ABF substrate and materials tightening
AI-driven demand for larger, higher-layer substrates is tightening ABF substrate supply and stressing upstream materials like glass fiber cloth, copper foil and drill bits. Industry reports expect a multiyear upcycle as server and optical-communications platforms ramp, which means longer lead times and firmer pricing for boards and substrate-related components. That dynamic turns a high-end AI squeeze into practical headaches for commodity categories that feed into industrial and communications hardware. (digitimes.com) (digitimes.com)
The shortage is not starting with chips. It is starting with the thin board underneath the chip, and that board is suddenly becoming one of the hardest parts of an artificial intelligence server to buy. That board is called a substrate. It is the layer that fans thousands of tiny chip connections out into paths the rest of the system can actually route, the way a highway interchange spreads one packed stream of cars into many lanes. For many high-performance processors, the insulation material inside that substrate is Ajinomoto Build-up Film, a resin film first adopted for advanced processor packaging in the late 1990s and still used in most high-end central processing units today. Artificial intelligence chips are pushing that substrate to get bigger and denser at the same time. DIGITIMES reported on April 8 that new central processors, graphics processors, and application-specific integrated circuits are all demanding larger substrate area and more layers. That sounds like a niche packaging problem until you look at what goes into making one. More layers mean more lamination cycles, more drilling, more copper, and tighter control over warping, so the squeeze moves upstream into glass fiber cloth, copper foil, and drill bits. Copper foil is not generic sheet metal in this market. Suppliers like Mitsui and Taiwan Copper Foil sell very low profile foil specifically for servers and communications hardware because smoother copper helps high-speed signals move with less loss. Glass fiber cloth is doing a different job. It is the woven skeleton inside laminates that keeps boards stiff and dimensionally stable, and higher-end grades are prized because fast boards bend and expand less when heat and signal speeds rise. The immediate reason this is tightening now is server buildout. Nvidia says one GB200 NVL72 rack links 36 Grace central processors and 72 Blackwell graphics processors, which is the kind of dense system design that multiplies packaging and board complexity across a single rack. Board makers are already telling investors the order visibility is stretching out. Zhen Ding said in its March 2026 investor presentation that demand is strong in artificial intelligence servers, optical communications, and integrated circuit substrates, and that 2026 marks the start of a new high-growth cycle. Zhen Ding also said its 2026 capital spending will exceed NT$50 billion as it builds ten new facilities in Huai’an and Thailand in phases tied to customer orders. Companies do not commit that kind of money unless customers are signaling that the bottleneck will last longer than one product cycle. That is why a shortage in a premium artificial intelligence package shows up in much plainer categories. If substrate shops consume more high-grade copper foil, glass cloth, and drilling capacity, industrial gear, communications hardware, and other board buyers end up waiting longer and paying firmer prices for parts that used to feel interchangeable.
