Zephyr
AI & Semiconductor Analyst at Citrini Research
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
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
AI's physical buildout looks set to last to 2030 and beyond because financing, memory supply and hyperscaler spending still point to sustained demand. Nebius has $3.5B in financing, IREN $2.4B at 9% and SPCX $40B for GPU equipment. SK hynix expects shortages through at least 2030 and Samsung says HBM4 is sold out; memory companies are making money with no sign of slowing. Google expects 2027 capex to rise significantly. Pullbacks can happen; be cautious and buy quality. 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
A memory-chip shortage lasting until 2030 is good for Nvidia. SK hynix expects that shortage and reports a 632% profit jump. 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
Unimicron should benefit from a persistent AI ABF substrate shortage and a shift toward higher-end products. Its projected share exceeds 30% as the market reaches $13bn/$18bn in 2027/28; added capacity is expected to lift ABF revenue 66%/90%. Higher-end ABF, mSAP and LPDDR lift margins, supporting 77% EPS CAGR. Initiate Buy with a NT$1,820 target at 30x 2027 earnings. x.comÂ
Nvidia's co-investment supports Samsung Electro-Mechanics' substrate expansion because it expects capacity to be tight when it needs supply. Samsung Electro-Mechanics says dedicated compute and switch substrate supply to Nvidia starts this year, with double-digit annual volume growth; by 2028 Nvidia orders should take a substantial share of its package-substrate capacity. Global customers fund part of its 6.78 trillion won expansion, but new Sejong output starts in September 2028. x.comÂ
Tight memory supply keeps the AI memory supplier trade in bill-of-materials names if it persists. The investor aleabitoreddit reports an SK hynix shortage outlook through 2030 and an operating-margin result near 80%. HBM allocation and average-selling-price guidance are the next tests; Korea has already priced the earnings print, so the next move depends on who locks capacity. x.comÂ
Unimicron's profit leverage to rising ABF substrate prices should stay significantly positive and last longer than the market expects, even if customers absorb only part of the increases. As a high-end ABF leader, its high fixed costs and utilization leverage limit any squeeze from costlier T-glass. The T-glass bottleneck and long capacity cycles could extend the benefit for a year or two, and its high Nvidia and ASIC share adds pricing power, though execution on hikes and utilization matters. … Show more