ABF substrates are the core component of next-generation AI servers, and heightened demand is going to see their prices bumped by up to 30%.
ABF Substrate Supply Was Already Low, & Now Prices Are Going To See A 30% Hike As AI Supercycle Grips The Market
ABF or Ajinomoto Built-Up Film is a high-performance insulating film used to package semiconductors, particularly for advanced flip-chip ball grid array (FCBGA) substrates. It acts as a high-speed interconnect layer between the PCB (Printed Circuit Board) and the silicon itself, offering high I/O density and signal integrity. This film is a staple of advanced packaging solutions that are in demand at AI data centers.
Last month, we reported that Ajinomoto, the makers of MSG, were running out of ABF substrates at an accelerated rate due to skyrocketing demand. Now, Commercial Times reports that ABF substrate makers are experiencing a massive recovery phase by driving up supply chain prices & capacity utilization rates.
ABF suppliers are currently raising spot prices, passing on material costs to customers, and all of this is leading to longer lead times. As such, the top three substrate manufacturers, which include Unimicron, Kinsus, and Nay Ya PCB, are seeing boosted revenues.
But at the same time, the ABF supply-demand gap is extending to the end of 2027, which has resulted in prices increasing by 5-10% for ABF substrates. These prices will go into effect in the second half of 2026. As for spot prices, those are reportedly seeing an increase of over 30%. Taiwanese substrate manufacturers are already operating at full capacity and will continue to do so till the end of this year.
Recent market rumors suggest that Ajinomoto, a global supplier of ABF (Alternating Layer) additive manufacturing (ABF) films, is considering raising film prices by at least 30%. If this price increase trend materializes, substrate manufacturers will inevitably pass on material costs to end customers. Based on the cost structure of ABF substrates used in AI GPUs and ASICs, a 30% price increase for additive manufacturing (ABF) films would translate to an overall substrate price increase of approximately 3% to 6%.
Commercial Times
It doesn't stop there, Ajinomoto itself is the supply-demand gap widening and is expected to raise Film prices by at least 30%. A 30% price increase for additive manufacturing is said to net a 3-6% hike in the substrate costs.
At the given momentum, substrate manufacturers are expected to see a 22-30% gross profit margin in 2026 and a 30-35% gross profit margin in 2027. Looking ahead, the demand for CPO (Co-Packaged Optics) and next-generation AI servers will further drive up the supply chain capacity and prices.
About the author: A Software Engineer by training and a PC enthusiast by passion, Hassan Mujtaba serves as Wccftech's Senior Editor for hardware section. With years of experience in the industry, he specializes in deep-dive technical analysis of next-generation CPU and GPU architectures, motherboards, and cooling solutions. His work involves not only breaking news on upcoming technologies but also extensive hands-on reviews and benchmarking.
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