An overview of IC substrate industry and manufacturers in the world
In early September, semiconductor market news said that the market gap of ABF substrates, which have been in severe shortage for three consecutive years, is narrowing; however, some institutions’ forecasts for the ABF market show that due to sluggish PC demand and the delay in the release of Intel’s new server processors until 2023, the ABF supply and demand situation in 2022 is under tremendous pressure.
IC substrate, an integral part of chip packaging
IC substrate is a technology developed with the continuous advancement of semiconductor packaging technology. In the field of high-end packaging, the IC substrate has become an indispensable part of chip packaging, not only providing support, heat dissipation and protection for the chip, but also providing electronic connection between the chip and the PCB motherboard, which plays a “linking link”. It can even embed passive and active devices to achieve certain system functions.
IC substrate is a relatively high-end PCB. It is developed on the basis of HDI and has the characteristics of high density, high precision, miniaturization and thinning. IC substrate products are roughly divided into five categories: memory chip IC substrate, MEMS IC substrate, RF module IC substrate, processor chip IC substrate, and high-speed communication IC substrate. They are mainly used in mobile smart terminals, service /storage etc.
The market size of packaging substrates continues to rise with increasing demand for advanced FCBGA substrates for high-end GPUs, CPUs, and ASICs for high-performance computing applications. According to Prismark data, the global market size in 2016 reached 6.427 billion US dollars, and in 2021 it reached 14.198 billion US dollars.
Behind the fierce competition in the packaging and testing industry, as the semiconductor industry enters the post-Moore era, the packaging and testing industry has also entered the battle for advanced packaging technology from traditional packaging technology.
Thanks to the widespread demand for higher integration, Moore’s Law has slowed down, and advanced packaging has entered a period of rapid development driven by the general trends in transportation, 5G, consumer electronics, storage and computing, Internet of Things, artificial intelligence and high-performance computing , Advanced semiconductor packaging can increase the value of semiconductor products while reducing costs by increasing functionality and improving performance.
New packaging technologies such as BGA, CSP, and FC put forward higher requirements on the line width, line spacing, and through holes of the packaging substrate. In order to comply with the technological development trend, IC substrates came into being. The cost ratio of the IC carrier board is also different depending on the packaging form.
The low-end wire-bonded substrates account for 40% to 50% of the total package cost, which is much lower than the 70% to 80% of the cost of high-end flip-chip substrates. Compared with other materials, IC carrier boards have become the most valuable material in the packaging process.
Japan, South Korea and Taiwan are three pillars, and the localization rate of IC substrates is less than 4%
Like PCB, the global IC packaging substrate industry is also shifting along the industrial trend from Japan to South Korea, Taiwan, and then to mainland China.
The IC carrier board originated in Japan, and the early BT carrier board led the market, and leading companies such as Yifei, Shin Kong and Kyocera were born, forming a complete set with the Japanese semiconductor industry. With the transfer of the semiconductor industry chain to Taiwan, South Korea and other regions, the IC substrates industry has also migrated, and a series of leading manufacturers such as Unimicron, Kinsus, Nanya, and Samsung Electro-Mechanics have emerged.
Due to the supporting advantages and cost advantages of the industrial chain of Taiwanese and Korean enterprises, the Japanese manufacturers have occupied the market share of low-end products, and the Japanese factories have retreated to the field of high-end FC substrates. Upstream materials, equipment and other fields have certain monopoly advantages. The Samsung Electro-Mechanics product line mainly provides FC and RF module carrier boards, which form a complete set with manufacturers such as Samsung Electronics.
China Taiwan occupies half of the world’s foundry capacity, and Nanya, Kinsus and Unimicron are the main carrier manufacturers to support Taiwan’s chip packaging industry. The integrated circuit industry in mainland China started late, so the supporting industry chain is not perfect, and IC substrate manufacturers are still in their infancy.
At present, companies in Japan, South Korea and Taiwan occupy an absolute leading position in terms of revenue, profit, production capacity and technology. According to Prismark data, the global IC substrate industry CR5 is 55%, CR10 is 83%, the industry is highly concentrated, and the top three companies are Unimicron(15%), Ibiden in Japan(11%) and SEMCO in South Korea(10%) .
IC substrate companies in mainland China started late and are currently in the catching-up stage. It is reported that China ‘s chip packaging and testing foundry accounts for more than 20% of the global market. However, the operating income of IC substrates in mainland China accounts for less than 4% of the global market. In the long run, China’s packaging substrate industry still has a large alternative space.
The localization of the core material of IC substrate has just begun
In terms of the upstream and downstream of the industrial chain, the upstream of IC substrates are mainly resin substrates, copper foils and other structural materials and dry film, gold salts and other chemicals/consumables, the midstream is chip packaging, and the downstream areas are mainly memory ICs, MEMS chips, and RF modules and processor IC and other applications.
In terms of the types of substrates, they can be divided into rigid packaging substrates, flexible packaging substrates and ceramic packaging substrates according to materials, of which rigid packaging substrates are the most widely used.
The substrate material determines the performance of the carrier board and is the core upstream raw material in this link. The main materials of rigid packaging substrates include BT resin, ABF resin, and MIS pre-encapsulation materials. Among them, the substrates based on BT resin and ABF resin are the most widely used.
BT resin: Japan ＇s Mitsubishi dominates
BT substrate is a carrier board whose base material is BT resin. It has the advantages of high glass transition temperature, high heat resistance, high moisture resistance and low dielectric constant. It is mainly used in memory chips, MEMS chips, radio frequency chips and LED chips.
The BT resin as the core material was developed by Japan’s Mitsubishi Gas Chemical Company in 1982 under the technical guidance of Bayer Chemical Company. It has a patent and can also be commercialized for mass production.
Therefore, it is currently the largest BT resin manufacturer in the world. More than 90% of the world’s calendars and Doosan are supplied in small batches, while China PCBA manufacturer have made breakthroughs in this field, realizing mass production and supplying downstream terminals, filling the gap in the market.
ABF carrier board: Ajinomoto accounts for 99%
ABF carrier board is a carrier board with ABF (Ajinomoto build-up film) as the base material. ABF carrier board can achieve smaller line width and line spacing and thinner lines, and is mainly used in high-performance computing such as CPU, GPU, FPGA, and ASIC. chip. MIS carrier board contains one or more layers of pre-encapsulated structure interconnected by electroplated copper, which can achieve newer wiring and moisture absorption, because of its characteristics, it is used to replace traditional QFN and lead frame packaging, mainly used for analog chips , power IC, digital currency chip, etc.
The main supplier of ABF is Ajinomoto, with a market share of ≥99%, and Sekisui Chemicals has the second largest market share. Ajinomoto is basically in a monopoly position in the ABF field. However, the expansion of Japanese factories is relatively cautious, and it is difficult for the supply to keep up with the demand of upstream and downstream applications and the rhythm of the expansion of ABF carrier boards.
In June 2021, Ajinomoto announced that the CAGR of ABF production in the next 4 years will only be 14%, which is far below the market demand. Insufficient output of core material ABF will seriously restrict the expansion of ABF carrier production capacity.