Package substrate is the carrier of semiconductor chip packaging, which can provide electrical connection, protection, support, heat dissipation, assembly and other functions for the chip, so as to achieve the purpose of multi-pin, reduce the volume of packaged products, improve the electrical performance and heat dissipation, ultra-high density or multi-chip modularization.
In recent years, package substrates have been the fastest-growing sub-sector in the PCB industry, but the decline of the package substrate market in 2023 seems to have gained industry consensus.
Semiconductor package substrates market meets risks
Since 2019, with the rapid development of advanced packaging technology, the semiconductor package substrates market demand as upstream materials has also shown rapid growth. According to the relevant data. From 2019 to 2022, the global package substrate market doubled from US$8.139 billion to US$17.415 billion.
However, due to the sluggish demand in the terminal market and the sharp decline in the prosperity of the semiconductor industry, the semiconductor package substrate industry is also facing headwinds. According to relevant estimates, the output value of package substrates in 2023 will be 16.073 billion US dollars, which will decline by 7.71% compared with 2022.
Industry associations have also pointed out that with the reversal of the business in the second half of 2022, the consumption-based BT substrates will first grow weaker, and and that the growth of high-speed computing related ABF substrates will also be affected by increasing market uncertainty. In 2023, the impact of the board on the overall output value of the global PCB industry is expected to weaken.
According to industry insiders, at present, both BT substrates and ABF substrates are already in oversupply. There is also news in the industry that a Japanese package substrate manufacturer is cutting prices to win orders. Therefore, packaging substrate manufacturers, including Arcelik, Ibiden, Shennan Circuits, Shenzhen Fastprint Circuit Tech, Unimicron, and Kinsus,have reduced the capacity utilization rate of the company, and their performance is not good.
ChatGPT drives long-term demand for ABF substrates
After the explosion of ChatGPT, when the consumer electronics terminal markets such as smartphones, PCs, and TVs have not yet shown signs of recovery, the explosion of the AI chatbot ChatGPT opened the prelude to the commercial application of AI, and instantly promoted the development of GPU, etc. The AI chip market is expected to drive the long-term demand of the ABF substrate market.
As major Internet giants have intensively disclosed the progress of large-scale model technology and ChatGPT-like project plans, the model training of generative AI technology requires a large amount of data resources and computing resources, which may drive a new round of continuous growth in the market demand for AI servers, and drive the GPU market to enter the boom cycle earlier.
According to relevant predictions, to process the GPT-3.5 large-scale model with 180 billion parameters, the number of GPU chips required is as high as 20,000. In the future, the number of GPU chips required for the commercialization of GPT large-scale models will even exceed 30,000. There is no doubt that the development of generative AI technology will become a new driving force in the GPU market, which in turn will drive the long-term demand of the ABF substrate market.
According to relevant predictions, the number of GPU chips needed to process 180 billion parameters of GPT-3.5 large model is as high as 20,000, and the number of GPU chips needed for the commercialization of GPT large model in the future will even exceed 30,000. There is no doubt that the development of generative AI technology will become a new driving force in the GPU market, thus driving the long-term demand of the ABF substrate market.
At present, since Chinese mainland substrate manufacturers are still in the stage of catching up with technology in terms of ABF substrates, packaging and testing manufacturers currently mainly purchase ABF substrates from Japanese, Korean and Taiwanese substrate manufacturers. However, Chinese mainland package substrate manufacturers such as ACCESS, Shennan Circuits, and Shenzhen Fastprint Circuit Tech are all making efforts to ABF substrates, and the progress is relatively rapid.
It is expected that market demand will gradually recover in the second half of 2023 or 2024. It is also estimated that the package substrate industry will resume growth from 2024, and the package substrate market is expected to reach $22.286 billion in 2027, with a compound growth rate of 5.1%.