Microchip Substrate Shortage Is Expected To End by 2022

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AMD, Intel and Nvidia could see chip production ramping up within a few years, thanks to increased substrate supply.

That's because, according to DigiTimes, global supplies for the ABF substrate industry are expected to improve sometime in late 2021 or 2022 as substrate manufacturers based in Taiwan and China start bringing additional capacity online through more plants and production lines.

ABF substrate material is incredibly important for the semiconductor industry as it is responsible for connecting microchips to their associated circuit boards. Recent substrate shortages are partially to blame for the CPU and GPU shortages we’ve been seeing over the past few months.

AMD, Intel, and Nvidia have also been busy, securing more and more capacity from substrate manufacturers to help improve the lack of supply. AMD has recently secured more ABF substrate capacity from Japanese vendors, while also assisting new suppliers in Korea and Taiwan to build more substrate capacity.

Intel, meanwhile, has also expanded its ABF substrate partnerships to Ibiden, Unimicron, AT&S, and Semco, with dedicated substrate supply from most of these companies.

Nvidia is seeking more supply as well, by offering higher prices to companies who produce ABF substrate materials. But currently, we don’t know which companies Nvidia is seeking to deal with.

As far as plants are concerned, Unimicron is planning to build a new substrate plant in Yangmei, Taiwan at the start of 2022, with the plant's primary goal being to serve Intel.

Another company, Nan Ya PCB, is rolling out a new ABF substrate plant in Kunshan, China, and is now building production lines at sites in Taiwan and will be fully operational by later this year or in early 2022.

Kinsus Interconnect Technology is also building a new ABF substrate plant in Taiwan with production hopefully starting in 2022.

It's good to see some more progress being made on ending the technology shortage we are experiencing right now, but unfortunately, most of the substrate production doesn’t even start until 2022, so expect chip and technology shortages to last for at least another year or two before prices start normalizing.

Aaron Klotz
Freelance News Writer

Aaron Klotz is a freelance writer for Tom’s Hardware US, covering news topics related to computer hardware such as CPUs, and graphics cards.