Key Findings
NVIDIA has established agreements with several supply chain partners to scale production of critical AI infrastructure components. The primary objective is to eliminate capacity constraints currently hindering the buildout of accelerated computing and full-stack AI factory platforms. Key expansions include a 2.5x increase in substrate capacity over the next three years and a projected doubling of total semiconductor testing capacity between calendar 2026 and 2027.
Technical Details
- Substrates: NVIDIA is providing a multibillion-dollar capacity reservation advance to IBIDEN for its Ono Plant in Japan, targeting a 3x increase in capacity with ramping starting in Q1 2028. Samsung Electro-Mechanics is adding capacity via existing operations in South Korea and new facilities in Sejong and Busan. Additionally, Unimicron’s KF substrate expansion in Taiwan is expected to add capacity in Q2 2027, reaching full capacity by mid-2028.
- Advanced Packaging: NVIDIA and Amkor plan to increase interposer wafer capacity in South Korea by more than 300% by the end of 2028.
- Testing: A $1.1 billion capacity reservation advance to KYEC will support new U.S. facilities, with high-volume production targeted for April 2027. Expanded operations in Singapore are expected to begin high-volume production in February 2027.
- Optical Engines: In collaboration with SPIL, NVIDIA is expanding manufacturing in Taiwan for co-packaged optics. Capacity is targeted to increase 15x by mid-2027, with a further doubling by the end of 2028.
Background & Context
According to NVIDIA founder and CEO Jensen Huang, the current AI infrastructure buildout is the largest in human history, creating extraordinary demand that has made capacity the primary constraint. To address this, NVIDIA is diversifying its supplier base and providing financial advances to ensure the scalability of production.
Significance & Outlook
These expansions across Japan, South Korea, Taiwan, Singapore, and the U.S. are designed to provide the redundancy and resiliency required to power the new industrial revolution. By securing these capacity increases through 2028, NVIDIA aims to ensure the availability of the hardware necessary for next-generation AI supercomputing platforms.
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