NVIDIA expects an agreement with Samsung Electro-Mechanics and deals with two other suppliers to increase substrate capacity for its products to 2.5 times current levels within three years, addressing a constraint on AI infrastructure growth.
Samsung Electro-Mechanics said Oct. 21 that it would supply ABF package substrates for NVIDIA computing chipsets and networking switches that connect chips inside data centers. A package substrate carries signals between a chip and a circuit board. The companies plan to invest jointly in production dedicated to NVIDIA at Samsung Electro-Mechanics’ sites in Sejong and Busan, South Korea.
NVIDIA expects Samsung Electro-Mechanics’ existing South Korean operations to provide capacity immediately, alongside planned upgrades and new factories at the two sites. The wider expansion also includes Japan’s IBIDEN and Taiwan’s Unimicron Technology Corporation. NVIDIA’s 2.5-times capacity target covers the agreements with all three suppliers.
NVIDIA founder and CEO Jensen Huang described the pressure on production: “Demand is extraordinary. Capacity is the constraint.” Samsung Electro-Mechanics sees the partnership as an opportunity to grow its AI semiconductor substrate business. The companies did not disclose how much they will invest or how they will divide the cost.
Samsung Electro-Mechanics projects double-digit annual growth in the volume of substrates it supplies to NVIDIA over multiple years from 2026. It also expects capacity set aside for NVIDIA to account for a significant, unspecified share of its total annual package-substrate production capacity by 2028. The company gave no shipment figure or exact capacity share.
Making larger substrates with components embedded inside them adds complexity, Samsung Electro-Mechanics said. Fine circuitry helps limit signal loss, while flatness and control of warping affect production yields and reliability. The company also described designs that embed multilayer ceramic and silicon capacitors to manage power.
The NVIDIA agreement follows a separate 2027 substrate supply contract that Samsung Electro-Mechanics disclosed Oct. 19 with an unnamed customer. That one-year deal is worth 360.5 billion won; the company has announced no value for its NVIDIA agreement.
Samsung Electro-Mechanics said deliveries to NVIDIA under the multi-year agreement are scheduled to begin in 2026.
