Samsung Electro-Mechanics and Nvidia have signed a strategic partnership to supply ABF substrates, the packages that connect AI chips to the board they sit on. Under the deal, the two companies will jointly invest to expand dedicated plants in Sejong and Busan, South Korea, where Samsung Electro-Mechanics will set up new production lines reserved for Nvidia.
The supply covers substrates for Nvidia's compute processors and for high-speed networking switches, used in data centers to link chips together at very high speeds. According to the announcement, deliveries will start in 2026, and over several years volumes will grow at a double-digit annual rate. By 2028, production allocated to Nvidia is expected to account for a significant share of Samsung Electro-Mechanics' total annual substrate capacity.
Image: NVIDIA Newsroom
The technical challenge lies in growing complexity. Larger substrates with embedded components require ultra-fine circuitry, precise warpage control to keep the board flat, and more careful manufacturing to protect yields. To manage electrical noise from faster chips, the process embeds multilayer ceramic capacitors (MLCCs) and silicon capacitors directly into the substrate, technologies in which the Korean company is already strong.
Why the bottleneck matters
Nvidia is seeking substrate suppliers to secure mass production of its AI chipsets, in a market where technical barriers are very high. For Samsung Electro-Mechanics, the deal is a chance to push into this high-value segment and strengthen its global position. CEO Duck-Hyun Chang called the partnership a key infrastructure role for Nvidia's AI platforms. Debora Shoquist, Nvidia's executive vice president of operations, said the agreement broadens the company's substrate partner network and adds capacity to help scale accelerated computing platforms.
The context helps explain the move. Samsung has long said AI demand is saturating its lines, and in this picture substrates and memory have become the real constraint on AI expansion. According to DigiTimes, the company's investment plan for ABF substrates for data center and HPC chips totals about $5 billion across South Korea and Vietnam.
Impact on the Italian market
The deal does not directly change supply in Italy, but it affects the availability of AI chips for European companies buying computing infrastructure.
No comments yet. Be the first!