High-End ABF Substrate Shortage Intensifies Due to Massive AI Chips: Taiwanese Makers & Equipment Suppliers Face Fierce Competition

September 6, 2026

Medium (by Julien Nauy) International

Overview

The high-end ABF (Ajinomoto Build-up Film) substrate market for AI chips faces a severe supply shortage, reflecting a ‘re-evaluation of manufacturing difficulty’ distinct from traditional ABF markets. AI chips demand 2.6 to 3 times larger substrate areas and 12 to 18+ layers, making yield maintenance a critical challenge. Taiwanese manufacturers like Unimicron, Nan Ya PCB, Kinsus, and Zhen Ding, along with related equipment suppliers, are intensely competing in this high-growth sector.

In Depth

Key Findings

The high-end ABF (Ajinomoto Build-up Film) substrate market for AI chips is experiencing a severe supply shortage, which is not merely due to increased demand but rather a structural issue stemming from a ‘re-evaluation of manufacturing difficulty.’ AI chips require 2.6 to 3 times larger substrate areas and 12 to 18 or more layers compared to conventional CPUs or GPUs. This dramatically increases manufacturing complexity, making the maintenance of high yields exceptionally challenging. Consequently, leading Taiwanese manufacturers such as Unimicron, Nan Ya PCB, Kinsus, and Zhen Ding, along with their associated manufacturing equipment suppliers, are engaged in fierce competition within this high-barrier, high-end ABF market.

Technical & Clinical Details

ABF substrates are indispensable laminated substrates for high-performance semiconductor packaging, widely utilized in Flip-Chip Ball Grid Array (FC-BGA) packages. For AI chips, which require tight integration of GPUs and HBM (High Bandwidth Memory), substrates must be larger, have more layers, and feature finer wiring (line width/space: L/S). For instance, while traditional ABF substrates typically have fewer than 8 layers, AI chip variants commonly require 12 to over 18 layers.

The increase in layer count and area exacerbates challenges such as alignment precision in multilayer wiring formation, accuracy in via hole processing, and the reliability of electrical connections between layers. Furthermore, large substrates are prone to greater warping and dimensional changes during manufacturing, which is a major contributor to yield loss. Process control equipment manufacturers like KLA and Onto Innovation provide high-precision inspection, metrology, and defect detection solutions to address these issues and improve yields. Unimicron, for example, has approved additional capital expenditure, focusing 80-85% on ABF substrates, and has significantly increased pre-orders for critical equipment for 2027-2028, signaling a strong commitment to AI chip ABF substrate manufacturing.

Background & Context

The explosion of AI demand has had a widespread impact across the entire semiconductor manufacturing supply chain, with bottlenecks sequentially shifting from front-end processes to packaging, substrates, and materials. Amidst persistent shortages in TSMC’s CoWoS (Chip-on-Wafer-on-Substrate) packaging and soaring HBM demand, the supply of high-functional ABF substrates has also become a critical issue. AI server vendors like Dell have identified ABF substrate shortages as a major source of supply chain tension, impeding the deployment of AI infrastructure. This situation exemplifies how Taiwan’s semiconductor packaging ecosystem is adapting to the AI boom, highlighting the increasing strategic importance of not only OSATs (Outsourced Semiconductor Assembly and Test) but also substrate manufacturers.

Strategic Significance & Outlook

The shortage of high-end ABF substrates is likely to persist as AI chip evolution continues. The introduction of new upstream materials like T-Glass (glass substrates) will further enhance ABF substrate performance and alter manufacturing difficulties. In this market, stable supply chain establishment and risk management, alongside technological innovation, will be key to success. While Taiwanese manufacturers aim to maintain their competitive edge in this high-end market, leveraging years of experience and technical prowess, strong competitors like Japan’s Ibiden and Shinko Electric, South Korea’s Samsung Electro-Mechanics, and Austria’s AT&S also exist. The expansion of AI computing will fundamentally reshape the cooperative dynamics of the entire semiconductor supply chain.

Source: https://medium.com/@JulienNauy/ai-substrates-are-not-all-in-short-supply-taiwans-real-high-end-abf-race-04cdff72e30a

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