Samsung Electro-Mechanics Breaks Into World's Top GPU Maker's Supply Chain

Samsung Electro-Mechanics (009150.KS) will supply high-value flip-chip ball grid array (FC-BGA) substrates to Company N, the world's leading graphics processing unit (GPU) maker, for the first time, marking a significant breakthrough into a supply chain previously dominated by Japanese component manufacturers.

The company will begin mass production of FC-BGA substrates for NV Switch at its Busan plant in the second half of this year, according to semiconductor industry sources on Wednesday. This marks Samsung Electro-Mechanics' first FC-BGA supply deal with Company N, making it the second supplier of FC-BGA for NV Switch.

NV Switch is core hardware in AI platforms that enables multiple GPUs to operate organically as a single massive GPU. Company N's GPUs are designed to train and run large AI models by utilizing numerous GPUs as clusters, with NV Switch serving as a high-speed communication highway between GPUs. A single latest-generation Company N rack system contains 18 NV Switch units, underscoring their significance.

The partnership with Company N, a leader in the global AI semiconductor market, is expected to serve as a major turning point for Samsung Electro-Mechanics' substrate business amid the ongoing AI data center construction boom.

The deal is particularly noteworthy as Japanese firms such as Shinko Electric Industries and Ibiden have monopolized the supply of advanced substrates for Company N's cutting-edge GPUs, including Hopper and Blackwell.

"The high-performance AI chip substrate market for Company N has been effectively oligopolized by Japanese companies like Ibiden due to high technological barriers to entry," an industry official said. "This switch substrate supply deal proves that Samsung Electro-Mechanics' fine circuit implementation technology and yield stability have reached global top-tier levels, carrying significance far beyond a simple contract win."