(Bloomberg) — Unimicron Technology Corp., an obscure but critical player in making semiconductors, said that demand for high-performance computing chips is so strong that its production capacity will be strained for the next five years.
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The Taiwanese company makes Ajinomoto build-up film (ABF) substrate, a key part required for the packaging that protects the handful of chips needed to power computers or servers. Its customers include Intel Corp., Apple Inc., Advanced Micro Devices Inc. and Nvidia Corp. and its materials go into CPUs and GPUs for computers, servers and gaming consoles.
In a call after earnings, Unimicron President Michael Shen told analysts that its capacity is full until at least 2027. It shares climbed as much as 4.6% in Taipei on Thursday to a record high.
“Customers are now talking to us about orders for 2027, 2028, 2029 and 2030,” Shen said. “Lead time for new equipment now can be two to three years.”
Major semiconductors companies like Intel, Nvidia and AMD now all depend on ABF substrates to produce the most powerful chips in the world. That means that even as chipmakers and governments around the world spend hundreds of billions of dollars to attract and build fabrication capacity, the lack of that key component could hinder overall production for years.
Shen said existing customers have locked in the company’s ABF substrate capacity for the long term, suggesting new customers or new entrants may struggle to get the supplies they need.
ABF substrate makers have long been reluctant to invest aggressively in capacity because of money-losing slumps in the past and that has led to a tight supply of the component.
Unimicron’s shares have soared more than ten-fold over the past three years.
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