AlN Powder: The Bottleneck Behind the Ceramic Substrate Boom

On September 13, 2026, according to institutional research meeting minutes, the global ceramic substrate market is ushering in explosive growth, with the market size expected to reach RMB 27.6 billion and RMB 70.7 billion in 2027 and 2028, respectively. In this industry chain, aluminum nitride powder has become a key bottleneck constraining industry development as the core sintering material for ceramic substrates, fully benefiting from the shifting competitive landscape between China and Japan.

From a material performance perspective, aluminum nitride thermal conductivity reaches 170 to 230 W/m·K, compared to alumina's 20 to 30 W/m·K, delivering 5 to 10 times greater heat dissipation capability. This excellent property makes aluminum nitride ceramic substrate the preferred choice for high-end thermal management scenarios. Specifically, aluminum nitride powder is prepared and sintered into substrates, then processed into final products widely used in optical communications, semiconductor packaging, and other fields.

In the optical communications sector, applications of aluminum nitride optical module ceramic components are rapidly penetrating. Institutions estimate that in 1.6T optical modules, the penetration rate of aluminum nitride TEC ceramic substrates will increase from 50% to 100%, while the penetration rate of aluminum nitride ceramic packages will rise from 20% to 50%. Meanwhile, approximately 45% of 800G optical modules have already begun adopting aluminum nitride materials, further driving upstream powder demand.

However, the supply side faces severe challenges. Currently, Japan's high-end aluminum nitride powder capacity stands at only about 1,200 tons per year, while demand from the optical module sector alone will exceed 2,000 tons in 2027, creating a significant supply-demand gap. More critically, Japanese manufacturers' capacity expansion pace is slow, with new capacity expected to take three years to come online, making it difficult to match explosive demand. Against this backdrop, slow overseas expansion has provided a valuable substitution window for the domestic aluminum nitride ceramic substrate industry chain.

From a market sizing perspective, assuming 65 million 800G units and 80 million 1.6T units shipped in 2027, the optical module market alone could reach RMB 30 billion, corresponding to demand for thousands of tons of high-end aluminum nitride powder. Furthermore, aluminum nitride advanced packaging materials and PCB ceramic lamination and other emerging applications continue to open the demand ceiling, driving continuous expansion of high-end aluminum nitride powder demand.

In summary, powder remains the short-term bottleneck, and Japanese manufacturers' three-year capacity expansion timeline cannot match the volume ramp of AI optical modules and HBM. Domestic aluminum nitride powder manufacturers with low oxygen content, low ion content, and batch-to-batch stability will gain a window to move from "alternative" to "primary supplier" in 2027–2028, but whether they enter core supply chains still depends on customer qualification, oxygen content, and GD-MS stability.

Xiamen Juci specializes in manufacturing High Purity AlN Powder, AlN Granule, Thermal Conductive Filler, and AlN Ceramics—products that have earned consistent recognition and positive feedback from customers worldwide. Should you have any requirements, please do not hesitate to contact us.

Contact: Jenny Qin / 진현혜 

Phone: +86 151-5177-8700

Wechat ID: JENNY-8866

Xiamen Juci Technology Co., Ltd.

Email: qinxianhui@chinajuci.com

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