Recently, Samsung Electro-Mechanics, the substrate manufacturer of Samsung Electronics, plans to develop more ABF substrate applications. According to the company, it is optimistic about the automotive demand for servers this year. Samsung Electro-Mechanics pointed out that the demand for some applications such as mobile phones and personal computers is expected to decline this year, but the high-end substrate market for servers and automobiles will continue to grow.
Market research firm Yole Intelligence also believes that as new advanced IC substrate practitioners begin mass production, the global advanced IC substrate business is expected to record a record revenue of US$29 billion in 2027 in the golden period of the next five years.
Yole Intelligence released its latest annual report “Status of the Advanced IC Substrate Industry 2022”, focusing on three platforms of advanced IC substrates: advanced IC substrate, circuit board SLP and ED.
According to Yik Yee Tan, senior technology and market analyst at Yole Intelligence, “The global advanced IC substrate market value will grow from US$15.8 billion in 2021 to approximately US$29.6 billion in 2027, with a compound annual growth rate (CAGR) of 11%. This growth was primarily driven by high demand in the mobile and consumer, automotive and mobility segments, and telecom and infrastructure markets.”
IC substrate market
The IC substrate is driven by advanced packaging (AP)and baseband for flip-chip scale packaging (FC CSP), as well as 5G wireless equipment, high-performance computing (HPC), and graphics processing unit (GPU) for FC ball grid array (FC BGA), server and automotive industries. This market value is expected to grow from US$12.6 billion in 2021 to approximately US$24.3 billion in 2027, at a CAGR of 12%.
Substrate-level printed circuit boards (SLP) are mainly used in high-end smartphones, with a revenue of US$3 billion in 2021 and will grow to US$4.3 billion by 2027, with a CAGR of 6.7%.
Embedded die (ED) in laminate substrates is relatively new to the market, but with a CAGR of 39%, it is expected to grow from $142 million in 2021 to about $1 billion in 2027.
The main substrate technology trend is the continued increase in complexity with larger size areas, more layers and finer pitches, and the use of semi-additive processes (SAP), modified SAP (mSAP) or advanced mSAP (amSAP) and other methods to reduce the line/width spacing (L/S). In recent years, the development of SLP technology has continued to be stable, and the goal of ED technology is to realize multi-chip embedding to serve more applications.
ABF substrate market
The ABF substrate market was approximately USD 4.8 billion in 2021. The world’s top 5 ABF substrate manufacturers are Ibiden, Unimicron, NYPCB, Shinko and AT&S, accounting for nearly 75% of the total ABF substrate market. Kinsus, SEMCO, Access, Daeduck, Toppan and Kyocera occupy the rest of the market.
IC substrate market, especially FC BGA market of ABF substrate is optimistic. Several companies have announced large-scale investments and capacity expansions of more than US$15.5 billion in 2021 and 2022. More investment will take place in Asia, with nearly 46% in China. The largest investor is Austrian AT&S, which focuses on FC BGA and aims to become the world’s top 3 IC substrate suppliers in the near future.
What is IC substrate?
The IC substrate is the packaging substrate, which is an indispensable part of the chip packaging process. The main function of the IC substrate is to carry the chip, provide support, heat dissipation and protection for the chip, in order to achieve multi-pin, reduce the size of the packaged product, improve electrical performance and heat dissipation, or multi-chip modularization. The IC substrate provides an electronic connection between the chip and the PCB motherboard, and plays the role of connecting. IC substrates can also embed passive and active components to achieve certain system functions.
According to different packaging materials, IC substrates can be divided into hard packaging substrates, flexible packaging substrates and ceramic packaging substrates. The main materials of hard substrates are BT resin, ABF resin and MIS, and the former two are the most widely used. BT resin substrate material has many advantages such as high heat resistance, moisture resistance, low dielectric constant and low dissipation factor, and occupies a high market share in the fields of semiconductor packaging, chip LED and high-frequency applications.
ABF substrate material is a material dominated by Intel in the 1990s, which is used to produce high-end carrier substrates such as flip chips. It has a large number of pins and a high transmission rate and is mainly used in large-scale high-end chips such as CPUs, GPUs, and chipsets.
Demand for packaging substrates is increasing, BT and ABF substrates have broad prospects
The demand for downstream semiconductors is strong, and the IC substrate industry continues to thrive. With the rapid development of servers, 5G, AI, big data, Internet of Things, intelligent driving and other fields, the demand for chips continues to grow, and the shortage of high-end chips continues to increase. As the core material, IC packaging substrates have become the largest and fastest growing sub-sector in the PCB industry. According to Prismark statistics, the global IC packaging substrate industry reached US$14.2 billion in 2021, a year-on-year increase of nearly 40%. It is expected to reach US$21.4 billion in 2026, and the CAGR of IC substrates from 2021 to 2026 will be 8.6%.
The expansion of memory chip scale drives up the demand for BT substrates
The downstream of BT carrier mainly includes memory chips, MEMS chips, RF chips, etc. Among them, storage is the largest downstream market for BT substrates. According to WSTS, the global memory chip market will reach US$167.5 billion in 2023. Benefiting from the recovery in demand for big data and cloud computing, global cloud vendors continue to increase capital expenditures.
In 2022Q3, Amazon, Google, Microsoft, and Meta have a combined Capex of approximately US$37 billion, a year-on-year increase of 19.6%. It is expected to drive the steady expansion of the memory chip market and drive the continuous growth of demand for BT substrates.
Server shipments are stable, building an incremental basic disk for ABF substrates
ABF substrates are suitable for high-performance computing chips such as CPUs, GPUs, FPGAs, and ASICs due to their advantages such as small line width and line spacing and many pins. After the COVID-19 pandemic, the global digitalization process has accelerated, and server shipments have continued to remain high. According to Counterpoint statistics, in 2022, global server shipments increased by 6% year-on-year, reaching 13.8 million units. Revenue increased by 17% year-on-year to US$111.7 billion, which is expected to drive continued high demand for ABF substrates.
The demand for high-performance and high-computing chips drive the demand for ABF substrates to increase
Benefiting from the vigorous development of new application fields such as cloud technology and AI, the demand for AI chips has surged, and the demand for ABF substrates has increased significantly. According to WSTS forecast, the global AI chip market will reach US$72.6 billion in 2025, with a CAGR of approximately 29% from 2021 to 2025.
In addition, leading consumer electronics manufacturer Apple has begun to shift from FC-CSP to FC-BGA, and its M1 and M2 chips have been packaged in FC-BGA. The AR product that plans to replace the iPhone in 10 years has also planned to use ABF substrates. According to Prismark’s forecast, FC-BGA is the largest and fastest-growing segment of the IC substrate industry. It is estimated that the global FC-BGA market will reach US$12.1 billion in 2026, with a CAGR of 11.52% from 2021 to 2026.
The construction of 5G infrastructure promotes the demand for ABF substrate
FPGA is the core component of 5G base station and terminal equipment, and is a major application field of ABF substrate. 5G private network refers to a dedicated network that achieves network signal coverage in a specific area and provides network communication services for specific users in the links of organization, command, management, production, and scheduling. According to Frost & Sullivan’s forecast, the scale of China’s 5G private network market is expected to be 16 billion RMB in 2022, and will reach 236.1 billion RMB in 2026, with a CAGR close to 100% from 2022 to 2026.
In the 5G era, FPGAs can be used for multi-channel signal beamforming. Massive MIMO technology increases the number of transceiver channels of 5G base stations from 16T16R to 64T64R or even 128T128R, so the usage of single-station FPGAs has increased significantly. As the global deployment of 5G continues to advance, the FPGA usage of base stations, IoT, terminal equipment, and edge computing will increase significantly, and the unit price of FPGA is expected to continue to increase. According to the prediction of Huajing Industry Research Institute, the global market size of FPGA will reach 12.58 billion US dollars in 2025, and the future growth rate is expected to remain above 10%.
