, T-glass is another critical bottleneck. T-glass is an ultra-low-loss glass fiber cloth used as a dielectric layer in high-end AI substrates, mainly supplied by a few companies such as Nitto Boseki. Due to the difficulty of expanding production and long equipment lead times, T-glass supply remains tight. Industry surveys indicate that some substrate manufacturers have had to delay capacity expansion plans by 6 to 12 months. On top of this, advanced ABF substrates have strict requirements for material strength and thermal expansion, so shortages of upstream materials continue to constrain midstream substrate capacity.
Supply Chain Transmission and Industry Landscape Shifts
Tight ABF substrate supply is having a systemic impact on the entire AI hardware supply chain.
On the demand side, Morgan Stanley expects AI-related high-end ABF demand to reach 75% of the total by 2030. Goldman Sachs estimates AI server demand is growing over 40% annually, and by 2028, AI applications will make up nearly half of total ABF demand. The rapid expansion of TSMC’s CoWoS packaging capacity is also forcing substrate suppliers to accelerate their own expansion, but substrate makers are still lagging behind the advanced packaging buildout at foundries. This means overall AI chip shipments will be rigidly constrained by ABF substrate supply for the foreseeable future.
On the competitive front, this shortage cycle is increasing market concentration among the top players. All three core manufacturers are making heavy capital investments in 2026, but their capacity ramp-up timelines differ. Unimicron’s new capacity will come online mainly from the second half of 2027 to 2028; Ibiden’s Ono plant will reach 2.5x target capacity by 2028; Nan Ya PCB plans to mass-produce advanced products starting in the second half of 2026. Overall, new industry capacity from 2026 to 2028 will be limited, and the tight supply-demand dynamic is unlikely to fundamentally reverse in the medium term.
In terms of pricing power, this shortage cycle is similar to the 2020 supply crunch, when ABF substrate prices rose 20% to 30% annually. Analysts believe prices have further upside in this cycle as well. However, with many substrate suppliers having signed long-term supply agreements (LTAs) with customers, some manufacturers’ pricing flexibility is somewhat constrained.
How to Participate in the ABF Substrate Supply Chain via the Stock Market
For investors focused on the semiconductor supply chain, the structural supply-demand gap in ABF substrates offers a new perspective for AI hardware investment.
The US and Hong Kong stock markets provide direct access to core ABF substrate companies. As of June 1, 2026, Gate has officially launched real stock trading services. Users can use USDT to buy stocks and ETFs listed on major US exchanges such as NYSE and Nasdaq, as well as stocks listed on the Hong Kong Stock Exchange, with fractional shares available from as little as 0.01 share—effectively lowering the barrier to US stock investment.
Conclusion
The widening supply-demand gap for ABF substrates reflects how the AI computing boom is permeating the upstream and midstream segments of the semiconductor supply chain at an unprecedented pace. The structural shift of high-end packaging substrates from "behind-the-scenes support" to "core bottleneck" is not just a result of capacity shortages, but also a manifestation of technological advancement outpacing the supply chain’s ability to respond. Goldman Sachs’ 42% gap forecast for 2028, Morgan Stanley’s upward revision to 22% for 2030, and the simultaneous large-scale capital expenditures by the three leading manufacturers in 2026 all point to a common trend: ABF substrates have entered a multi-year period of persistent supply tightness.
In this AI-driven cycle of semiconductor material upgrades, assessing the ABF substrate supply chain requires close attention to two core variables: breakthroughs in upstream materials (the pace of ABF film and T-glass capacity expansion) and midstream capacity ramp-up (construction progress at the three major manufacturers). The timing of supply gap narrowing, shifts in high-end product penetration, and the impact of long-term contracts on pricing flexibility will continue to shape the competitive landscape of the substrate industry. For investors participating in this trend through financial markets, understanding the supply-demand structure and competitive dynamics of ABF substrates is essential to capturing the main investment theme in AI computing hardware.
