Ibiden Commits ¥500 Billion to ABF Substrates for AI Servers, Anticipating Supply Crunch Beyond 2028

August 17, 2026

MK Japan

Overview

Ibiden, the world’s leading AI substrate manufacturer, announced a ¥500 billion investment from this year to 2028 to expand production capacity for IC package substrates for AI and high-performance servers. Despite long-term contracts securing ABF substrates until 2028, customers are pushing for accelerated capacity expansion and joint investments, fearing shortages in 2029 and 2030. Strong ABF demand has also led to a surge in orders for vacuum laminate equipment, impacting related companies like Eternal Precision Mechanics.

In Depth

Key Findings

Ibiden, the world’s leading manufacturer of AI substrates, has unveiled plans for a substantial investment of ¥500 billion (approximately $3.2 billion USD) from this year through 2028. This capital injection is dedicated to significantly expanding its production capacity for IC package substrates tailored for AI and high-performance servers, directly addressing the critical supply shortage of ABF (Ajinomoto Build-up Film) substrates driven by the exponential growth in AI demand.

Technical / Clinical Details

ABF substrates are indispensable as insulating materials in high-performance semiconductor packages, enabling numerous wiring layers and intricate circuit formation, particularly for AI chips and high-performance CPUs/GPUs. Modern high-performance semiconductors demand more cores and higher I/O densities, necessitating larger and more complex ABF substrates. Ibiden’s investment aims to bolster production lines for these advanced ABF substrates to meet surging demand. Despite customers securing ABF substrates through long-term contracts until 2028, concerns about supply tightness in 2029 and 2030 are driving them to actively request further accelerated capacity expansion and, in some cases, joint capital expenditures from substrate manufacturers, including Ibiden.

Background & Context

The evolution of AI is profoundly impacting the entire semiconductor industry, especially increasing the importance of back-end packaging technologies and their associated materials. ABF substrates are a critical component for 2.5D/3D packaging solutions like TSMC’s CoWoS, and their potential as a bottleneck to maximizing AI chip performance has been widely noted. This robust demand has also led to a surge in orders for vacuum laminate equipment used in ABF substrate manufacturing, creating significant business opportunities for related equipment manufacturers such as Eternal Precision Mechanics, a subsidiary of Eternal Materials. Furthermore, TSMC executives have consistently highlighted ABF, alongside HBM memory, as one of the most severe shortages in the semiconductor industry, confirming Ibiden’s pivotal role as a major beneficiary in this landscape.

Strategic Significance & Outlook

Ibiden’s substantial investment is crucial for supporting the ongoing development of AI infrastructure. While this investment is expected to stabilize supply by 2028, AI demand is anticipated to remain robust beyond 2029, necessitating continued collaboration and investment across the industry. Key suppliers like Ajinomoto are also making efforts to stabilize supply, with plans to progressively expand ABF capacity by 2030 and a third factory under consideration for post-2030 demand. The stable supply of ABF substrates will be a decisive factor in the development and mass production of next-generation AI chips and is essential for enhancing the overall resilience of the semiconductor supply chain.

Source: https://www.mk.co.kr/en/business/12119467

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