When we talk about the shortage of graphics cards available to PC enthusiasts and DIYers, we often go into length regarding the various pressures on manufacturers and the consumer/demand side of the equation. However, a less commonly highlighted reason for manufacturers not producing as many GPUs as they would like is the ongoing Ajinomoto Build-up Film (ABF) substrate shortage. Today, a report published by DigiTimes offering insight into the business of ASRock and TUL (PowerColor) cites insiders remarking that ABF substrate shortages should recede sometime around mid-2022.
To recap the importance of ABF substrate, this material was first discovered in the 1970s. In the 1990s, Intel pioneered its use in helping connect the most intricate circuit designs to the underlying PCB (substrate), as it established the material's superior electrical insulation properties. ABF substrate has been a staple of the industry ever since that time and is used to manufacture packaging for CPUs, GPUs, chipsets, networking ICs, automotive processors, and more.
Both ABF substrate and packaging production capacity have been in short supply during 2020 and 2021 due to the increased demand for computing devices during the pandemic. Major ABF substrate suppliers include the likes of Unimicron and NanYa in Taiwan. Numerous reports have indicated that these companies are accelerating packaging production and building additional factories to ramp up availability as fast as possible.
The DigiTimes report cites industry sources as saying that additional substrate capacity should greatly reduce the shortages after mid-2022, thus helping increase the overall number of graphics cards shipped this year.
The report appears to be sourced from insiders at ASRock and TUL (PowerColor), both AMD-exclusive GPU partners. With specific reference to these companies, it is claimed that they are both buoyed by very strong graphics card sales in recent months. According to the report, the companies hope to slowly scale up their GPU shipments throughout the second half of 2022, thanks in part to greater ABF substrate availability. That will be even better for profits as we glide through 2022.
It's important to note that there have been previous reports regarding ABF substrate supplies that don't sketch out such a quick recovery. For example, in September last year, Singapore's Business Times said that "supplies [of ABF substrate] are likely to remain constrained until at least 2025."
Without additional sources to turn to at this time, it could simply be the case that the likes of ASRock and TUL have managed to get more of a low-availability material as they are willing to pay more. We'll have to wait for further corroborating reports or see how supply/demand changes through the summer. There are many other factors at play that could be more telling over the next six months, though none perhaps more important than the current cryptocurrency value collapse.
