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As demand for generative AI, high-performance computing (HPC), and data center infrastructure continues to accelerate, the global IC substrate industry is entering a new phase characterized by upgrades in high-end product specifications, tight supplies of critical materials, and intensifying competition in advanced packaging technologies.
According to the latest observations from the Taiwan Printed Circuit Association (TPCA) and the Industry, Science and Technology International Strategy Center (ISTI) of the Industrial Technology Research Institute (ITRI), the global IC substrate market reached an output value of US$14.75 billion in 2025, representing year-on-year growth of 18.5%. Driven by demand from AI servers, high-speed switches, ASICs, GPUs, and high-end memory applications, global substrate output value is projected to reach US$19.51 billion in 2026, up 32.3% year on year, underscoring the increasingly critical role of high-end IC substrates in the AI computing and advanced packaging supply chains.
AI and HPC Drive Upgrades in IC Substrate Specifications
The global IC substrate market returned to a growth trajectory in 2025. Output value for BT substrates reached approximately US$7.03 billion, up 18.2% year on year, while ABF substrate output value totaled approximately US$7.72 billion, representing annual growth of 18.6%.
TPCA noted that the latest wave of market growth is being driven not only by a recovery in end-market demand but, more importantly, by specification upgrades fueled by AI and high-performance computing. As demand for AI servers expands rapidly, requirements for high-end ABF substrates used in GPUs, ASICs, and high-speed networking switch chips continue to rise. At the same time, improvements in chip performance are driving increases in substrate size, layer counts, and process complexity, further enhancing the market value of high-end substrates.
In 2026, AI computing demand is continuing to expand from model training toward large-scale inference and agentic AI, while major cloud service providers continue to increase investment in AI infrastructure. Gartner forecasts that global server shipments will reach approximately 14 million units in 2026, up 11.6% year on year. Of these, AI server shipments are expected to total approximately 3.7 million units, representing year-on-year growth of 55.9%, providing continued support for demand for high-end ABF substrates.
By comparison, although the smartphone and personal computer markets are benefiting from replacement demand and new product cycles, their recovery remains relatively moderate due to rising memory prices, higher component costs, and macroeconomic uncertainty. As a result, the IC substrate market is expected to show an increasingly differentiated pattern, with strong demand from AI and high-performance computing applications contrasting with relatively limited growth in consumer electronics.
Taiwan Ranks No. 1 Worldwide in ABF Substrate Market Share
From the perspective of the global competitive landscape, based on the headquarters locations of substrate manufacturers, Taiwanese companies collectively accounted for 35.6% of the global IC substrate market in 2025, ranking first worldwide. South Korea and Japan followed with market shares of 27.9% and 22.7%, respectively.
In the ABF substrate segment, Taiwanese manufacturers held a combined market share of 41.3%, also ranking first globally. This demonstrates Taiwan’s critical position in the high-end IC substrate, AI chip packaging, and high-performance computing supply chains.
In the BT substrate market, South Korea benefited from its strong smartphone and memory industry base, with domestic manufacturers collectively holding a 36.4% market share, the highest worldwide. Taiwan ranked second with a 29.4% share.
Despite robust AI-related demand, the supply of high-end substrates continues to face bottlenecks in critical materials. TPCA noted that supplies of low-CTE glass fiber cloth required for high-end substrates remain tight. New production capacity requires time to come online and ramp up, while the introduction of new suppliers must undergo customer qualification processes, making it difficult to significantly increase supply capacity in the short term.
As high-end ABF substrates for AI chips continue to evolve toward larger sizes, higher layer counts, and greater circuit density, manufacturing complexity and production cycle times are increasing simultaneously. Combined with limitations related to yield rates, material availability, and customer qualification, the pace of supply expansion remains relatively constrained.
With demand continuing to grow while supply flexibility remains limited, prices of high-end substrate products are expected to remain relatively high. This pricing effect is also expected to become an important factor driving growth in the overall substrate market value this year.
Glass Substrates Emerge as a Medium- to Long-Term Direction for Advanced Packaging
In advanced packaging, the continued expansion of AI chip package sizes is driving CoWoS technology toward larger interposers and greater package areas, placing increasingly stringent requirements on substrates in terms of warpage, coplanarity, signal integrity, and power delivery performance.
Glass core technology, with its high rigidity, excellent flatness, and dimensional stability, is regarded as an important development direction for next-generation high-end substrates. However, glass substrates remain at the stage of technology validation and supply chain development. Challenges such as material brittleness, consistency in through-glass via (TGV) metallization, processing techniques, and reliability validation still need to be addressed.
Initial adoption is expected to focus primarily on AI GPUs, ASICs, and other HPC chips featuring large package sizes and high power consumption.
TPCA stated that the key drivers of the global IC substrate industry in 2026 extend well beyond a recovery in end-market demand. Instead, the industry is increasingly being shaped by product mix upgrades driven by AI and HPC applications, bottlenecks in critical material supplies, and evolving divisions of labor and collaboration models across the advanced packaging supply chain.
Taiwan has already established a leading position in the global ABF substrate market. Going forward, the industry will need to further strengthen R&D capabilities in high-end manufacturing processes, enhance the resilience of critical material supplies, and deepen cross-sector collaboration. By integrating capabilities across semiconductors, packaging, materials, equipment, and testing, Taiwan can further consolidate its strategic position in the global AI supply chain and next-generation advanced packaging ecosystem.
TPCA Show and IMPACT to Take Place in October, Spotlighting AI, PCB, and Advanced Packaging Trends
This year’s TPCA Show will take place from October 20 to 22 at the Taipei Nangang Exhibition Center, bringing together major PCB and IC substrate supply chain players from around the world to showcase the latest technological achievements. The exhibition is expected to reach a record scale.
In response to evolving global market demand, TPCA Show will feature a dedicated advanced packaging zone, presenting a comprehensive range of trends and solutions under the theme of “AI × PCB × Advanced Packaging.”
On the opening day, Unimicron Technology Chairman T. J. Tseng will deliver a keynote address. The following day, the CommonWealth Leaders Summit at TPCA Show will bring together decision-makers and industry leaders from across the electronics supply chain for in-depth discussions on global market trends.
A series of advanced materials and solutions presentations will also take place during the exhibition, which is expected to attract industry professionals from around the world.
Opening one day earlier on October 19, the four-day IMPACT-IAAC 2026 International Conference on Electronics Packaging and PCBs will bring together distinguished speakers from leading academic and industrial organizations, including Stanford University, ASE, Intel, SHINKO, and IEEE, making it one of the largest and most influential annual events for the PCB and electronics industries this year.
The conference will focus on developments in advanced electronics, packaging, and PCB technologies in the AI era. Key topics will include glass substrates, panel-level packaging, advanced substrates, heterogeneous integration, and co-packaged optics (CPO).
With more than 40 technical forums and exchange sessions scheduled, IMPACT-IAAC 2026 will help industry participants better understand emerging technology developments and new market opportunities driven by AI and advanced packaging.
