Samsung's AI Chip Substrate Procurement Hits Snag as Supplier Demands Trillion-Won Purchase Guarantee
Miles Bennett
Samsung's System LSI division has approached multiple FC-BGA substrate makers but hit steep conditions — Ibiden demands a ₩1 trillion-plus purchase guarantee, Samsung Electro-Mechanics wants ₩100 billion upfront — turning substrate capacity into a critical bottleneck in the AI chip race.
Samsung wants substrates — why won't suppliers just sell?
Ibiden — Japan's largest packaging-substrate maker — set a condition: Samsung must commit to over ₩1 trillion in purchase volume before supply is allocated.
Samsung Electro-Mechanics (Samsung Group's own substrate subsidiary) demanded at least ₩100 billion in advance payment, or that Samsung's end-customer place the order directly.
LG Innotek and Daeduck Electronics reportedly did not respond positively to Samsung's requests.
This means → suppliers are collectively raising the bar, not refusing to sell but insisting Samsung put real money on the table first before capacity is reserved.
Why have substrates suddenly become so scarce?
FC-BGA packaging substrates — the critical middle layer that carries the chip and connects it to the circuit board — are growing larger alongside AI chips, and manufacturing difficulty is rising sharply.
In plain terms = bigger substrates mean fewer units per production panel, harder thermal warpage control (the board bending under heat), and lower line throughput.
Only a handful of companies worldwide can reliably mass-produce large-format FC-BGA substrates: Ibiden, Samsung Electro-Mechanics, LG Innotek, and Daeduck Electronics.
Flatness control beyond 20 layers remains a major barrier for newcomers — this reflects a highly concentrated supply side where sellers hold pricing power.
What gives Ibiden so much leverage?
Ibiden's electronics division accounts for roughly 60% of consolidated revenue; about half is tied to Nvidia, roughly a quarter to Intel, and most of the rest to AMD.
This means → Ibiden's capacity is already deeply locked in by top-tier customers, leaving limited room for Samsung.
Ibiden previously expanded for Intel demand, only to see some of that capacity sit idle when orders weakened — an experience that made the company far more cautious about new investment, tying additional capex to tight alignment with customer production plans.
Can Ibiden's expansion plan ease the squeeze?
Ibiden plans to invest roughly ¥500 billion across fiscal years 2026–2028 to expand high-end substrate capacity for AI and high-performance servers, focusing on its Gama and Ono plants.
New capacity is expected to come online from FY2027 onward; further expansion at Ono is also under evaluation.
The disclosure named no specific customers and did not say whether prepayment or minimum-purchase commitments are included.
In plain terms = capacity is growing, but how much Samsung gets — and on what terms — remains entirely unanswered in public.
What does the substrate gap mean for Samsung?
Samsung's System LSI and foundry divisions are competing for custom AI SoC orders from major global tech firms, but internal concerns have surfaced: without substrate capacity locked in advance, winning the chip-design and foundry contract still cannot guarantee mass-production delivery.
In plain terms = finishing the chip but having no substrate to package it is like building a house with no doors or windows — the finished product can't ship.
As of this report, no confirmed order losses or production disruptions have been cited, and none of the parties have publicly confirmed the negotiation terms described.
This reflects large-format FC-BGA capacity shifting from a backstage detail to an increasingly decisive variable in AI chip competition.
Content is for reference only, not financial advice.