Nvidia plans to double its semiconductor testing capacity between 2026 and 2027 to address bottlenecks in AI hardware production. The company is securing future output by prepaying suppliers for testing and packaging services.
On October 13, 2026, Nvidia signed a prepayment agreement with King Yuan Electronics (KYEC). This deal supports a KYEC investment plan that could reach $1.4 billion. Previously, in July 2026, Nvidia finalized a separate $1.5 billion prepayment deal with Amkor Technology.
KYEC increased its 2024 capital expenditure to a record $1.45 billion, up from an initial estimate of $1.14 billion. Meanwhile, equipment manufacturer Advantest aims to increase its production of system-on-chip testers from 3,000 units in mid-2025 to 5,000 units annually by March 2027.
Nvidia projects 70% revenue growth for fiscal 2028, though the company notes that memory supply and testing processes remain potential constraints. These prepayment strategies are intended to mitigate risks of supply shortages expected to persist through 2028.
