Reserving capacity in the supply chain
Nvidia announced multi-billion-dollar agreements with six major suppliers at GTC Berlin on October 21. The deals cover expanding capacity in substrates, advanced packaging, semiconductor testing, and optical engines to overcome bottlenecks in AI accelerator production. Commitments and production roadmaps extend through 2028.
Which companies are involved?
- Substrates: Agreements with Ibiden, Unimicron, and Samsung Electro-Mechanics. Nvidia plans to secure 2.5x dedicated substrate capacity over the next three years.
- Optical engines: A deal with SPIL aims to expand manufacturing capacity for optical engines used in co-packaged optics by 15x by mid-2027.
- Advanced packaging: Nvidia and Amkor target a 300% increase in interposer wafer capacity by the end of 2028.
- Testing: Nvidia will invest $1.1 billion to double semiconductor testing capacity by 2027, reserving capacity from KYEC.
Why it matters
Nvidia CEO Jensen Huang said, "We are in the midst of the largest infrastructure buildout in human history. Demand is extraordinary. Capacity is the constraint." The company is working to resolve supply chain bottlenecks in advance to maintain its lead in the AI chip market. These deals could be decisive in shaping chip supply for AI data centers in the coming years.
