Global AI Boom Drives Sustained Growth in ABF Substrate Market Through 2027 as Rising Demand for AI Servers Increases Revenue and Prices for Major Manufacturers
The business climate for the ABF substrate market is rapidly warming as demand for artificial intelligence servers and high end switch chips continues to rise. The changes are creating a parallel increase in supply chain prices and utilization rates of factories. Market led times and spot prices of the substrate market have been extended according to data from ctee tw, triggering the sustained high revenue growth for the three major manufacturers, Unimicron, Kinsus and Nan Ya PCB, each of which saw positive performance in revenue figures for April.
Price quotations will be raised along with the growing demand shortage. It is believed that demand in AI servers is moving to long term demand structure, therefore a period of long lead times for the supply and demand mismatch in ABF substrates will last through 2027. Many driving factors are at play. Prices quotations are anticipated to climb 5% to 10% quarter over quarter on average for ABF substrates starting in 2nd Qtr of 2026, while immediate market spot price are up by more than 30%. Clients are even willing to pay for extra subsidies to secure orders, indicating stability in supply for high performance computing is of importance.
Price hike of raw materials will lift overall prices. Market rumors suggest Ajinomoto, the largest supplier in build up film globally, will raise prices at least 30%. It is believed that substrate manufacturers will transfer the cost increases of raw materials to their customers once that happens. A 30% raise in build up film cost will then results in 3% 6% price increase on overall substrate price (based on product cost structure of substrate used for AI GPUs/ASICs). The prices plus improvement on product mix will result in better margins. Analysts expect the gross profit of ABF substrate will reach 22 30% for 2026 and may reach 30 35% for 2027.
Market leaders perform well. Revenue in April proves growth momentum for major manufacturers. Unimicron's April revenue reached 13.933 billion NTD, Kinsus' April revenue hit 4.072 billion NTD, Nan Ya PCB's April revenue was 4.451 billion NTD. Nan Ya PCB may gain the most from price hikes as its non contract segment is more prevalent, according to financial analysts. Meanwhile, Kinsus may seize share from the high end segment due to rising penetration rates of AI. Long term contracts with customers account for 70% of Unimicron's total shipments, leading to a limited short term rise in pricing power. However, new generations of AI servers, CPO technology will further lift up the quotes in the quarters to come.
