Although IC substrates have been affected by the decline in the mobile phone and computer markets in the past six months, the growth momentum has slowed down. However, industry insiders who have observed the PCB field for a long time pointed out that IC substrates can still maintain double-digit growth in 2023. In terms of the proportion of output value, the growth rate can reach more than 15%. Looking forward to the market outlook, we are still optimistic about the development of the PCB field in 2023.
What is IC substrate?
The IC carrier is the packaging substrate, which is an indispensable part of the chip packaging process. The IC carrier board has the characteristics of high density, high precision, high performance, miniaturization and thinness, etc. Its main function is to carry chips and provide support, heat dissipation and protection for chips. IC substrate is the product of the development of chip packaging technology to the field of high-end packaging, and it is the key carrier of the packaging and testing link of the integrated circuit industry chain.
According to different packaging materials, IC substrates can be divided into rigid packaging substrates, flexible packaging substrates and ceramic packaging substrates. The main materials of rigid substrates are BT resin, ABF resin and MIS. ABF substrate material is a material dominated by Intel, which is used to produce high-end carrier substrates such as flip chips.
IC substrate has become the largest and fastest growing sub-sector in the PCB industry. According to statistics, the scale of 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 (about 147.4 billion RMB) in 2026, and the CAGR of IC substrates from 2021 to 2026 will be 8.6%.
High IC substrate industry market concentration
The market concentration of the IC substrate industry is relatively high. At present, companies from Japan, South Korea, and China Taiwan occupy an absolute leading position. According to statistics, in 2020, the world’s top 10 IC substrate market share is about 83%, among which the top 3 companies are Unimicron in Taiwan of China, Ibiden in Japan and Samsung Electro-Mechanics in South Korea, accounted for 15%, 11%, and 10% of the market share respectively.
The main suppliers of IC substrates in mainland China include Shennan Circuits, Fastprint Circuit, ACCESS, etc., and mainly have the mass production capacity of BT substrates. In addition, since 2019, some manufacturers mainly engaged in PCB products have also begun to invest in IC substrate projects.
From the perspective of supply and demand, there is still a gap between the output of packaging substrates in China and the demand, and there is a high dependence on imports. The localization of IC substrates is an urgent process.
The investment cycle of IC substrate projects is long, and the industry entry barriers are relatively high. The market share of manufacturers in mainland China is relatively low, especially in the field of high-end products such as ABF substrates, the localization rate is extremely low, and there is a huge room for replacement by mainland manufacturers.
Chiplet packaging technology
Chiplet packaging technology has injected new vitality into the growth of IC substrates. The rapid growth of the Chiplet processor chip market will lead to an increase in the demand for ABF carrier boards. Advanced packaging technology pushes up the consumption of ABF substrate production capacity, and products with high-end 2.5/3D IC technology will have the opportunity to enter the mass production stage in the future, which is bound to bring greater growth momentum.
QYR predicts that the global ABF substrate market sales will reach US$6.529 billion in 2028, with a CAGR of 5.56% from 2022 to 2028. It is estimated that the Chinese market will reach US$1.364 billion in 2028, accounting for 20.9% of the global market.
Judging from the competitive landscape of ABF substrates, Unimicron, Ibiden and AT&S currently account for a relatively high proportion, and their market shares in 2021 were 22%, 19% and 16% respectively. It is expected that the share of new entrants and other original small-scale suppliers will gradually increase.
According to incomplete statistics, currently related companies involved in IC substrates and their subdivided ABF substrates mainly include Fastprint Circuit and Shennan Circuits.
It is worth noting that the development of the IC substrate industry is closely related to downstream demand, and the demand for consumer electronics in 2022 was less than expected, which had a greater adverse impact on the industry. In addition, high-end IC substrates are still monopolized by South Korea and Japan, and many companies in mainland China are actively developing and expanding production. The pace of product development, production, and verification is related to the speed of localization of high-end products.