News briefing 
 

AT&S, a PCB and IC substrate manufacturer, announced in June that it will invest an amount of 1.7 billion euros (about NT$ 57.5 billion) to build a new production base for ABF substrate in Southeast Asia. The construction period is from 2021 to 2026. 

Impact analysis 
 

With the rise of applications such as 5G, AI, IoT, and Big Data, the demands for HPC chips have increased while the related chip packages also require ABF substrate. Because ABF production requires higher technical thresholds as well as high-end equipment and materials, these related supporting facilities are most likely to bring about the expansion of investments requiring billions in funding. As such, this scenario has caused ABF substrate manufacturers to adopt rather conservative strategies in the previous few years. Furthermore, it was not until the second half of last year before manufacturers confirmed strong market demands for ABF substrate and began to unveil their investment projects one after the other. 

    

As we comb through the expansion projects announced by various ABF substrate manufacturers so far, manufacturers in Taiwan, Japan, and Europe have shown their vigorous attitudes given that they have to strive for their market share in the wave of ABF competition (viewed from a regional perspective). As such, the total amount of investment in 2021 should have reached a scale of NT$ 40 to NT$ 50 billion. Currently, however, only Daedeok Electronics of South Korea has made some small-scale investments, while Samsung Electro-Mechanics and LG Innotek, major benchmark manufacturers, have yet to disclose any specific news. Because of this, the production capacity will be gradually revealed in 2022 as we further analyze the expansion timetables of every manufacturer. Most of all, it is imperative that the market should continue to note the shortage scenario for ABF at least until 2023.