Nvidia Turns to Samsung to Shake Up the AI Substrate Market. Unimicron and Kinsus Face a New Threat

Hello everyone,

Allow me to indulge in a little self-promotion. In last week’s newsletter, I exclusively revealed an unusual phenomenon: Nvidia was providing substantial financial backing to Unimicron（欣興）, IBIDEN, King Yuan Electronics（京元電）, and Anker to support their capacity expansions.

Less than a week later, Nvidia issued a press release at its GTC conference in Berlin that effectively confirmed my reporting, announcing that it was partnering with these suppliers to accelerate the buildout of AI infrastructure.

At the time, I asked in my newsletter, “What is Jensen Huang（黃仁勳） so nervous about?”

The answer was right there in the press release.

“We are in the midst of the largest infrastructure buildout in history. Demand is extraordinary, but capacity is the constraint,” Huang said.

IC substrates, in particular.

More precisely, ABF substrates used in TSMC’s CoWoS packaging—the third layer, the “S” (substrate), in CoWoS’s sandwich-like structure.

That is why Nvidia’s press release opened by announcing agreements with three substrate manufacturers to expand their combined capacity to 2.5 times its current level over the next three years.

This marked the first time the world’s most valuable company had publicly committed to securing substrate capacity, a development of considerable significance.

In fact, just two days earlier, Kinsus（景碩） CEO and President Ho-hsu Chen（陳河旭）, whose company supplies substrates to Nvidia, made a striking prediction in an exclusive interview with me.

“The final bottleneck in the entire AI supply chain will definitely be substrates,” he said. “Substrates will inevitably be in short supply at the end.”

Why is he so certain?

Read on in this week’s newsletter.