BT Carrier Shortage Impacts Storage Supply Chain, Phison Warns of Disruption Risk

Pan Chien-cheng, CEO of NAND controller IC giant Phison Electronics, has warned that the ongoing shortage of BT substrates for packaging will affect the supply chain of storage components such as Flash, SSDs, and controllers.

Pan Chien-cheng pointed out that the supply of BT substrates for packaging is severely tight, with lead times having stretched to 210 days, approximately 7 months. If customers place additional orders on short notice, delivery will not be possible. As a result, the company’s order visibility has lengthened significantly, and he estimates that there may be a risk of supply chain disruption due to shortages starting from mid to late August.

He further explained that the shortage of BT substrates has a wide-ranging impact, affecting various packaging components including NAND controllers, eMMC, UFS, and BGA. It is expected that supply chain pressures will continue into the third quarter and even through the end of the year. Pan Chien-cheng noted that customers have been continuously adding orders recently, and even though Phison originally had sufficient materials in stock, it is still facing tight production capacity. He stated bluntly, “Some module manufacturers cannot get the goods, so they have to place orders with us, but we really cannot accept new orders anymore.”

Faced with a large number of additional orders in the past month, Phison has been unable to fully meet the new demand, and supply chain pressures are expected to continue into the latter part of the third quarter. He emphasized that controller packaging is also facing pressure from raw material supply, and the lead time for BT materials required for SSD packaging ICs has been extended to 210 days, making “last-minute additional orders completely impossible.”

To ensure stable deliveries, Phison has begun adjusting its shipment schedule, prioritizing supply to long-term cooperative customers to avoid a situation where there are no goods to deliver from September to November due to short-term concentrated shipments. It also calls on customers to place orders as early as possible to prepare, otherwise it will be difficult to meet the needs of subsequent processes.

Industry insiders pointed out that the current round of BT substrate price increases is mainly due to the continued tight supply of key raw materials such as low-coefficient of thermal expansion (low-CTE) glass fiber cloth and high-strength glass fiber (T-Glass), which has put pressure on the cost of substrates for applications such as memory, RF, WiFi, and AP.

Surveys of the supply chain by institutions also show that major Taiwanese substrate manufacturers Nanya and Kinsus have increased the prices of BT substrates, and it is estimated that the price increase in the third quarter will reach 10% to 20% quarter-on-quarter.

Pan Chien-cheng noted that the strong appreciation of the New Taiwan dollar against the US dollar in the second quarter had an impact on Phison’s US dollar-denominated revenue, but Phison still achieved revenue of over NT$6 billion in June, indicating strong actual market demand.

Looking ahead to the NAND market situation in the third and fourth quarters, Pan Chien-cheng said that Phison, as a major customer, will receive some preferential treatment from original manufacturers, but now prices are renegotiated every month, and the market is still in a state of supply and demand stalemate. He believes that in the long term, as AI applications continue to heat up and data generation grows explosively, the global storage market is rapidly moving towards structural growth. The trend of SSDs replacing traditional HDDs is becoming increasingly clear, and it is estimated that after 2030, SSDs will become the mainstream storage device.