Reuters, citing a Korean newspaper, reports Tesla and Nvidia will invest $2.8B in Samsung Electro Mechanics to build AI chip substrate lines
Samsung Electro-Mechanics gets $2.8 billion chip investment from Tesla, Nvidia, report says
Context
Advanced chip substrates are becoming a bottleneck for AI hardware, and the biggest buyers are now paying suppliers directly to secure capacity.
Reuters is relaying a report from Maeil Business Newspaper that cites industry sources, and the companies had not confirmed the amounts in the coverage found. FC BGA substrates are the base layers that high end processors such as AI accelerators sit on.
Deep dive
On October 22, Reuters posted that Samsung Electro Mechanics gets a $2.8 billion chip investment from Tesla and Nvidia, according to a report. Its story says the South Korean company will receive investment valued at 3.7 trillion won to build facilities making FC BGA substrates for AI chips, citing Maeil Business Newspaper, which cited industry sources.
Per Maeil, Tesla will put in about 1.1 trillion won toward a dedicated line at the Sejong plant in exchange for guaranteed supply from 2029 through 2033, for chips used in its self driving cars and Optimus robots. Nvidia will put in about 2.6 trillion won for expansions at Sejong and Busan. Maeil said Nvidia presented the partnership at GTC in Germany on October 21 without naming an amount, and that the paper confirmed the figure through its own reporting.
Maeil also reported that mass production is planned for the second half of 2028, and that the company's chief executive said in March that server substrate demand is at least 50% above capacity. No first hand Tesla, Nvidia or Samsung Electro Mechanics post confirming the dollar amounts was found.
What to expect next
Watch for Samsung Electro Mechanics, Tesla or Nvidia to confirm the amounts in a filing or statement. Also watch whether Nvidia's reported advance payments to Ibiden and capacity deal with Unimicron are confirmed, and whether other chip buyers follow with prepaid supply deals. Construction progress at Sejong toward 2028 mass production will show whether the substrate shortage eases. Rival suppliers such as Ibiden and Unimicron may announce their own expansions.