Samsung Electro-Mechanics is developing AI semiconductor substrate production facilities supported by investments of Won1.1tn ($830.2m) from Tesla and Won2.6tn from Nvidia, reported Maeil Business Newspaper.
The company is adding capacity for flip-chip ball grid array (FC-BGA) substrates, components used in AI semiconductors.
Tesla’s planned Won1.1tn investment is included in Samsung Electro-Mechanics’ Won4.27tn capital expenditure programme to expand FC-BGA manufacturing facilities in South Korea.
Under a five-year supply agreement running from 2029 to 2033, Tesla will receive priority access to medium and long-term output.
A dedicated production line in Sejong will make substrates for AI chips used in Tesla’s autonomous electric vehicles and Optimus humanoid robot.
Construction is expected to conclude by the end of 2027.
Equipment installation and test production are scheduled for the first half of 2028, followed by commercial output in the second half of that year.
Tesla deliveries are due to begin in 2029.
Nvidia is also expected to invest about Won2.6tn in capacity expansion at Samsung Electro-Mechanics’ Sejong and Busan facilities.
Nvidia disclosed the partnership at GTC 2026 in Germany on the 21 October 2026 but did not reveal the investment amount publicly.
The supplier is expected to operate a dedicated Nvidia line producing data-centre network substrates and AI computing chipset substrates.
FC-BGA substrates support densely arranged circuitry and address the higher power consumption and heat generated by AI semiconductors.
Ibiden of Japan and Unimicron of Taiwan are also active in the high-end FC-BGA segment.
Samsung Electro-Mechanics already has a connection with Tesla through Samsung Electronics’ foundry business.
Tesla chief executive Elon Musk said Samsung Electronics’ foundry unit would manufacture Tesla’s next-generation A15 AI semiconductor.
Earlier this month, Samsung Electro-Mechanics announced plans to invest about Won2.51tn in its Vietnam subsidiary to increase FC-BGA semiconductor substrate production.
