Key Findings
Unimicron Chairman S.C. Chien reports significant supply chain constraints affecting IC substrates. Lead times for over 80% of key equipment have lengthened, with more than 20% of that equipment seeing delays exceeding double their original lead times; some lead times have reached 30 months. Regarding materials, a 20% supply shortfall is projected for 2027, specifically impacting ABF, copper-clad laminates (CCL), and low-CTE glass fiber cloth.
Technical Details
The technical demands on substrates are escalating as AI chip sizes grow. Substrate sizes expanded from roughly 1x reticle size in early designs to 3x in 2025, with targets of 5x for 2026 and 5–9x by 2027–2028, potentially reaching 12–14x. This scaling introduces several engineering hurdles:
- Power and Signal Integrity: AI chips can draw currents exceeding 1,000 amperes, increasing demands on thermal management, power integrity, and high-speed signal transmission.
- Manufacturing Yields: Stringent fine-line requirements for larger substrates may exceed the capabilities of individual makers. For example, Intel’s EMIB substrate yields recently reached approximately 45%, with targets of 50% by 4Q26 and 60% by 1Q27.
Background and Context
These constraints emerge from a disparity in capacity expansion rates across the AI supply chain from 2024 to 2028. While hyperscaler capex is projected to grow 6.3-fold and CoWoS capacity 6.8-fold, IC substrate capacity is expected to merely double, and DRAM capacity is projected to expand 1.8-fold.
Significance and Outlook
As GPU-HBM platforms and custom ASICs evolve, IC substrates and PCBs are shifting from specification-based components to critical drivers of system-level performance. While different capacity bases mean growth multiples do not always equal shortages, the emergence of DRAM and substrate shortages in 2025 and 2026, combined with prolonged equipment lead times, complicates the industry’s ability to synchronize capacity expansion.
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