Nvidia and Samsung Electro-Mechanics co-invest in ABF substrate capacity
Nvidia and Samsung Electro-Mechanics will jointly invest in dedicated ABF substrate production lines in South Korea, under a multi-year agreement that makes the Korean company a supplier of package substrates for Nvidia's AI processors and networking switches.
The new lines will be set up at Samsung Electro-Mechanics’ sites in Sejong and Busan, according to a press release from the company. Deliveries are due to start in 2026. Neither company has said how much they are investing or how the cost will be split.
The agreement covers substrates for Nvidia's compute chipsets and for the high-speed networking switches that connect chips inside data centres. Samsung Electro-Mechanics expects the volume it supplies to NVIDIA to grow at a double-digit annual rate. By 2028, Nvidia is projected to take what the company calls a significant portion of its total annual package substrate capacity.
For Nvidia, the deal is about securing supply. According to Samsung Electro-Mechanics, the partnership will give Nvidia a stable supply of the substrates needed for mass production of its AI chips and help ease supply chain bottlenecks in the AI infrastructure market. For Samsung Electro-Mechanics, it is an entry into the high-end AI substrate market, where the company says the technical barriers are exceptionally high.
Those barriers grow as substrates get larger and more complex. Ultra-fine circuit patterning is needed to keep signal loss down, while warpage control and substrate flatness determine yields and long-term reliability. AI chips also need power management that suppresses electrical noise at high computing speeds. To provide it, passive components such as multilayer ceramic capacitors (MLCCs) and silicon capacitors are increasingly embedded directly in the substrate.
Samsung Electro-Mechanics makes both. Its President and CEO, Duck-Hyun Chang, describes the company as a combined supplier, pairing its FC-BGA substrate manufacturing with its MLCC expertise.
The agreement comes shortly after Samsung Electro-Mechanics signed a KRW 360.5 billion supply deal for memory semiconductor package substrates with an unnamed global customer. It is part of a broader move by the company towards long-term contracts that it says reduce its exposure to business cycles.
