The AⅠ wave drives advanced packaging, and packaging substrates open up room for growth

Packaging substrate is the core material in the chip packaging process.

Proportion of WB products in packaging costs

40-50%, FC type accounts for 70-80% of packaging costs. Compared with ordinary PCBs, IC packaging substrates have higher requirements on many technical parameters such as line width/line spacing, plate thickness, and preparation process. According to the substrate, it can be divided into hard packaging substrate, flexible packaging substrate and ceramic packaging substrate. Among them, hard packaging substrate is the most widely used. Among the rigid packaging substrates, BT packaging substrates used in MEMS, communication and memory chips, and LED chips and ABF packaging substrates used in a large number of high-end chips such as CPUs, GPUs, and chipsets occupy the majority of the market share. With the rapid development of artificial intelligence, the demand for downstream AI and HPC-related products has increased. High-performance boards (>22L) and large-size substrates (>100mmsQ) with higher performance are the future development trends.

The overall packaging substrate market is tripartite. The output value of IC packaging substrate manufacturers in Taiwan, South Korea and Japan accounts for more than 90% of the overall output value. The packaging substrate industry has a high degree of concentration, and the strong will always be strong. According to Prismark statistics, the CR10 of the IC substrate market was above 80% from 2016 to 2021, and will further increase to 85% in 2022. China and the United States attach great importance to the packaging substrate industry and are accelerating to catch up.

Looking at the future of carrier board development: BT and ABF are still the core growth drivers, and glass substrates may be the innovation direction of the industry in ten years.

BT carrier board: South Korea leads the way, driven by the growth in memory chip scale. The market size of the global storage industry has increased month-on-month, and the inflection point for the recovery of the storage market has been established.

ABF carrier board: AI is accelerating its growth, and the world's leading companies are accelerating their production expansion. With the changes in trends such as high speed and large capacity in the semiconductor industry, the demand for ABF carrier boards has accelerated. Due to the gap between supply and demand, in order to improve the supply capacity of ABF carrier boards, leading packaging substrate suppliers in Japan, South Korea and Taiwan have invested. Expand ABF carrier board production capacity. The move towards advanced packaging of high-power computing chips will become the main reason for the growth in demand for ABF carrier boards. In addition, another driving factor for ABF is the rise of new technologies and applications such as AI, 5G, autonomous driving, and the Internet of Things. The rise of chiplet packaging technology has further promoted the demand for ABF carrier boards. Glass substrates are the future direction of innovation and development. Intel hopes it will be the next to redefine the boundaries of chip packaging, with plans to start shipping it later this decade. The first products to get the glass substrate treatment will be its largest and most profitable products, such as high-end HPC (high-performance computing) and AI chips.

Since the IC carrier board is directly connected to the bare chip, its manufacturing has three barriers: capital (large), technology (difficult), and customers (slow). These three barriers consolidate its leading position. The packaging substrate industry resonates with the semiconductor cycle and is expected to bottom out and rebound in 2024 as downstream prosperity picks up. Investment advice: The packaging substrate market’s characteristics of large capital, difficult technology, and slow customer flow have created a strong position for the strong. At the same time, the AⅠ wave will drive the general trend of advanced packaging, and ABF carrier boards will fully benefit.