Nvidia Invests in AI Supply Chain to Expand Production Capacity

What happened

On Oct. 21 local time, Nvidia announced that, to meet growing demand for AI infrastructure, it is working with Samsung Electro-Mechanics, Ibiden, Amkor Technology, King Yuan Electronics Co. (KYEC), Siliconware Precision Industries (SPIL) and Unimicron, making advance payments to secure semiconductor packaging substrate, testing and co-packaged optics (CPO) capacity. CEO Jensen Huang said demand is enormous but capacity is constrained. Substrates: Nvidia is expanding agreements with Ibiden, Samsung Electro-Mechanics and Unimicron to increase semiconductor package substrate capacity 2.5-fold over the next three years; Nvidia has reserved several billion dollars worth of capacity at Ibiden with advance payments, aiming to triple capacity at its Ono plant in Japan, with the additional capacity expected to begin full-scale operations in the first quarter of 2028; Samsung Electro-Mechanics will begin supplying next-generation package substrates from its South Korean facilities in 2026, with Nvidia supporting equipment upgrades at its Sejong and Busan plants plus construction of a new factory; Nvidia signed a capacity reservation agreement with Unimicron to expand its KF plant in Taiwan, with capacity beginning to increase in the second quarter of 2027 and expected to reach full utilization by mid-2028. Advanced packaging: Nvidia is working with Amkor to expand capacity in Gwangju, South Korea, planning to increase interposer wafer capacity by more than 300% by the end of 2028. Testing: Nvidia committed $1.1 billion in advance payments to reserve capacity at KYEC; expansion in the United States, Taiwan and Singapore will double total testing capacity in 2027 from the 2026 level, with a new U.S. facility scheduled for mass production in April 2027 and Singapore lines in February 2027. CPO: Nvidia is expanding optical engine capacity for CPO with SPIL in Taiwan, rising 15-fold by mid-2027 and doubling again by the end of 2028. All expansions are planned/expected arrangements, not yet achieved results.

Impact and signal

Affected components and suppliers

Source and time

Source: The Elec · 10/22/2026 · View original source