Scale of Global Market for ABF Substrates Will Grow at a CAGR of 16.4% in 2022~2026 Period; US Export Restrictions Will Influence Supply-Demand Dynamics of This Material

2022-11-14 Semiconductors TrendForce

Shipments of CPUs, GPUs, and chipsets have been falling due to the weakening demand for PCs, gaming devices, and cryptocurrency mining machines. This recent development has also constrained the growth of the market for ABF substrates. Currently, the demand situation for this material is exhibiting signs of uncertainty.

Regarding the distribution of the demand for ABF substrates, applications that are driving growth are cloud services, AI, and automotive electronics. CPUs, GPUs, FPGAs, and switch ICs are chips that are deployed in servers purposed for a wide range of applications related to cloud services and endpoint AI technologies. Meanwhile, other AI-related applications require high-end ASICs. At the same time, more and more high-end SoCs and MCUs are embedded in vehicles. All in all, these aforementioned applications will spur the demand for ABF substrates. Additionally, package size continues to increase for high-performance ICs. This trend, too, will sustain the demand for ABF substrates over the long haul. By contrast, the PC market has matured, so the related demand is shrinking. From a long-term perspective, the influence of the PC market on the demand for ABF substrates will gradually wane.

TrendForce forecasts that the scale of the global market for ABF substrates will expand from US$9.3 billion in 2022 to US$17.1 billion in 2026, thus showing a CAGR of 16.4%. Due to the influence of the US technology export restrictions against China, the demand for ICs purposed for HPC will be higher than expected for the period from 4Q22 to 3Q23. This, in turn, will also further raise the demand for ABF substrates.

Then, starting from 4Q23, exports of HPC chips to China will start to slow down. However, demand will continue to grow for ASICs, AI chips, SoCs, and MCUs at that time. The growth in these application segments will offset some of the negative effect of the US export restrictions on the market for ABF substrates. In terms of the supply-demand dynamics of ABF substrates, a balance will gradually be attained in 2024. However, demand will get stronger in 2025 and 2026, so supply could tighten during that two-year period.