Due to the continuous expansion of TSMC's advanced packaging technology CoWoS, the demand for related materials has increased dramatically, which is affecting the entire semiconductor supply chain. It has been reported that Mitsubishi Gas Chemical (MGC), the world's largest supplier of raw materials for BT substrates, has recently informed customers that shipments of raw materials for BT substrates will be significantly delayed due to tight supply.
The delay in the supply of MGC may lead to a long-term shortage of materials in the substrate industry chain, further exacerbating the cost pressure in memory manufacturing, especially for NAND Flash controllers. Controller manufacturers like Phison, which has stock in hand, are expected to stand out in the coming months.
BT substrate is the full name of BT resin substrate material, which has the advantages of high glass transition temperature (above 180 °C), excellent dielectric properties (low dielectric constant and low loss factor), low thermal expansion rate, high mechanical strength, good flame retardancy, good CAF resistance, etc. It is widely used in semiconductor packaging substrates such as memory chips and MEMS chips, high-frequency boards such as 5G communication base stations, high-density interconnection (HDI) multilayer printed boards for consumer electronics such as smartphones, as well as automotive electronics, aerospace and other fields, which can meet the high-performance requirements of substrates such as high temperature resistance, stable signal transmission and reliable size in different scenarios.
In this raw material shortage, the industry generally pointed the finger at TSMC's CoWoS advanced packaging technology. This chip-on-wafer-on-substrate packaging process is favored by high-end customers such as NVIDIA and AMD, and is widely used in flagship enterprise GPUs such as Blackwell. Since its launch, TSMC has continued to expand its CoWoS production capacity, further boosting the demand for related materials.
Figure: TSMC's CoWoS packaging demand is surging, BT substrate material supply is urgent, and the storage market is facing challenges
CoWoS relies on ABF substrates, which typically use the same or similar base materials as BT substrates, which makes the supply of BT substrate materials even tighter. With TSMC's dominance in the industry, its large-scale purchasing practices are squeezing the survival space of other suppliers. In particular, in the future, if processors with large 120x150mm CoWoS packages and power consumption of up to 1000W are promoted, the supply shortage is likely to worsen.
MGC pointed out that the current round of raw material supply crisis is mainly due to the shortage of key materials such as glass fiber cloth, copper clad laminate (CCL) and prepreg (PPG) with low coefficient of thermal expansion (CTE). These materials are not only used in BT substrate manufacturing, but are also widely used in the production of motherboards for enterprise servers and smartphones. Due to the low priority, BT substrate manufacturers face the most direct impact.
In order to avoid supply chain disruption, BT substrate-related companies have begun to strengthen coordination and jointly arrange orders and raw material distribution. At present, the demand for consumer electronics is still sluggish, coupled with the repeated vacillations of the US government on tariff policy, resulting in cautious market sentiment, to a certain extent, to alleviate the overall raw material pressure, temporarily avoiding the outbreak of a comprehensive shortage.
For major suppliers of BT substrate products, such as NAND Flash controllers and eMMC, this period of uncertainty could be a positive one. For example, Phison is actively acquiring more capacity from TSMC to ensure that its NAND controller business is a core driver of future growth, and has received a large number of orders to capture the upcoming out-of-stock market. It can be expected that in the context of continued material tightness, the price of the controller will gradually increase.
As can be seen from this year's Computex exhibition, the AI boom is still the core driving force for the development of global hardware, and TSMC continues to benefit like a shovel seller in the "gold rush". Although this wave of AI has not yet been truly transmitted to the sluggish consumer electronics market, it is this "staggered" development that has avoided a more serious material crisis - once consumer electronics also enters a strong recovery period, the entire industry chain will face a greater supply test.
