This Kind Of Product Is Popular, The Price Rises 50% PCB Factory Spends Billions To Expand Production

With the growth of 5G, Al, and HPC markets, the demand for IC loaders, especially ABF loaders, has exploded. However, due to the limited production capacity of relevant suppliers, the supply of ABF loaders is in short supply and the price continues to rise. The industry expects the shortage of ABF board supply to continue until 2023. In this context, China's four major board manufacturers in Taiwan, Xinxing, Nanpower, Jingshuo, and Zhending-KY, have all launched the ABF board expansion plan this year, with a total capital expenditure of more than 65 billion Nt dollars (about 15.046 billion yuan) in their factories in mainland China and Taiwan. In addition, Japan's IBIDEN and Shinko, South Korea's Samsung Electric, and Daedeok Electronics have also further expanded their investment in ABF onboard. Domestic large PCB factories have also announced to cut into the loading circuit.

The demand and price of ABF board will increase and the shortage will continue until 2023

IC Substrate (IC Substrate) is developed on the basis of HDI (high-density interconnected circuit board), which has the characteristics of high density, high precision, miniaturization, and thinness. As the intermediate material connecting the chip and the circuit board in the chip packaging process, ABF loading board at its core is the role of the chip with a higher density of high-speed Internet communications, and then through the path of the IC load on the plate more connected with large PCB, plays a role, which forms a connecting link between the preceding and, in turn, a complete and reduce leakage protection circuit, fixed-line position, better heat dissipation in order to protect the chip, even into passive and active devices to achieve a certain System functions.

At present, in the field of high-end packaging, IC carrier has become an indispensable part of chip packaging, data shows that the current IC carrier in the overall packaging cost has reached about 40%.

In the IC carrier, according to the CLL resin system and other technical paths used, there are mainly ABF (Ajinomoto build-up film) carrier and BT carrier types.

Among them, ABF carriers are mainly used for CPU, GPU, FPGA, ASIC, and other high-level computing chips. After these chips are produced, they usually need to be encapsulated on ABF carriers before they can be assembled on larger PCBs. Once the ABF board is out of stock, including Intel, AMD, and other large factories can not escape the fate of chip delivery, the importance of the ABF board can be seen.

Since the second half of the last year, thanks to 5 g, the cloud, computing, server, such as the growth of the market, drive the high-performance computing (HPC) chip demand, coupled with the home office/entertainment, car, such as the growth of market demand, up to the end side of the CPU, GPU, AI chip is a growing demand for, and then to push up the demand for ABF loading board also soared Trend. Coupled with the impact of IC carrier IBIDEN qingliu factory and Xinxing Electronics Shan Ying factory fire, the global ABF carrier supply has been in short supply.

In February this year, it was reported that there was a serious shortage of ABF boards, with a lead time of 30 weeks. With the supply of ABF carriers in short supply, prices have continued to rise. Data show that since the fourth quarter of last year, IC loaders began to continue to rise in price, BT loaders increased by about 20%, and ABF loaders increased by 30% to 50%.

As the production capacity of the ABF board is mainly in the hands of a few Chinese Taiwan and Japanese and Korean manufacturers, their production expansion is also limited in the past, which makes it difficult to alleviate the supply shortage of ABF board in the short term.

Therefore, many closed test manufacturers began to suggest that end customers change the manufacturing process of some modules from THE BGA process, which requires the use of ABF carrier, to the QFN process, so as to avoid the delay of shipment due to the fact that the capacity of ABF carrier is not available.

Loaders say that there is really not much room for loaders to contact any "jump the queue" orders with high unit prices, and everything is focused on customers who previously secured capacity.

Now even have customers talk about capacity in 2023, after Goldman Sachs's research also shows that although the IC loading board factory south power amplification in Kunshan factory in mainland China ABF plate production capacity is expected to begin in the second quarter, but due to the expansion of equipment needed for delivery extended to 8 to 12 months, this year only 10% ~ 15% increase of ABF loading board capacity but the market needs For continued strength, the overall supply and demand gap is estimated to 2022 is still difficult to ease.

In the next two years, with the continuous growth of PC, cloud server, and A1 chip demand, the demand for ABF onboard will continue to increase. In addition, the global 5G network construction will also consume a large number of ABF onboard.

In addition, with the slowdown of Moore's Law, chip manufacturers are increasingly using advanced packaging technologies to continue to promote the economic benefits of Moore's Law. For example, Chiplet technology, which is currently being developed in the industry, requires larger ABF board sizes and low production yield, which is expected to further increase the demand for ABF boards. According to the forecast of Topu Industry Research Institute, the global average monthly demand for ABF board will grow from 185 million to 345 million from 2019 to 2023, with a compound annual growth rate of 16.9%.

Tianfeng Securities report pointed out that from the demand level, HPC+5G AiP to open the carrier market space, the mainland wafer expansion catalyze domestic IC carrier demand; From the perspective of the supply side, the competition pattern of IC carrier board is concentrated (CR10-80%), and the market share of domestic manufacturers is low and the localization space is large (domestic market and supply comparison). Due to 1) restrictions on upstream raw materials (especially ABF) + imported equipment; 2) The IC carrier barrier is high and the expansion cycle is long, and the IC carrier capacity is slow to release. In addition, the supply is further tightened under the influence of short-term black swan events such as fire.

Big pallet factories are aggressively expanding production

In view of the continuous shortage of ABF board and the continuous growth of market demand in the future, the four major IC board manufacturers in Taiwan, Xinxing, Nanpower, Jingshuo, and Zhending-KY, have all started the production expansion plan this year, with a total capital expenditure of more than 65 billion NT dollars (about 15.046 billion YUAN) in their factories in Mainland China and Taiwan. In addition, Japan's IBIDEN and Shinko agreed on 180 billion yen and 90 billion yen, respectively, for plate expansion. South Korea's Samsung Electromechanics and Daedeok Electronics have also further expanded their investments.

Among the four Major Taiwan-owned 1C board plants, the largest CAPEX this year was xinxing, the leading factory, with 36.221 billion Nt dollars (about 8.884 billion yuan), accounting for more than 50% of the total investment of the four major planets, and a 157% increase from last year's NT $14.087 billion. Xinxing has increased its capital expenditure four times this year, highlighting the current market shortage. In addition, Xinxing has signed long-term contracts with some customers for three years to avoid the risk of a reversal in market demand

Nanpower plans to spend at least NT $8 billion (about RMB 1.852 billion yuan) on capital expenditure this year, with an annual increase of more than 9%. Meanwhile, it will also invest NT $8 billion in the next two years for the expansion of the ABF board production line in Taiwan Shuslin Factory. It is expected to open a new board production capacity from the end of 2022 to 2023.

Kinsus benefited from the parent company and group support, actively expand ABF load capacity, capital expenditure this year include land expansion expects to break through the t $ten billion marks, which in the waxberry land and building combined t $4.485 billion, plus the original expansion ABF loading board to buy equipment and processes bottleneck investment, total capital spending is expected to be increased by more than 244% year on year It is also the second carrier plant in Taiwan with capital expenditure exceeding T $10 billion.

In recent years, zhending Group, under the strategy of one-station purchase, not only has the existing BT carrier business made a smooth profit and continued to double the capacity expansion but also has finalized the five-year carrier layout strategy internally and started to enter ABF carrier.

While the Taiwan plant is aggressively expanding ABF plate capacity, the Japanese and Korean plate manufacturers have recently accelerated their capacity expansion plans.

Japanese carrier maker IBIDEN has finalized a 180 billion yen (about 10.606 billion yuan) carrier expansion plan, aiming to generate more than 250 billion yen (about $2.13 billion) in output in 2022. Shinko, another big Japanese manufacturer and key Intel supplier, has also finalized a 90 billion yen ($1.31 billion) expansion plan to increase its onboard capacity by 40 percent by 2022 and generate revenue of about $1.31 billion.

In addition, South Korea's Samsung Electric Has increased the share of board revenue to more than 70 percent last year and continues to invest. Another South Korean board plant, Daedek Electronics, is also converting its HDI plant to an ABF board plant, aiming to increase related revenue by at least $130 million by 2022.

At the same time, Shennan Circuit, Dongshan Precision, Jingwang Electronics, Xingsen technology, Zhuhai Yueya and Zhongjing Electronics, and other domestic PCB enterprises also announced the addition of IC load board. (Click the blue words below to see the details)