As AI accelerators grow larger and more complex, Samsung Electro-Mechanics and other substrate makers are set to capitalise on escalating shortages of advanced ABF substrates, with Meritz Securities predicting a significant market share and valuation boost for Samsung amidst ongoing capacity constraints.
Meritz Securities has argued that Samsung Electro-Mechanics is well placed to benefit from the tightening supply of high-end ABF substrates as AI accelerators become larger and more complex. The brokerage said the company’s aggressive capacity expansion could lift both its market share and its valuation premium, as demand for advanced substrates outpaces supply across the AI packaging chain.
The pressure point is shifting deeper into the semiconductor stack. At TSMC’s OCP APAC summit, the foundry said larger CoWoS packages and rising AI demand are turning ABF substrate availability into a major bottleneck for advanced packaging. As packages expand, wiring density rises and tolerances narrow, making even small material variations more damaging to yield, according to the accounts cited by Meritz Securities.
The imbalance is not just a question of substrate makers adding lines. Meritz Securities said channel checks indicate that Ajinomoto has told customers it is prioritising AI and other high-specification demand because supply remains extremely tight. Industry reports this month also described CoWoS capacity as heavily booked through 2026, while ABF shortages are expected to remain a constraint for several more years.
That matters because next-generation AI chips are getting much larger. Meritz Securities pointed to Nvidia’s planned Feynman accelerator, due in 2028, and said future AI packages could be three to five times larger than 2026 designs. Even if AI system demand lands at only half current forecasts, the brokerage said ABF substrate demand by area could still rise by 1.5 to two times versus 2026, with higher layer counts and lower yields adding further capacity pressure.
On that basis, Samsung Electro-Mechanics could be one of the main beneficiaries. Meritz Securities expects the company’s planned ABF investment to be larger than that of key rivals, giving it a stronger chance to gain share in the high-specification AI substrate market. In a supply chain where customers are increasingly favouring proven producers with stable yields and assured delivery, the brokerage said that scale, not just participation, is likely to command the higher premium.
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