A single report making the rounds this week says the market for ABF substrates — a specialized material that sits between a chip and the circuit board it plugs into — could be running a 29% supply-demand gap by 2028.
According to finance.biggo.com, surfaced via Google News, that projected shortfall has prompted both foreign and domestic brokers to raise their target prices on three Taiwanese suppliers: Unimicron, Nan Ya PCB and Kinsus. Those three names are among the largest makers of the advanced substrates that high-end processors depend on.
A quick primer on why anyone outside the industry should care. ABF substrate is not glamorous. It is essentially the sophisticated interposer layer that carries the thousands of electrical connections running out of a modern processor. But it is a genuine bottleneck: you cannot ship a finished AI accelerator without one, no matter how many wafers a foundry produces. When substrate supply lags, chip output lags with it.
A 29% gap, if it materializes, is not a rounding error. It implies demand outrunning available capacity by roughly a third — the kind of imbalance that pushes prices up, lengthens lead times, and hands pricing power to the handful of firms that already have production lines running. That is precisely why analysts are revising their valuations of Unimicron, Nan Ya PCB and Kinsus upward rather than downward.
One caveat worth stating plainly: this is a single forecast reported by one outlet, projecting conditions several years out. Supply forecasts in the chip sector have a long history of being overtaken by events — capacity gets built, demand cools, or both. The 29% figure is a scenario, not a measurement.
Why it matters: the components that constrain AI hardware are increasingly not the chips themselves but the unglamorous materials around them, and a shortage in that layer would ripple through to the cost and availability of everything built on top of it.