Key Takeaways:
Austrian circuit board maker AT&S is betting €2 billion that the AI chip boom will require a parallel revolution in the substrates that connect them.
AT&S, the Austrian circuit board manufacturer, will invest as much as €2 billion ($2.3 billion) to expand its plant in Kulim, Malaysia, betting that surging AI chip demand will require a parallel buildout of the advanced substrates that connect processors to memory and power systems.
"We will fully expand our site in Kulim," Chief Executive Officer Michael Mertin told Reuters, adding that the investments are fully supported by long-term customer commitments.
The company raised its 2026/27 outlook after securing agreements with Advanced Micro Devices and a second major technology client, which industry sources identified as Intel. AT&S expects to count at least five leading US chipmakers as customers. Shares surged as much as 30% to a record €200 in Vienna trading.
The expansion positions AT&S as a critical enabler in the AI supply chain, where advanced substrates — the interposers and printed circuit boards that package high-bandwidth memory with GPUs — have become a bottleneck. The company said it will likely suspend dividends for the current and coming year to fund the buildout.
The Kulim site already houses two plants, and the new investment will use existing buildings and add capacity for IC substrates — the precision-layered boards that sit between a chip and its motherboard. These components have grown in complexity as AI accelerators such as Nvidia's H100 and AMD's MI300X require thousands of connections running at terabyte-per-second speeds.
AT&S is one of a handful of global suppliers capable of producing the advanced substrates needed for AI chips, alongside Japan's Ibiden and Taiwan's Unimicron. The Austrian company's bet comes as TSMC and Samsung Foundry race to scale advanced packaging capacity, with CoWoS (chip-on-wafer-on-substrate) supply remaining a key constraint for Nvidia's GPU shipments through 2027.
The investment shows how the capital intensity of the AI supply chain extends beyond chip fabrication. While TSMC's $100 billion-plus fab buildout draws most attention, the substrate layer has become a multi-billion-dollar bottleneck. AT&S's €2 billion commitment suggests that substrate capacity, not just wafer starts, will determine how fast the AI infrastructure buildout can proceed.
AT&S shares trade at about 15 times forward earnings following the surge, a discount to semiconductor equipment peers. The company's decision to forgo dividends for two years shows management expects the substrate shortage to persist through the decade, creating a multi-year revenue runway. Investors should watch whether TSMC's CoWoS capacity expansion eases or exacerbates substrate demand.
This article is for informational purposes only and does not constitute investment advice.
