Nan Ya PCB Launches Largest-Ever Expansion: NT$10B+ Capex for AI Chip Substrates

Nan Ya PCB Commits Record Investment for AI Substrate Growth

Nan Ya Printed Circuit Board Corporation (8046.TW), part of Taiwan’s Formosa Plastics Group, has announced its largest-ever capital expenditure plan — exceeding NT$10 billion (approximately $310 million) for 2026 — to expand production capacity for advanced IC substrates serving the AI and high-performance computing markets.

The announcement came during the company’s annual shareholders’ meeting, where Chairman Tsou Ming-jen outlined expansion plans across facilities in New Taipei, Taoyuan, and China, as reported by Taiwan News on May 14, 2026.

AI Demand Drives Unprecedented Growth

Nan Ya PCB’s expansion is specifically targeting ABF (Ajinomoto Build-up Film) substrates used in:

• AI GPU packages — NVIDIA, AMD, and custom ASIC accelerators require large-format, high-layer-count ABF substrates
• High-performance switches — data center networking ASICs connecting GPU clusters
• Next-generation server processors — Intel and AMD server CPUs with increasing I/O density
• Edge AI devices — accelerators for inference workloads requiring compact, high-density packaging

The company reported March 2026 revenue of TWD 4.291 billion ($136 million), up 35.5% month-on-month and 39% year-on-year — the highest monthly revenue in nearly three years, according to IC&PCB Union.

ABF Substrate Supply Tightening

The expansion comes as analysts warn of a structural ABF substrate shortage:

• Supply shortfall projections: Morgan Stanley estimates ABF substrate supply deficits of 26% in 2027 and 46% in 2028 as AI chip die sizes expand faster than substrate capacity additions
• Major customers locking capacity: Cloud hyperscalers and ASIC designers are securing multi-year allocation commitments, potentially squeezing smaller customers
• Technology transitions: Each new GPU generation (moving from CoWoS to larger interposer sizes) requires proportionally larger and more complex substrates

Chair Tsou noted that “breakthroughs in large language model technology and AI reasoning capabilities are accelerating upgrades for AI servers and high-end switches,” driving the company to invest aggressively in advanced substrate manufacturing processes.

Capacity Expansion Details

According to the company’s 2025 Operation Briefing published on the Nan Ya PCB website:

ABF Substrates (primary growth driver):

• Developing application substrates for next-generation AI servers
• Collaborating with customers on application-specific integrated circuit (ASIC) substrates
• Targeting high-performance computing and advanced packaging integration

BT Substrates (secondary growth area):

• 5G antenna modules
• Smart glasses and AR/VR devices
• Data center storage device controllers
• Solid-state drive controller chips
• Power IC controller chips for AI applications

The company maintains approximately 80% of production capacity in Taiwan, with the remainder in China.

Industry Context: Taiwan Substrate Makers Lead AI Hardware Supply

Nan Ya PCB’s expansion is part of a broader investment wave across Taiwan’s PCB and substrate industry:

• Unimicron — TWD 11 billion capital investment, recently upgraded by Morgan Stanley
• Nan Ya PCB — TWD 1.8 billion additional capital, plus this NT$10B+ capex plan
• Kinsus — expanding ABF capacity for NVIDIA CoWoS packages
• Tripod Technology — record Q1 2026 results driven by Apple and AI server demand

Together, these companies form the critical link between chip designers and the physical substrates that connect silicon to the rest of the system.

What This Means for the PCB Industry

The AI substrate boom has cascading effects throughout the PCB supply chain:

1. Material competition — ABF film, low-loss prepregs, and HVLP copper foils are shared between IC substrates and high-performance PCBs, tightening supply for both
2. Engineering talent drain — substrate manufacturers offering premium compensation are attracting process engineers from conventional PCB fabricators
3. Equipment demand — laser drilling, sputtering, and fine-line patterning equipment has extended delivery times affecting all HDI manufacturers
4. Technology spillover — advanced processes developed for substrates (SAP, mSAP) are migrating to mainstream PCB production, raising capabilities industry-wide

AtlasPCB Perspective

While AtlasPCB focuses on PCB fabrication rather than IC substrates, the substrate industry expansion directly affects our customers and capabilities:

• Material availability — we monitor substrate-driven material demand to proactively secure supply for customers needing low-loss laminates
• Technology adoption — substrate-grade processes like mSAP (modified Semi-Additive Process) are entering our production roadmap for ultra-fine-line HDI
• AI hardware ecosystem — boards that surround AI chip packages (motherboards, power delivery, thermal modules) remain our core capability

Sources: Taiwan News (May 14, 2026), IC&PCB Union (April 2026), DigiTimes (May 18, 2026)

Image: Brian Kostiuk via Unsplash