▶ ABF Substrates Emerge as a Key Battleground in CPO Integration

• Amid explosive growth in ultra-high-speed transmission demand for AI data centers, TSMC's Co-Packaged Optics (CPO) strategy is also moving up a level.

• TSMC recently disclosed that its "COUPE on Substrate" solution — which integrates a Compact Universal Photonic Engine (COUPE) — is on track to enter mass production in 2H 2026.

• The industry reads this as more than just an optical communication upgrade. It signals that AI supply chain competition is expanding beyond advanced process and advanced packaging into the ABF substrate and CPO integration domain.

• As NVIDIA's next-generation Vera Rubin platform continues to raise the integration level across AI GPUs, HBM, and ultra-high-speed networking interconnects, the importance of high-end substrates is set to grow rapidly.

• In particular, semiconductor industry participants note that if CPO establishes itself as the mainstream AI server architecture going forward, NVIDIA may move to preemptively secure high-end ABF substrate capacity through long-term agreements (LTAs), prepayments, and strategic partnerships.

• This would be a strategic move aimed at preventing a repeat of the past CoWoS and HBM supply shortages.

• In addition, compared with conventional CPU substrates, substrates for AI GPUs and ASICs feature significantly larger area and substantially higher layer counts, expanding ABF material consumption by 5–10x.

• With demand for AI GPUs, ASICs, and high-end networking chips continuing to grow, the supply-demand structure for high-end ABF substrates is expected to remain tight for an extended period.

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