Ibiden to invest 151 billion yen to expand AI server IC substrate capacity

151 billion yen: Ibiden expands production of IC substrates for AI servers Source: Ban Dao Zong Heng Published: 2026-10-30 15:57 Japanese chip manufacturing Generate poster New equipment will be put into production in phases starting in fiscal 2029.

Japanese semiconductor packaging substrate manufacturer Ibiden plans to invest 151 billion yen (approximately 6.4 billion yuan) to expand production of high-performance semiconductor packaging substrates used in artificial intelligence (AI) servers. The investment is intended to meet growing market demand for central processing unit (CPU) packaging substrates. Ibiden President Koji Kawashima said, "We are fairly confident that semiconductor demand will remain strong until around 2030. We are continuing to expand production, but we are still far from being able to meet customer demand. IC substrates may become a bottleneck in semiconductor production."

Ibiden's board of directors has finalized a plan to expand production capacity for high-performance integrated circuit (IC) packaging substrates for CPUs at Building No. 6 of its Gama plant in Gifu Prefecture, Japan. The company also plans to invest in overseas production bases. New equipment will be put into production in phases starting in fiscal 2029. Ibiden did not disclose the scale of the newly added production capacity.

Ibiden believes that demand for CPU substrates will continue to grow as demand for AI inference computing power rises and agentic AI becomes more widespread. Ibiden also announced its results for the first half of fiscal 2026 (April-September): revenue was 262.546 billion yen and operating profit was 60.116 billion yen, up 34.3% and 84.6% year on year, respectively. The electronics business, which is responsible for producing semiconductor packaging substrates, was the main driver of earnings growth. Revenue in that segment rose 52% year on year to 172.540 billion yen, while operating profit surged 96.7% to 50.028 billion yen, with growth driven by better-than-expected orders for high-value-added products such as AI servers.

Ibiden also raised its full-year guidance for fiscal 2026: revenue is expected to rise from 550 billion yen to 565 billion yen, an increase of 2.7%; operating profit is expected to rise from 127 billion yen to 133 billion yen, an increase of 4.7%. Ibiden expects demand for products related to AI servers and general-purpose servers to remain strong, and demand for switch IC products will also continue to rise.

IC substrates are a core material in the chip packaging process, accounting for 40%-50% of material costs in mid- and low-end packaging and 70%-80% in high-end packaging. They feature high density, high precision, high performance, miniaturization and thinness, and together with chips, leads and other components after packaging and testing, they form a chip. In the AI chip field, IC substrates are core PCB products, used to provide support, heat dissipation and protection for chips.

In the AI chip substrate market, Ibiden holds a leading global position, with major customers including Nvidia, Intel, AMD and several other chip giants. A few days ago, at Nvidia's GTC Berlin conference, Jensen Huang announced that the company would work with a group of supply chain partners to jointly increase production capacity for CPO, substrates, advanced packaging and other segments. Among them, in the substrate segment, Nvidia plans to increase substrate capacity to 2.5 times the current level over the next three years and is negotiating agreements with multiple suppliers, with Ibiden prominently included.

It was disclosed that after expansion at Ibiden's Ono plant in Japan, the target capacity is three times the current level, with the new capacity expected to begin ramping in the first quarter of 2028; Samsung Electro-Mechanics will initially use existing capacity in South Korea for supply and will advance upgrades and new construction projects at its Sejong and Busan plants in South Korea. By 2028, the output allocated to Nvidia is expected to account for a considerable proportion of Samsung Electro-Mechanics' total annual packaging substrate capacity. Unimicron's KF substrate expansion in Taiwan, China, is expected to begin contributing capacity in the second quarter of 2027 and reach full operation by mid-2028.

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