According to Bloomberg on December 30, the largest IC substrate supplier in Japan, Ibiden, may accelerate its expansion. In response, President Koji Kawashima explained that the company is fully loaded with AI substrate orders, and related demand is expected to last at least through the entire year of 2025.

To achieve capacity expansion, Ibiden is constructing a new substrate factory in Gifu Prefecture, Japan, expected to utilize 25% of its capacity in the last quarter of 2025 and reach 50% by March 2026. The company is currently discussing when to activate the remaining 50% of its capacity.

Koji Kawashima believes that the company almost exclusively supplies IC packaging substrates for AI servers to NVIDIA, but this may still be insufficient to meet demand. He stated that customers have concerns about the company's supply, and inquiries have already been made about the company’s future investment plans and the next round of capacity expansion.

Public records show that Ibiden was established in 1912, with clients including Intel, AMD, Samsung Electronics, Taiwan Semiconductor, and NVIDIA. Since substrates need to be customized for each chip model, many customers begin collaborating with the company early in the product development stage. In the field of AI Chips, IC substrates are the core PCB products, providing support, heat dissipation, and protection for chips.

Earlier, Koji Kawashima pointed out that the Ohno factory producing IC substrates for AI servers is set to enter mass production from July to September 2025 and is expected to be fully loaded after 2027. He also believes that while the company is currently the only one capable of producing packaging substrates for AI, other overseas companies are likely to enter the market, forecasting increased competition after next year.

Currently, Ibiden is the only manufacturer supplying AI server IC substrates to NVIDIA. Additionally, it is reported that other substrate manufacturers are expected to enter NVIDIA's supply chain as early as 2025. Analyst Hideki Yasuda from Toyo Securities believes that the advanced chips for AI servers have high requirements to combat thermal deformation, making it unlikely for new entrants to offer the quality and quantity that NVIDIA can meet.

HAITONG SEC believes that AI and high-performance computing may be incremental sources for the IC substrate market. With demand driven by AI and high-performance computing, IC substrates are developing towards higher layers and larger areas. According to the materials presented by Ibiden, the average area of a single Datacenter chip ABF substrate is 2.5 times the layer count of a single PC chip ABF substrate and 3.6 times the area.

According to the substrate material classification, IC packaging substrates can be divided into BT substrates and ABF substrates, with the latter mainly used for large high-end chips such as CPU and GPU. Driven by AI Servers, ABF is expected to be the fastest-growing category of IC substrates. According to Prismark data, the packaging substrate Industry is expected to grow from 14.2 billion dollars in 2021 to 21.4 billion dollars in 2026, with a compound annual growth rate of 8.6%, and the annual compound growth rate of ABF substrates reaching as high as 10%.