Tesla and Nvidia Reportedly Invest $2.8B in Samsung Electro-Mechanics
Maeil Business Newspaper reports Nvidia would invest about 2.6 trillion won and Tesla 1.1 trillion won in AI chip substrate lines in South Korea. Samsung Electro-Mechanics and Nvidia announced a multiyear supply partnership on Oct. 21.
Tesla (TSLA) and NVIDIA (NVDA) plan to invest a combined 3.7 trillion won, about $2.8 billion, in Samsung Electro-Mechanics (009150.KS) to expand production of advanced AI chip substrates in South Korea, according to Maeil Business Newspaper, as relayed by Reuters. The report, which cites industry sources, puts NVIDIA's share at about 2.6 trillion won ($1.97 billion) and Tesla's at about 1.1 trillion won ($830 million). On Oct. 21, Samsung Electro-Mechanics announced a multiyear strategic partnership with NVIDIA to supply package substrates, with dedicated lines at its Sejong and Busan plants.
Announced versus reported
| Item | Detail | Source |
|---|---|---|
| NVIDIA partnership | Multiyear supply of FC-BGA package substrates, starting in 2026, for AI computing chipsets and data center network switches | Samsung Electro-Mechanics announcement, Oct. 21 |
| Production sites | Dedicated NVIDIA lines at the Sejong and Busan plants | Samsung Electro-Mechanics announcement |
| Volume outlook | Shipments to NVIDIA expected to rise at least a double-digit percentage a year on average from this year, and to be a significant share of capacity by 2028 | Samsung Electro-Mechanics announcement |
| NVIDIA investment | About ₩2.6 trillion ($1.97 billion) | Maeil, via Reuters |
| Tesla investment | About ₩1.1 trillion ($830 million) | Maeil, via Reuters |
| Tesla supply deal | Five-year agreement, 2029–2033, for substrates used in autonomous vehicles and Optimus humanoid robots | Maeil reporting |
Dollar figures use Reuters' rate of 1,322.44 won to the dollar. By our calculation, NVIDIA would account for about 70% of the combined total and Tesla about 30%.
Reported timeline
| Stage | Timing |
|---|---|
| Construction complete | By late 2027 |
| Equipment installation and test production | First half of 2028 |
| Mass production | Second half of 2028 |
| Tesla deliveries begin | 2029, under the 2029–2033 agreement |
The Tesla line would be a dedicated production line in Sejong. Reports say Tesla's investment falls within Samsung Electro-Mechanics' 4.27 trillion won Sejong expansion program, which the company has said runs through May 2028, with mass production planned from September 2028.
Why substrates matter
FC-BGA, or flip-chip ball grid array, substrates are the layer that connects a high-performance chip to the circuit board, carrying power and signals. AI processors and network switches need larger, denser substrates than ordinary chips, and the added power draw and heat make them harder to build. Samsung Electro-Mechanics' CEO said in March that demand for server and data center FC-BGAs was more than 50% above production capacity. Japan's Ibiden and Taiwan's Unimicron are also active in high-end FC-BGA.
On Sept. 29, Samsung Electro-Mechanics announced an expansion of about 6.78 trillion won across its Sejong site and a Vietnam subsidiary, saying global customers are funding part of the spending and committing to medium- to long-term purchase volumes. Under the NVIDIA announcement, NVIDIA will secure advanced substrates in advance, which the companies said should ease AI infrastructure supply bottlenecks. Samsung Electro-Mechanics President Chang Duck-hyun called it meaningful "to join as a key infrastructure partner of Nvidia," and NVIDIA's Deborah Shoquist, executive vice president of operations, said production capacity "needs to be expanded on a global scale" to keep pace with AI infrastructure deployment.
Sources: Samsung Electro-Mechanics Sept. 29 investment announcement; Reuters, citing Maeil Business Newspaper; Korean trade coverage of the Oct. 21 NVIDIA announcement. This is informational, not a recommendation to buy or sell.
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