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March 1, 2021

The Substrate Crisis Deepens

Despite the pandemic lock-down, demand for electronic products and services remains strong. Work-from-home, video conferencing, and remote learning are driving data center growth and laptop and tablet demand. 5G infrastructure rollout is underway and smartphone sales are returning to normal levels. Automotive sales are increasing. At the same time, the industry is experiencing acute shortages of substrates.

The October 2020 fire at Unimicron’s IC package substrate plant in Taiwan exposed the serious nature of the capacity shortage for IC package substrates. Substrate makers have been reluctant to make large investments in capacity over the last few years due to the fear that demand could decline and they would have excess capacity. Relentless price pressures by customers and the resulting low margins have weakened the finances of substrate suppliers.

Substrate Crisis TechSearch LogoWith tight capacity, substrate prices have increased and lead times are 14 weeks or more. The most critical shortage is for flip chip ball grid array (FC-BGA) substrates. In addition to increased demand in units, applications such as servers and networking products are seeing requirements for larger body sizes and increased layer counts.

Shortages will not improve very soon because it takes time to build a new plant. And equip it. Key equipment for substrate production has lead times of up to a year.

SEMI and TechSearch International detailed the substrate makers and provide projections for the substrate market, trends, and a list of suppliers and their plant locations in the Global Semiconductor Packaging Materials Outlook report. The report also highlights the market and suppliers for leadframes, bonding wire, encapsulation materials, underfill, die attach, solder balls, wafer level package dielectrics, and wafer-level plating chemicals. In times of shortages the report is an important indicator of suppliers in the industry and trends.

Jan Vardaman is President at TechSearch International Inc.