Advanced Substrate Market Set to Grow at 11% CAGR from 2022-2028

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

Currently, Asian companies, especially Taiwanese companies, dominate IC substrate revenue with 93% of the market. These players have entered the advanced substrates market to supply the growing demand from AI companies, as well as from the 5G and automotive sectors.

All market participants are making significant investments to meet these requirements and accommodate the escalating demand. This includes the development of new technologies and materials to keep up with the evolving needs of end customers.

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

Another emerging laminate substrate technology, Embedded Die (ED), is anticipated to surpass 1.2 billion units in production by 2028, with its revenue increasing to $900 million. This technology shows promise in various applications, particularly in AI and servers.

The centre of advanced IC substrate manufacturing is in East Asia, specifically in Taiwan, South Korea, and Japan. Taiwan plays a pivotal role in this industry, while 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. On the other hand, 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.

However, widespread adoption of SLP is hindered by its higher price, making it less accessible for mass-market products. As a result, 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.

Taiwanese companies, such as ZD Tech, Compeq, and Unimicron, dominate the SLP market, commanding almost 60% of the total revenue in 2022. Austria-based AT&S also holds a significant market share. In contrast, no substrate supplier in the United States currently ranks among the top twenty.

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.