April 26, 2021
IC packaging substrates, also known as IC substrates, are regarded as high-end PCB products in the eyes of investors. The packaging substrate is developed on the basis of the HDI board, and is an extension of high-end technology to adapt to the rapid development of electronic packaging technology. The IC carrier board can be directly used to mount the chip, which not only provides support, protection, and heat dissipation for the chip, but also provides an electronic connection between the chip and the PCB motherboard.
In the past year, the epidemic has driven the consumer electronics industry to prosper. The demand for LSI chips such as CPUs and GPUs has doubled. Large-size FC-BGA substrates have been in a state of capacity shortage throughout the year last year. The fundamental reason for the shortage of FC-BGA substrates is Its core material, ABF (Ajinomoto Build-up Film: Ajinomoto Build-up Film) is out of stock. According to media reports, since the fall of 2020, TSMC’s ABF inventory has been insufficient. In addition, industry chain sources revealed that the delivery cycle of ABF has been as long as 30 weeks, and the shortage of upstream material ABF continues to cause the supply of IC substrates to exceed demand. When there is a serious shortage of goods, the delivery period of some IC substrates can reach 1 year. The demand for IC substrates continues to be strong, and the shortage is expected to continue until at least 2022. ASIACHEM said in a research report that the global IC packaging substrate market is growing steadily and is expected to exceed US$10 billion in 2022. By 2025, the total production capacity of IC packaging substrates in the Chinese market will increase to 1.94 million square meters, with a compound annual growth rate of 5.9%.
The boom of the industry is rising. HOREXS strengthened the layout of the second IC substrate plant construction and expanded production capacity. Among Chinese domestic-funded enterprises, HOREXS recently stated that the company's Hubei HOREXS semiconductor high-end high-density IC substrate product manufacturing project has started construction in December 2020 and is still under preliminary construction. It has passed the national government's environmental assessment and approved the construction. It is expected that the first phase of HOREXS's second IC substrate plant will be put into production in 2021, and the monthly production capacity will be increased by 15,000 square meters.
Domestic-funded enterprises have considerable domestic substitution market
Due to gaps in key raw materials, equipment and processes, domestic companies still lag behind the packaging substrate companies in Japan, South Korea, and Taiwan in terms of technical level, process capability, and market share. The technical barriers, capital barriers, and market barriers of the integrated circuit packaging substrate industry are very high, requiring companies to invest huge capital and time costs in the early stage. Most domestic enterprises are engaged in the production of low-end PCB products, and none of them have access to the IC packaging substrate industry. condition.
In terms of output value, the domestic IC substrate output value is less than 300 million U.S. dollars. Compared with the global IC substrate market space, the domestic output value accounts for less than 4%. Compared with the proportion of the output value of PCB, the domestic substitution of domestic IC substrates has considerable market space. Once the technical barriers are broken by domestic companies, domestic companies are expected to copy the history of PCB industry transfer, and the advantages in supporting, cost, and geographical areas in the industry are expected to change the monopoly of Taiwan, Japan and South Korea.
Judging from the recent US-led suppression of the technology blockade of China's chip industry, breaking the "stuck neck" situation, creating the localization of key industrial chains, and getting rid of the technology blockade will be a long-term mission for every Chinese technology company.
As early as June 2019, the first phase of the National Fund also demonstrated the country's support for domestic enterprises in key areas and the determination to break foreign technology monopolies. At present, the total monthly production capacity of HOREXS IC substrates is about 20,000 square meters. With the construction of the new IC substrate factory project, it is expected that the total monthly production capacity of HOREXS IC substrates is expected to increase to 70,000 square meters after the construction is completed. As the process matures and production capacity continues to climb, the cost advantage of HOREXS is expected to gradually become prominent.
In the future, with the construction and expansion of domestic domestic-funded wafer fabs, the construction of 5G base stations, automobiles, and computing servers will gradually land. As one of the famous domestic-funded IC carrier board manufacturers, HOREXS is expected to continue to benefit from domestically-funded alternative outlets and usher in golden development period.