Jukan
Semiconductor & AI Infrastructure Research at Citrini
Ibiden stands to benefit from a tight substrate supply chain that is pushing customers to prepay. Intel CEO Lip-Bu Tan told CNBC that a couple of customers have prepaid for substrates because supply is very tight and he must put up money to secure material, which shows commitment. Intel also uses AT&S for substrates, but Ibiden is its main supplier. x.com x.comÂ
US sovereign AI and defense demand for domestically made compute will bring Intel most, if not all, US semiconductor designers as customers. PC weakness also lets Intel shift wafers to higher-margin server CPUs, but that takes a few quarters; capacity to ship more server CPUs is the limiter. The $240 billion 2030 server CPU market forecast is a stretch case, not the base case, versus roughly $200 billion consensus. x.com x.com x.com x.com x.comÂ
AMD and Nvidia face a growing capital burden from substrates without the benefit of foundry margin stacking. Each is committing $1 billion to the substrate ecosystem; AMD has also publicly committed $10 billion to its Taiwan supply chain, more than three times its Q2 net income. That capital is unavailable for R&D and product development, while their gross margins are flat or shrinking. Intel's gross margin is growing as customers prepay its foundry for substrates. x.comÂ
Ibiden is overpriced and set to lose market share, so AT&S, Kinsus and Ajinomoto are the better substrate positions. This runs against FundaAI (@FundaAI), which argues that high-end ABF capacity is failing to keep pace with AI silicon and sees rerating room for Ibiden at about 45 times FY3/28 earnings. x.comÂ
Intel's poor EMIB-T packaging yields threaten its plans for next year. Per a confidential source, yields are very poor, and EMIB-T may now slip into the following year. The 14A PDK 0.9 matters more for the long term. Intel remains a very strong long-term bull case because yields should improve, though setbacks can arise along the way; whether to avoid this near-term risk is a personal judgment. x.com x.com x.com x.com x.com x.comÂ
Intel's EMIB packaging is ramping as advanced packaging becomes the next chokepoint after HBM. EMIB substrate yields reportedly rose from ~30% in 2Q26 to ~45%, with targets of 50% by 4Q26 and 60% by 1Q27. Google is expected to adopt EMIB-T in 2027 and AWS is testing it. CEO Lip-Bu Tan says Intel has to prepay substrate suppliers to secure capacity. CoWoS capacity is set to grow about 20x from 2023 to 370k wpm by 2028, more than TSMC can carry alone. x.comÂ
Buyer-funded expansion at Ibiden signals a real substrate shortage, with added supply only starting in early 2028. Per an Nvidia press release quoted by paurooteri, Nvidia is providing billions upfront to reserve capacity at Ibiden's Ohno plant, aiming to triple output. Micron's customers similarly prepaid to lock memory supply. x.comÂ
Ajinomoto, Nittobo, Ibiden and AT&S sit in an ABF substrate supply chain consolidated into near-monopolies, where the AI chip bottleneck keeps moving. Nvidia, Intel and AMD are prepaying for suppliers' factories, with Ibiden receiving over 90 billion yen; companies that size do not prepay unless out of options. Ajinomoto holds over 95% of the substrate film market, and Apple, Nvidia and Google are chasing Nittobo's glass fabric. A capex cycle ending in overcapacity is the risk. x.com x.comÂ
IC substrates are Schmid's more relevant growth driver today because demand is already high and rising. Schmid customers Ibiden and Unimicron are expanding capacity with NVIDIA support; higher order intake supports the prospect of more equipment orders. Its balance sheet has improved, and the risk/reward looks attractive at current levels despite volatility. Glass substrates may take another one to two years to matter commercially. This is a personal assessment, not a buy recommendation. x.com … Show more
Ibiden seems the cleaner quality long among ABF substrate makers, with tighter customer ties to Intel and Nvidia and better ABF process IP. It offers less upside optionality, but its earnings quality looks the highest. @zephyr_z9 names Ibiden and Unimicron as the best buys, citing lower consumer exposure than Kinsus and Nan Ya. x.comÂ
Intel is becoming a national AI infrastructure crown jewel, and $1T is only a start if it executes. Apple's preliminary deal to build chips on 18A-P, Google's reported 3M+ TPU orders through 2028 and its role as primary foundry for Elon Musk's TerraFab support that, alongside government and Nvidia stakes. EMIB-T packaging is its trump card: it can package chiplets built on anyone's silicon, including TSMC's, easing CoWoS constraints. If 18A misses, the foundry re-rating would take longer. x.com … Show more
