【 Hot Spot 】 Supply And Demand Imbalance, Local IC Board Manufacturers How To Catch Up

For a long time, IC boards have been ignored in the chip supply chain because of the relatively low gross margin of this product and the reluctance of major board manufacturers to invest and expand production, according to Jiwe.com. But as the global "chip shortage" spreads, the situation appears to be reversing.

Out of stock price surge has swept the semiconductor industry each link, IC board has not escaped. What are the factors driving so many of the phenomena in the industry? How long will the boom last? How will local manufacturers catch up under the tide?

Industry phase: supply and demand imbalance + actively expand production

IC board, also called package substrate, is the material used to connect the chip and PCB motherboard in the C package. For a long time, because of the relatively low gross margin, the IC board in the semiconductor industry chain plays a "cold" role. However, with 5G, AIoT, intelligent vehicles, and other related applications to accelerate the landing, promoting the continuous improvement of wafer manufacturing technology, IC carriers subsequently "hot" up.

Since the second half of last year, the board shortage, the price of the news will not be heard. China Taiwan area PCB and IC board manufacturer Xin Xing said in July at the law conference, whether ABF or CSP board demand is strong, customers have to buy how much, ABF board capacity was booked early by customers, 2025 most of the capacity is booked. At the same time, it is warned that the supply and demand of the global board industry will continue for a long time, and the high-end board may still be in short supply in 2025-2026.

Chinese mainland manufacturers, recently xing Sen science and technology in accepting the investigation pointed out that IC board business supply and demand two prosperous, orders have been scheduled to the end of this year. The company's 20,000 m2 / month production capacity has been in full production except for the Spring Festival in February.

Amid demand for boards, there is even talk that Intel AMD, Nvidia, and others are seeking long-term deals with ABF board manufacturers to ensure adequate supply through 2025 and beyond.

As for the shortage of board, on the one hand, lies in the downstream demand, PC, tablet, data center, and other applications stimulate the demand of ABF board, 5G millimeter wave, eMMC has become the driving force of BT board.

Primark data shows that in 2020, the output value of the IC board industry has broken through ten billion US dollars, reaching 10.2 billion US dollars; The IC board industry is expected to grow to $16.2 billion by 2025 with a 9.7% CAGR, far exceeding the overall 5.8% CAGR level of the PCB industry, making it the fastest-growing sub-segment of the PCB industry.

On the other hand, the capacity of the board is limited. Jan Vardaman, president of TechSearch In International, a consultancy, said chip companies focused on improving chip performance rather than on lower-cost, lower-margin projects, so they mostly outsource production of the boards. Despite the increasing complexity of onboard functions and their increasing importance to chip performance, chip manufacturers have long pressured onboard suppliers to keep prices down, resulting in limited investment and difficulty in increasing onboard capacity.

In addition, the Xin Xing Shan Ying factory fire in February this year also affected the supply of BT board, so that the imbalance between supply and demand of the market has been traumatized.

In order to cope with the shortage of capacity, major manufacturers have put forward plans to expand production. Ibiden, a Japanese manufacturer, plans to invest $1.6 billion to build a new plant to replace the plant in Ogaki City, which is scheduled to be put into operation in 2023. Shennan Circuit, a Chinese mainland manufacturer, plans to raise no more than 2.55 billion yuan for the high-end flip-chip C-carrier product manufacturing project and supplement working capital. Dongshan Precision plans to invest 1.5 billion yuan to set up a wholly-owned subsidiary specializing in THE R & D, design, production, and sales of C board; Chinese manufacturer Jingshuo is spending NT $1.006 billion to order equipment needed to expand its production capacity.

Local manufacturers: domestic substitution + record pursuit

The above-mentioned industry personage expresses, can send a force from the capital, technology, equipment three respects.

Specifically, the board is a capital-intensive industry, many local board factories feel that the investment of 200-300 million yuan to build a factory, in fact, this amount is far from enough, need to increase investment; In terms of technology, China started late, there is a gap compared with the technology of big factories, the technology needs to be overcome; In terms of equipment, the supporting equipment and materials of the board are mostly monopolized by Japanese and Korean enterprises, which is also in urgent need of changing the status quo.

Conclusion: it can be expected that this wave of stock shortages will boost the local board manufacturers' full orders. Under the relaxed policy environment and perfect industrial chain, local manufacturers are expected to accelerate the pace of domestic substitution.