- Unimicron is the author's top ABF pick: its 2027 indexed ASP is roughly 3.6x 2018, versus 2.4x for Kinsus and 1.8x for NY PCB, reflecting higher-value product mix.
- Advanced ABF capacity is not fungible; large substrates, complex architectures, T-glass, specialized equipment, yields, and customer qualification separate tier-1 effective capacity from nominal industry capacity.
- The author's timing thesis sees 2027 becoming allocation-constrained and 2028 worse; scarcity-driven ASP increases should expand margins more than 2026's cost-pass-through increases, benefiting Unimicron and Ibiden.
Investment pitches
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73 77 - Morgan Stanley projects ABF substrate demand will exceed supply by 9.3% in 2027 and 13.7% in 2028, as new capacity mostly arrives from late 2028 onward.
- Larger AI chips, more packaging layers, and complex manufacturing increase demand while reducing suppliers’ effective output.
- Supply-driven price increases above cost could expand manufacturers’ margins; Morgan Stanley forecasts prices rising over 25% in 2027, though negotiations determine timing and magnitude.
- Morgan Stanley maintains overweight ratings and raises earnings and target prices for Unimicron Technology and Nan Ya PCB; its market forecast reaches $20.9 billion by 2030.