Tesla, Nvidia Invest in Samsung Electro-Mechanics

Headquarters of Samsung Electro-Mechanics. (Photo courtesy of Samsung Electro-Mechanics) Samsung Electro-Mechanics will receive an investment of about 3 trillion won (about $2.27 billion) from Tesla and Nvidia to expand its production facilities for flip-chip ball grid array (FC-BGA), a next-generation package substrate for artificial intelligence (AI) semiconductors. With the demand for substrates increasing due to the advancement of high-performance AI semiconductors, the company is speeding up its market penetration by securing global big tech companies as long-term clients. According to the industry on Oct. 22, Samsung Electro-Mechanics signed a long-term FC-BGA supply contract with Tesla and is building a dedicated production line at its Sejong plant. The investment scale of Tesla and Nvidia is known to be about 1 trillion won and 2 trillion won, respectively. Samsung Electro-Mechanics disclosed in September that it would invest a total of 4.27 trillion won to expand its Sejong plant. The company plans to build a dedicated line for Tesla at this plant to produce substrates for AI semiconductors used in autonomous electric vehicles and the humanoid robot ‘Optimus’. The supply contract period is five years from 2029 to 2033. Samsung Electro-Mechanics plans to start mass production in the second half of 2028 and supply products to Tesla starting in 2029. Nvidia also introduced its cooperation with Samsung Electro-Mechanics at ‘GTC 2026’ held in Germany on Oct. 21 (local time) and announced plans to expand production facilities at the Sejong and Busan plants. The dedicated line for Nvidia will produce AI computing chipsets and network substrates for data centers. As the markets for autonomous vehicles, humanoid robots, and AI data centers expand, the demand for high-performance FC-BGA is also expected to increase. By securing Tesla and Nvidia as clients, Samsung Electro-Mechanics has been able to expand its production capacity and strengthen its competitiveness in the high-end substrate market. Tesla Chief Executive Officer (CEO) Elon Musk also previously stated that the next-generation AI semiconductor ‘A15’ designed by Tesla will be produced by the Samsung Electronics foundry division. The possibility of applying Samsung Electro-Mechanics’ FC-BGA to this semiconductor is also being discussed. A Samsung Electro-Mechanics official stated, “It is difficult to confirm parts related to clients.”