Substrates in the spotlight
The chief executive of chip materials maker AT&S, Michael Mertin, says advanced semiconductor substrates are becoming a hidden bottleneck in the race to build AI systems. He calls the technology the "new gold" of the semiconductor industry, arguing that customers are willing to pay a premium as they co-develop the next generation of AI chips with his firm.
Why the part matters
As chips process data faster, the ability to connect their components and move power efficiently matters more to performance. Substrates are the packages that carry signals and power between a processor and the board around it. Tight supply of these parts can delay finished chips even when the silicon itself is ready, which is why suppliers now sit at the centre of planning talks.
Pressure across the chain
The comments add to a run of supply warnings in the AI hardware chain. Memory makers have shifted capacity to high-bandwidth memory and other data-centre products, lifting prices for the DRAM used in phones and laptops. Analysts say this kind of constraint is one reason AI capital spending keeps climbing, and why the long end of the bond market keeps repricing as financing costs rise.
Markets have taken notice. Chip stocks have swung in recent sessions as investors weigh record demand against the cost of building new capacity. Some analysts warn that booming AI chip spending may be masking earnings issues elsewhere in the industry. For now, suppliers of the less visible parts, from substrates to the sealed feedthroughs used inside vacuum tools, are gaining leverage in negotiations.
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