Samsung Electro-Mechanics (SEMCO) and Nvidia have entered a strategic partnership to boost the production of ABF package substrates. These components are essential for high-performance AI processors and networking switches, which currently face significant supply chain constraints.
The companies will jointly invest in dedicated manufacturing lines at SEMCO facilities in Sejong and Busan, South Korea. Production is set to commence in 2026, with supply volumes expected to increase at a double-digit annual rate over the coming years.
SEMCO has previously supplied substrates for Nvidia’s NVSwitch interconnects. Additionally, the companies are discussing a potential first-vendor role for SEMCO regarding substrates for the Groq3 LPU inference chip, though this arrangement remains unfinalized.
Nvidia is simultaneously working with other suppliers, including Ibiden and Unimicron, to address supply bottlenecks. The company plans to invest billions of dollars to increase total substrate capacity by at least 2.5 times in the near future.
