Nvidia is expanding capacity for substrates, advanced packaging, testing and optical components as demand for AI infrastructure outstrips manufacturing supply.
Nvidia has moved to secure more capacity across its chip supply chain as demand for artificial intelligence infrastructure continues to outpace available production, according to a company statement released on Tuesday. The group said it is working with Amkor Technology, Ibiden, King Yuan Electronics, Samsung Electro-Mechanics, Siliconware Precision Industries and Unimicron Technology to expand output of substrates, advanced packaging, testing services and optical components used in its AI systems.
Jensen Huang, Nvidia’s chief executive, said the industry was in the middle of “the largest infrastructure build in human history”, adding that demand was strong while manufacturing capacity remained the main constraint. The company said the agreements are intended to improve both supply and resilience across its global production network, as AI factories and accelerated computing systems require a wider set of specialist components than conventional server hardware.
The most substantial commitments concern semiconductor substrates, the boards that connect chips to the main package and help carry signals through the system. Nvidia said it will expand substrate capacity with Ibiden, Samsung Electro-Mechanics and Unimicron by 2.5 times over the next three years. Reuters reported that Ibiden’s Ono plant in Japan will be scaled up to roughly three times current output, with extra capacity expected to begin coming online in the first quarter of 2028. Samsung Electro-Mechanics will supply next-generation substrates from its South Korean facilities, while Unimicron’s expansion in Taiwan is due to start adding capacity in the second quarter of 2027.
Advanced packaging is another major focus. Nvidia said Amkor will raise its packaging capacity by more than 300% by the end of 2028, with work centred on its South Korean manufacturing base and on interposer wafer production, which links chips to substrates inside advanced packages. The company also said it is supporting the expansion of Amkor’s facilities in Korea to handle higher volumes for current and next-generation AI platforms.
Testing and optical-engine production are also being scaled up. Nvidia said it has provided King Yuan Electronics with a $1.1 billion capacity reservation advance to support new testing facilities in the United States, with high-volume production targeted for April 2027. The company added that total testing capacity across the US, Taiwan and Singapore should double next year. Separately, SPIL is to expand optical-engine manufacturing for co-packaged optics in Taiwan by 15 times by mid-2027, before a further doubling by the end of 2028. The move reflects how Nvidia is broadening its supply chain beyond chips alone, as the bottleneck in AI hardware increasingly shifts to packaging, assembly and photonics rather than only to wafer supply.
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