Samsung Electro-Mechanics Signs Strategic Partnership with Nvidia to Build Dedicated AI Substrate Lines in South Korea
Samsung Electro-Mechanics announces a strategic deal with Nvidia to construct dedicated production lines in Sejong and Busan for long-term supply of AI semiconductor substrates starting in 2026.
South Korean electronic components maker Samsung Electro-Mechanics announced on October 21 that it has signed a strategic business partnership with Nvidia. Under the agreement, Samsung Electro-Mechanics will establish dedicated semiconductor substrate production lines at its facilities in Sejong and Busan, South Korea, specifically to manufacture packaging substrates required for Nvidia's artificial intelligence (AI) chips.
The collaboration aims to strengthen the AI semiconductor supply chain and accelerate the expansion of next-generation AI infrastructure. The supplied products include substrates for Nvidia's compute chipsets and packaging substrates for network switches that handle ultra-fast inter-chip connections within data centers. Samsung Electro-Mechanics stated that these dedicated lines will begin supplying products in 2026.
The company projects that volumes supplied to Nvidia from its package substrate division will grow at an average annual rate of double digits starting this year. Looking ahead to 2028, Samsung Electro-Mechanics expects that supplies to Nvidia will account for a significant portion of its total annual package substrate production capacity. This move allows Nvidia to proactively secure the critical substrate supply network needed for mass production of AI chips, while enabling Samsung Electro-Mechanics to expand its high-value AI semiconductor substrate business and chase competitors such as Japan's Ibiden.
On the technical front, controlling the massive power noise generated by ultra-high-speed computing and improving power efficiency requires complex processes such as embedding Multi-Layer Ceramic Capacitors (MLCCs) and silicon capacitors inside the substrates. Samsung Electro-Mechanics emphasized its advanced Flip-Chip Ball Grid Array (FC-BGA) manufacturing competitiveness and high-reliability MLCC technology, stating it will act as a "total solution provider" to ensure the high performance and timely delivery of Nvidia's AI platforms.