ABF substrate capacity fills through 2028

ABF substrates have moved from a specialist packaging input to a supply-chain choke point for AI chips. DigiTimes reported on August 5 that Nvidia, AMD and hyperscale cloud companies are locking in Ajinomoto Build-up Film, or ABF, substrate capacity through 2028 as AI-chip demand tightens supply. The report said customers are also pressing suppliers to plan new expansion for 2029 and 2030. That puts substrates in the same risk bucket as other AI infrastructure constraints, including optics and network components. ### What exactly is getting scarce? ABF substrates are the package substrates that connect advanced chips to the main circuit board while handling dense wiring and high-speed signals needed by GPUs, CPUs and AI accelerators. DigiTimes said the current squeeze centers on ABF capacity because AI processors are consuming more advanced substrate area and customers are reserving output years ahead. Unimicron, one of the major substrate makers tied to AI demand, said in its late-July earnings call that ABF utilization was above 90%. (apps.digitimes.com) The company also raised its 2026 capital spending to NT$53.7 billion, according to a summary of that call. ### Why are AI chips pulling so much more substrate? AI processors use larger packages, more layers and more complex interconnects than many mainstream chips. Kinsus said in an April earnings call that revenue growth was being driven by high-layer-count ABF substrates tied to AI high-performance computing demand. (apps.digitimes.com) A separate market report last week said analysts estimate ABF demand area could grow at a 39% compound annual rate from 2025 to 2028 as AI chips integrate more high-bandwidth memory and larger package formats. (finance.biggo.com) Ibiden, another major supplier, said on August 4 that first-quarter performance was driven by demand for GPUs, high-end CPUs and AI-related semiconductor package substrates. The company also raised its outlook, according to filings and reports based on those disclosures. ### Who is locking up supply? DigiTimes named Nvidia, AMD and hyperscalers as the buyers securing ABF capacity through 2028. The report said those customers are reviving co-investment arrangements, including equipment funding and expansion discussions, to secure supply beyond current build plans. (finance.biggo.com) A July 31 DigiTimes item separately said long-term supply deals were already tying up ABF and BT substrate capacity through 2028. (ibiden.com) That report referred to customer commitments around Leading Technology, the IC substrate arm of Zhen Ding Technology Group. ### Why does this matter beyond substrate makers? Reuters reported on August 5 that the Trump administration is drafting a measure that would bar U.S. imports of new models of Chinese optical transceivers used in data centers. (apps.digitimes.com) Chinese optical-module shares fell after that report, underscoring how AI hardware buyers are now managing multiple bottlenecks at once across packaging, optics and network gear. (apps.digitimes.com) The result is that chip output is no longer only a wafer or foundry question. Customers now have to line up packaging materials, substrate slots, memory and networking components early enough for systems to ship on schedule, according to the DigiTimes and Reuters reports. ### What should readers watch next? August earnings disclosures from Ibiden, Unimicron and Kinsus are the next concrete markers for whether suppliers add capacity fast enough to ease the 2028 bottleneck. (msn.com) DigiTimes said the current planning window has already shifted to 2029 and 2030, so future capex announcements, customer prepayments and equipment orders will show where new ABF supply is being built. (ibiden.com) (apps.digitimes.com)