The Chip Shortage Has Made a Star of This Little-Known Component

The global chip shortage is giving rise to a small group of little-known companies whose products are increasingly essential to the plans of semiconductor industry titans. From a report: The companies make parts called substrates, which connect chips to the circuit boards that hold them in personal computers and other devices. The components are relatively simple but as vital to a computer chip's operation as the silicon at its core. Substrate manufacturing has long been seen as a backwater of the global chip supply chain. The sector's relatively low margins have led to underinvestment and, in recent months, added to the pain of a global chip shortage that has constrained personal computer sales, caused some auto makers to idle plants and raised costs for electronic devices.

Supplies of substrates used in some of the most advanced chips are particularly tight, and some industry specialists said they could remain in short supply for years. That has made sourcing the products a priority for chip companies including Intel, Nvidia and Advanced Micro Devices and given new clout to the unheralded companies that specialize in making them. 'Right now, all you have to do is say you manufacture substrates, and you get business -- it's insane,' said Nicholas Stukan, chief business development officer at Zhuhai Access Semiconductor, a substrate manufacturer based in southern China. He said chip makers are begging for supply and are willing to pay much higher prices than usual to satisfy antsy customers. Intel Chief Executive Officer Pat Gelsinger discussed his company's efforts to address substrate shortages in the company's earnings calls this year -- the first time in a decade the topic was featured in any meaningful way in Intel's quarterly results presentation. Mr. Gelsinger is expecting the chip crunch to last into 2023 as the chip industry, including substrate suppliers, boost capacity. Adding a new substrate factory can take a year or two, he said in a July interview. 'This is a challenging demand environment,' he said.

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