Discussion of advanced packaging tends to gather around CoWoS and HBM, but the ABF-based package substrate (IC substrate) that carries them is a hidden linchpin of supply. The more you pack a compute die and HBM into one package, the more the substrate must offer high wiring density and larger form factors — making it prone to tightness. And in 2026, large-scale expansion investment has begun to converge on these substrates all at once.
The lead players are not concentrated in one country. Austria's AT&S and Japan's IBIDEN — both major substrate suppliers — are adding capacity backed by AI demand. Whether substrates can keep up with demand governs the supply continuity of AI chips overall.
AT&S — doubling investment for AI substrates
AT&S agreed with AMD and another major technology company to expand AI substrate production. To back the supply, it will repurpose the previously idle second plant building at Kulim, Malaysia for AI substrate production. Using an existing building compresses ramp time.
The numbers move sharply. It raised FY2026/27 capex from €0.4 billion to €1.0–1.2 billion and, alongside, lifted its revenue growth outlook from 30–35% to 45–55%. Notably, the funding is underwritten: the total €1.5–2 billion AI-substrate expansion is fully supported and financed by long-term customer commitments. Rather than speculative expansion in anticipation of demand, this investment is tied to firm customer commitments — a sign of real demand strength. AT&S runs its European competence center for IC-substrate R&D and production at Leoben, Austria, turning both the development and volume wheels.
IBIDEN — ~¥500 billion over three years
Japan's IBIDEN also steps into large investment. IBIDEN approved a ~¥500 billion IC package substrate capex plan over three years. As a first phase, about ¥220 billion is invested centered on the Gama Plant (Cell6). The Gama Plant (Cell6) building was completed in FY2023, with volume prioritized at the Ono Plant, so it adds capacity while leveraging existing assets.
Its demand response is not single-track. Additional expansion at the Ono Plant is also under consideration, with multiple measures in parallel. This investment is not ad hoc — it is positioned as the means to achieve the FY2030 targets disclosed in May 2025, building capacity in line with a long-term demand outlook.
How to read the substrate ramp
ABF/IC substrates: AT&S and IBIDEN expansion
01
AT&S (Austria)
Agreed with AMD et al. and repurposes its idle Kulim second building. Capex doubled €0.4B→€1.0–1.2B, revenue outlook to 45–55%. €1.5–2B fully covered by customer commitments.
02
IBIDEN (Japan)
Approved ~¥500B over three years. First phase ~¥220B centered on Gama Cell6. Volume prioritized at Ono, with further expansion under study. The means to achieve FY2030 targets.
03
Shared picture
Backed by AI demand, major substrate suppliers add capacity in unison — tied to customer commitments and long-term targets, not speculation.
04
Implication for buyers
Substrates are prone to tightness with larger form factors and higher wiring density. Whether the ramp keeps up with demand, and whether it is customer-backed, are supply-continuity signals.
Business impact and checkpoints
From a procurement and investment view: (1) whether your AI package's ABF/IC substrate sourcing is exposed to tightness; (2) whether the expansion is "tied to customer commitments (AT&S)" or "in line with long-term targets (IBIDEN)" — speculative expansion becomes a future overcapacity/price-volatility risk; and (3) how far substrate yield and supply become effective a few years out as larger form factors and higher density advance. The substrate is inconspicuous, but in ever-larger AI packages it is a linchpin that determines yield and supply continuity — worth tracking whether the ramp materializes.
