Foreign Investors See AI Demand Driving Unimicron into Early Upcycle

ABF substrates are critical components connecting AI GPUs, ASICs and server CPUs to motherboards. AI chips are larger and require more layers and higher production yields, accelerating capacity consumption. AI chips and server CPUs are estimated to account for 85% of demand by 2028, up from 23% in 2020, as the industry shifts toward growth driven by AI infrastructure.

On April 27, 2026, HSBC Securities forecast that the ABF substrate supply shortfall would widen from 8% in 2026 to 27% in 2027 and 35% in 2028, with price increases expected to continue through the first half of 2027. It maintained buy ratings and raised its target prices for Unimicron, Kinsus and Nan Ya PCB to NT$1,060, NT$643 and NT$1,050, respectively.

ABF substrates are critical components in advanced chip packaging. As AI and high-performance computing chips become larger and more computationally dense, substrates must also increase in size and layer count. Unimicron Technology has advanced ABF substrate capacity, making utilization rates and its ability to pass on costs key to earnings and its share-price valuation.

As of July 20, 2026, the report did not identify the local institution it cited or disclose when its research was published. The institution said the shift toward larger ABF substrates with more layers remained intact, while utilization of Unimicron’s advanced capacity stayed high and the company had passed costs on to customers. It therefore maintained a “buy” rating and raised its target price to NT$965.