Five Bottlenecks in AI Computing Power Chain Intensify, Expected to be Scarce Until Next Year

The surge in demand for AI servers is driving the electronics components and materials industry chain into a new cycle of supply and demand tension, with the degree of tightness persisting and intensifying. Goldman Sachs' latest research report covers 11 key segments from semiconductors, passive components to special materials, among which the supply and demand forecasts for five major areas have been significantly revised upwards. The supply and demand gap for MLCC, ABF substrates, PCB/CCL, memory, and indium phosphide substrates has continued to expand in the past four months and is unlikely to reverse before 2027.

MLCC: Continuous tightening of supply and demand, potential for price increase

AI servers will drive the demand for MLCC to grow about 4.3 times from 2025 to 2030, coupled with strong demand from automotive applications, the industry supply and demand are significantly tightened. Customers with weaker demand such as mobile phones and PCs, to avoid subsequent supply shortages, have started to sign long-term supply contracts, and defensive order grabbing further exacerbates the tense situation.

The annual capacity growth of the MLCC industry is capped at about 10%, and the expansion is slow due to constraints on equipment and materials. The limited additional capacity will be absorbed by AI servers and automotive applications, and the tight situation will continue throughout the cycle. Goldman Sachs has revised the MLCC price change estimate for 2026 to 0% to 5%. If the average price increase reaches 5%, it will significantly boost the operating profit of leading manufacturers in the fiscal year 2027.ABF Substrates: Specifications continue to upgrade, supply expansion difficult before 2027

ABF substrates are the core materials for AI chip packaging, with supply and demand prospects remaining tight, driven by the expansion of AI chip shipments and the rapid upgrade of single chip substrate area and layers. Goldman Sachs has revised the price increase expectation for ABF substrates in 2026 from 20%-30% to 30%-35%.

As the specifications of AI chip substrates continue to improve, the expansion of size and increase in layers will reduce production yield and increase panel loss, leading to a decrease in unit effective supply. Major Taiwan ABF substrate manufacturers have essentially booked their capacity until the end of the year, with no significant capacity expansion plans before the second half of 2027, and the extended delivery cycle will continue to strengthen the industry's pricing power.PCB/CCL: Leap in technical specifications, average annual price increase exceeds 30%

AI servers promote a dual upgrade for PCB/CCL, with CCL grade iterating from M7 to M9 and PCB layers increasing from 22 to more than 36, driven by core data transmission and computing performance demands. Goldman Sachs expects the average price of AI-used CCL/PCB to maintain an annual growth rate of more than 30% in the future.

The annual capacity expansion of first-tier PCB/CCL suppliers ranges from 20% to 30%, which is lower than the growth rate of AI server demand. Excess demand spills over to second and third-tier suppliers, but the yield rate of second and third-tier manufacturers is about 20% lower than that of first-tier, making it difficult to diversify demand. First-tier suppliers will continue to enjoy supply, demand, and pricing advantages.Memory: A significant increase in the supply and demand gap in 2026, price expectation significantly revised upwards

Memory is the category with the largest forecast adjustment this time, with Goldman Sachs significantly revising the price expectations for 2026. The DRAM price increase was revised from about 150% to 250% to 280%, and the NAND price increase from about 100% to 200% to 250%.

The supply and demand tension for memory is driven by three factors: strong server demand, limited new industry capacity that prioritizes HBM supply, and extremely low industry inventory levels. Goldman Sachs has extended the expectation of memory supply and demand tension to 2027, judging that the supply tension in 2027 is still difficult to alleviate.Indium Phosphide Substrates: Core materials for optical interconnection, continued tight supply situation

Indium phosphide substrates are the core materials for AI optical interconnection. The supply and demand tension in 2026 will continue, with prices expected to increase by about 15%. Major industry suppliers have announced expansion plans multiple times, but new capacity will only be phased in around the fiscal year 2028 at the earliest, making it difficult to alleviate the medium-term capacity bottleneck, and the tight supply situation will continue into the next fiscal year.Wafer Found