The AI chip supply chain is tightening again, but this time the focus isn’t on lithography or the number of wafers available. The bottleneck has shifted to a less visible area for the general public: materials and intermediate layers that turn a design into a ready-to-mount package for servers. In this context, Nomura has reaffirmed its buy recommendation on Unimicron Technology and raised its price target to TWD 418, which implies a potential upside of around 53% according to the report cited by the bank.
The move comes at a time when several signals point to an in critical components such as ABF substrates and BT, copper-clad laminates (CCL), and prepregs (PP). As is often the case in the semiconductor industry, when investment announcements and price hikes in raw materials stack up, the market interprets this not only as solid demand but also as growing faster than expected.
A Key Indicator: TSMC’s Record Capex Guidance for 2026
One of the recent triggers is the new investment benchmark set by the world’s largest contract chipmaker. TSMC has announced a capex range for 2026 of USD 52-56 billion, exceeding what much of the market had anticipated, signaling robust demand tied to AI. This spending, impacting equipment, capacity, and ecosystem, typically cascades through the supply chain—from wafers to advanced packaging and substrates.
For suppliers like Unimicron — which specializes in high-complexity substrates and PCBs — the investment cycle of major manufacturers acts as a compass. If the end customer accelerates, bottlenecks appear earlier in the links where capacity expansion is slow, costly, and requires certifications.
Resonac Raises Prices by 30% on CCL and Prepregs: Pressure on Chip “Ingredients”
The second milestone supporting this view comes from Japan. Resonac announced a 30% increase in copper-clad laminates and prepregs, effective from March 1, 2026. This adjustment is particularly significant because CCL and PP are fundamental materials in circuit boards and, by extension, part of the substrate and packaging ecosystem.
When a supplier of this caliber moves prices broadly, the industry tends to interpret it as evidence of two simultaneous forces:
- Real tension between supply and demand for materials (especially fiberglass fabrics like T-glass and E-glass, mentioned as sensitive areas in the market).
- Structural increase in costs (raw materials, energy, logistics), which then filters down to the prices of components closer to the end product.
Nomura Points to the Next Bottleneck: From T-glass to ABF Substrate
According to Nomura’s analysis, the market may be entering a phase where bottlenecks “migrate.” Specifically, the bank believes that the current strain, strongly linked to T-glass, could shift towards the ABF substrate level from late 2026 into 2027–2028.
This distinction is crucial. Scarcity of a specific material can be alleviated with capacity expansion, but a bottleneck in ABF involves more complex factors: industrial scaling, long lead times, rigorous qualifications, and, most importantly, sustained demand for high-margin products (AI servers, accelerators, high-performance networks) that “consume” the available capacity.
In its valuation, Nomura raises estimates and, accordingly, the price target: TWD 418, based on 25 times the estimated 2027 EPS of TWD 16.72 (up from a previous target of TWD 270 based on 20 times the EPS of TWD 13.5, as per the provided text). It also notes that the stock is trading around 16 times that 2027 EPS, leaving room for revaluation if the cycle confirms itself.
Industrial Subtext: AI Demands Stability, Not Just Chips
Behind these figures lies operational reality: AI is pushing data centers to plan years in advance. This results in contracts, capacity reservations, and pressure on components that, until recently, were almost invisible outside engineering teams. In this world, missing a schedule isn’t just about more wafers but ensuring the timely availability of substrates, resins, fibers, laminates, and prepregs.
The practical consequence is twofold: on one hand, the passing of price increases along the chain accelerates; on the other, companies exposed to the most critical part of the packaging process might act as early indicators of the cycle. Regarding Unimicron, Nomura seems to believe the market is still in an early phase of this movement, so valuations could still expand.
Frequently Asked Questions
What is an ABF substrate, and why is it critical in AI chips?
ABF (Ajinomoto Build-up Film) is a key material used to produce advanced substrates where high-performance chips are mounted. In AI applications, these substrates are essential for handling high interconnection densities, high-speed signals, and demanding thermal requirements.
What are copper-clad laminates and prepregs, and why does a 30% price increase matter?
CCL and prepregs are core materials for manufacturing printed circuit boards and laminated layers. An increase in their prices raises the cost of PCB fabrication and, in specific configurations, impacts the interconnection and packaging ecosystem, squeezing margins or pushing prices downstream.
Why does TSMC’s capex influence substrate companies like Unimicron?
A higher capex usually signals more capacity and expected demand. If more advanced chips are being produced (especially for AI), the need for substrates, packaging, and related materials also rises, with capacity expansion often taking longer.
What does it mean that the bottleneck is “shifting” from T-glass to ABF?
This suggests that even if the supply of certain fiberglass materials improves, the main limitation could become the industrial capacity of ABF substrates: more challenging to expand, with long lead times and certification requirements, leading to prolonged tension risks.