The advanced IC substrate market is expected to grow at an 11% CAGR from $15 billion in 2022 to nearly $34 billion in 2028, says Yole Developpement.

Asian companies, especially Taiwanese companies, dominate IC substrate revenue with 93% of the market and players have entered advanced substrates to supply the AI companies. As well as from AI, the growth is coming from 5G and automotive.

All market participants are making significant investments to meet these requirements and accommodate the escalating demand.

Yole forecasts the SLP (Substrate-Like PCB) market to climb from $2.9 billion in 2022 to $3.6 billion by 2028. This market is primarily rooted in high-end smartphones. 

ED (Embedded Die) an emerging laminate substrate technology, is anticipated to surpass 1.2 billion units in production by 2028, with its revenue increasing to $900 million.

“A novel substrate core material – Glass Core – heralds a new era for advanced substrates, particularly with its innovative applications in AI and servers,” says Yole’s Bilal Hachemi, “the materials and equipment segments within the advanced IC substrate industry are keeping pace with the evolving demands, the increasing complexity of the market, and the needs of end customers.”

 

The centre of advanced IC substrate manufacturing is in East Asia, specifically, Taiwan, South Korea, and Japan with Taiwan playing a pivotal role. China is making substantial strides with unprecedented investments, positioning itself for future market dominance,

Japanese players like Meiko and Ibiden hold considerable market shares and serve as key SLP suppliers to Samsung. 

Chinese players are gradually entering the market to cater to domestic demand from Huawei, Xiaomi, and Oppo. Notable entrants include AKM Meadville and KinWong, who have announced substantial investments in SLP technology. 

SLP adoption is primarily for  high-end applications. Widespread adoption is hindered by the higher price associated with SLP, making it less accessible for mass-market products.

 Consequently, the SLP market is projected to experience gradual growth over the next five years, primarily driven by the increasing demand for 5G smartphones and potential adoption in the medical and automotive sectors.

“The SLP market is dominated by Taiwanese companies, such as ZD Tech, Compeq, and Unimicron, with Austria-based AT&S also making a significant mark,” says Yole’s Vishal Saroha, “among these, Taiwanese firms, in particular, have been making substantial investments in capacity expansion, commanding almost 60% of the total SLP revenue in 2022.”

AT&S is the solitary contender in Europe, with aspirations to break into the top three soon, while no substrate supplier in the United States currently ranks among the top twenty. 

Therefore, the production of advanced substrates will remain highly concentrated in Asia. 

To diversify supply chains and bolster local resilience in Europe and the US, more companies are contemplating investments in the advanced substrate industry. 

Local government incentives may further stimulate this trend, particularly in the US and Europe.