Demand for GPU packaging substrates is surging, Nvidia Blackwell is moving towards a path of aggressive expansion.

The research report recently released by the Wall Street investment giant Bank of America shows that the operating profit of Ibiden's electronic component business under the leadership of the semiconductor packaging equipment leader based in Japan is expected to achieve a compound annual growth rate (CAGR) of 35% over the next five years. Furthermore, the EPS expectations for the fiscal year ending in 2028 have been significantly raised. The main reasoning behind this is the explosive growth in demand for Ibiden's GPU packaging substrates (i.e. ABF advanced packaging substrates) used for AI chip production capacity expansion, which is driving a significant increase in both quantity and price of ABF. According to research data by Bank of America, Ibiden, the leader in packaging equipment, is expanding production significantly (with an unprecedented additional 60-70% capacity expected between 2024-26). They are also poised to seize the opportunity for historic acceleration in ASIC expansion, with expectations to supply ABF substrates for AI ASIC chips to super clients starting from 2026, such as Google, Microsoft, and Meta. The Bank of America analyst team's extremely optimistic expectations for Ibiden's valuation and demand fundamentals, imply that Nvidia's Blackwell series AI chip/AI server rack products will initiate a "super growth cycle" in the second half of the year. The Blackwell series AI chips include the Blackwell architecture AI GPU and the AI GPU based on Nvidia's most advanced architecture, Blackwell Ultra. For example, the Blackwell architecture dual die+8-HBM3E or the next-generation HBM system - 12-HBM4 CoWoS advanced packaging, require at least 14 layers of ABF and a super large effective area. It is understood that research data on the chip industry supply chain from Wall Street institutions such as Bank of America and Morgan Stanley show that Blackwell architecture AI GPU products and GB200 NVL72 AI server racks have entered a trajectory of accelerated shipping exceeding expectations starting from the second quarter of this year. With the mass production of Blackwell Ultra architecture products and Nvidia's Blackwell series AI GPU products/AI server rack products, they are expected to embark on a more brutal "global shipment and AI computing power demand surge" path from the second half of the year. Why are ABF packaging substrates closely tied to AI chip packaging? Nvidia's Blackwell series dual-die AI GPUs and Google's TPUs, among other AI ASICs, are striving to solidify high power chips, increase HBM stack counts, and transmit high-speed I/O altogether in Taiwan Semiconductor's CoWoS advanced packaging. This requires high-layer ABF packaging substrates which meet stringent criteria of ultra-fine routing, low dielectric, high heat resistance, and low warpage. The ABF advanced packaging substrates are the only materials currently mass-produced that meet these strict standards. For instance, the Blackwell-B200 needs to connect two large GPU dies with maximum 12-high HBM4 stacks to the silicon intermediate layer. The I/O count is increased by over 145% compared to Hopper, and to meet impedance and crosstalk requirements, it is essential to rely on ABF advanced packaging substrates with 10-14 layers of interconnection (mSAP process). The high-speed SerDes spacing in the Blackwell-B200 is less than 35m, with wiring layers exceeding 14 layers, and ABF advanced packaging substrates utilizing mSAP/SAP process can stably achieve 8/8m or even 5/5m line width/gap, while traditional BT substrates only reach a maximum of 15/15m. The electrical and thermal performance also determine that advanced packaging systems for high-performance AI chips cannot be without ABF packaging substrates. ABF resin has a low dielectric constant (Dk3.5), low loss, heat resistance with Tg over 200 C, support for over 1kW of packaging heat dissipation. For high stack Blackwell-HBM modules, these material characteristics are necessary to ensure efficient data transfer, integrity, and reliability. ABF packaging substrates and AI computing demand Ibiden is positioned at the top tier of advanced packaging equipment with a dual domination of technology and customers. The scaling of Blackwell production capacity is strongly coupled with the progress of their mass line expansion. Manufacturing and shipping of Blackwell/AI ASICS heavily rely on ABF, and according to Bank of America's research report, due to the strong demand for AI computing power, the mass shipments of Blackwell series AI GPUs and AI server rack products are expected to accelerate significantly, with an unexpected surge in demand for AI ASIC chips led by Google TPUs. Global ABF packaging substrate capacity is witnessing a large-scale "land grab". Regarded as a rival to OpenAI, the leader in generative AI, Anthropic predicts that by 2027, AI large models will have the capability to automate nearly all white-collar jobs, leading to an astronomical increase in AI computing power demand and potentially driving exponential growth in the artificial intelligence computing infrastructure market. The "AI inference system" is considered by Huang Renxun as the largest revenue source for Nvidia's future. With the global popularity of ChatGPT and the introduction of heavyweight Sora textual video models, coupled with Nvidia's unmatched performance in selling AI chips for several quarters in the AI domain, it signifies that human society has entered the AI era. In Nvidia's earnings conference at the end of May, Huang Renxun optimistically predicted that the Blackwell series will set a record for the strongest AI chip sales, driving exponential growth in the artificial intelligence computing infrastructure market. In their latest report, Bank of America's analysis team significantly increased profit expectations and the target stock price for Ibiden, a core supplier of ABF packaging substrates. Bank of America states that Nvidia's AI GPU still holds over 80% of the share of Ibiden's ABF packaging substrates, but by 2030, the share of AI ASICs (primarily those of major cloud computing giants) is expected to reach close to 20%. Bank of America states that Nvidia, as well as ASIC leaders such as Broadcom, have secured advanced packaging production lines of Ibiden and a few Taiwanese packaging equipment companies. Particularly, Ibiden's continuous large-scale expansion since the end of 2024, precisely reflects the strong confidence of their largest ABF packaging substrate customer Nvidia in the explosive growth of their Blackwell series products and provides the supply chain with clear long-term quantified orders. The strong demand for GPU substrates also indirectly confirms that the shipping of Nvidia's Blackwell series GPUs (B200/GB200 and the upcoming Blackwell Ultra B300) and the installation of Nvidia's Blackwell AI server clusters are rapidly increasing. Board manufacturers are compelled to expand high-end ABF capacity in advance to match their shipping pace. Bank of America's analysis team states that AI ASICs (such as Google's TPUs, Amazon AWS's Trainium, etc.) aimed at ultra-large scale AI data centers are expected to witness a surge in shipments of ABF packaging substrates at a level similar to Nvidia's Blackwell series products starting from 2026. The report from Bank of America shows that Ibiden has laid out a historic 60-70% increase in ABF packaging substrate capacity at their new plants in Gifu and Ono, Japan, to meet the strong growth demand for high-end substrates for both GPUs and ASICs. The latest forecast data from Bank of America's analysis team shows that the sales of AI chips, including GPU, ASIC, and other XPUs, are expected to increase from a mere $126 billion in 2024 to over $400 billion in 2027, and to at least $650 billion by 2030. Although Nvidia's AI GPU dominates the market with nearly 80% share, Bank of America predicts that by 2030, an ecosystem of ASICs based on customization, high performance, and low cost will capture nearly 20% of the market share.