This Year in Semiconductors, Watch AI Substrates

This Year in Semiconductors, Watch AI Substrates

The substrate industry is back in the spotlight

 

  • Past
    Substrate = custom-order component
    → Customers set the unit price; suppliers had no bargaining power

 

  • Present
    Emergence of AI semiconductors + larger area, higher layer count, finer circuits
    → Becoming a general-purpose component
    → Structural shift into an industry where shortages can occur

 

  • Key changes
    1. Larger area: package area 30 → 100~150 body
    2. Higher layer count: attempts to break through the limit from 30 layers → 50 layers
    3. Finer circuits: Advanced SAP and BVH processes essential
    → A structure where capacity shrinks and unit prices rise

 

 

Cycle summary

 

  • 2025
    • Memory substrates rebound
    • MLB shortage continues
    • BVH process already in shortage

 

  • 2026
    • Full-fledged FCBGA rebound
    • Explosive demand for large-area substrates for AI accelerators
    • Price increases on the same products become a real possibility

 

  • 2027 and beyond
    • Second FCBGA big cycle
    • Emergence of 150-body-class packages
    • Supply and demand stay tight even with capacity expansion

 

“The essence of shortage”

 

What matters is not demand but process difficulty + yield

 

With large-area substrates
• Production volume falls
• Defect rates rise
• Yields plunge

 

→ Even for the same DPU
Yield of 95% when producing 100 units
Yield of 80% when producing 25 units

 

So
• Only companies with technological capability survive
• Only companies that can pass on prices remain

 

What is a shortage?

A state where demand is high but supply cannot keep up.
= A situation where goods are in short supply.

 

 

Materials are the real bottleneck

 

  • The most severe shortages right now
    • T-Glass (high-grade glass fiber)
    • Gold plating (PGC) – gold prices soaring
    • Ultra-thin copper foil for packaging substrates

 

  • Points
    • Not every substrate uses glass fiber
    • It is needed intensively for NVIDIA AI substrates
    • Oligopoly of Japanese companies → continued price increases

 

  • Conclusion
    Materials shortage = stronger bargaining power for substrate makers

 

 

Test sockets go along for the ride

 

  • Changes in AI GPUs
    • Explosion in pin count (20,000~25,000 pins)
    • Frequencies of tens of GHz
    • TDP up to 1,000W

 

  • So
    • Increasing adoption of silicone rubber sockets
    • Must handle high frequency + heat resistance + large area
    → Socket makers also see structural growth

 

 

 

Investment strategy portfolio suggested by securities firms

 

  • Top picks
    • ISU Petasys
    • Samsung Electro-Mechanics
    • Korea Circuit

 

  • Second picks
    • TLB
    • Daeduck Electronics
    • Lotte Energy Materials

 

  • Watchlist
    • Doosan
    • LG Innotek
    • Haesung DS
    • Simmtech
    • ISC

 

 

Summary

“Substrates are no longer a cyclical industry but
the bottleneck infrastructure of the AI era”

 

• More important than demand growth
→ is who is in shortage
• More important than revenue growth
→ is the possibility of price increases on the same products

 

So
2026 is
a period when earnings + valuations move at the same time