Tesla and Nvidia $2.8bn Substrate Deal Reported

Tesla and Nvidia will together invest 3.7 trillion won ($2.8bn) to help Samsung Electro-Mechanics build production lines for the substrates that AI chips sit on, South Korea’s Maeil Business Newspaper reported on Thursday, citing industry sources. Reuters picked up the report later the same morning.

TSN follows SpaceX, xAI and Tesla news on its Musk companies hub.

According to Maeil, Tesla will put in about 1.1 trillion won (roughly $830m) and Nvidia about 2.6 trillion won (roughly $1.97bn), both at Reuters’ exchange rate. Neither Tesla nor Samsung Electro-Mechanics has confirmed a Tesla deal, and Nvidia’s figure is Maeil’s own reporting rather than a company disclosure.

Tesla’s reported five-year contract

The substrates in question are flip-chip ball grid array (FC-BGA) packages, which connect high-performance chips such as AI accelerators to the boards they are mounted on. Maeil says high-end FC-BGA is made by only a handful of companies, including Samsung Electro-Mechanics, Japan’s Ibiden and Taiwan’s Unimicron, and that the industry sees Ibiden as holding more than 70% of the market. The paper says the substrates are becoming a new bottleneck in the AI chip supply chain, which it gives as the reason for the two investments.

Maeil reports that Samsung Electro-Mechanics has signed a long-term FC-BGA supply contract with Tesla and is adding a dedicated line at its plant in Sejong.

Under the arrangement Maeil describes, Tesla’s money covers part of the cost of the new facilities and equipment, and in return Tesla is guaranteed supply over the medium to long term. The substrates would go into AI chips for Tesla’s self-driving cars and its Optimus humanoid robot, the paper says, and the contract would run for five years, from 2029 to 2033.

Maeil’s timetable has construction finishing by the end of next year and equipment installation and test runs by the first half of 2028. Mass production would start in the second half of 2028, with supplies to Tesla from 2029.

That fits what Samsung Electro-Mechanics itself said in September, when it announced a 4.27 trillion won investment to expand FC-BGA production in Sejong, running from September 2026 to May 2028, with mass production from September 2028. The company said then that the investment includes “customer funding support and mid- to long-term volume guarantees”, but did not name any customer. Maeil says Tesla is covering 1.1 trillion won of that total.

Nvidia’s deal was announced; its price was not

The Nvidia side is partly on the record. Samsung Electro-Mechanics and Nvidia announced a strategic partnership on 21 October; Maeil says Nvidia presented the partnership at its GTC 2026 conference in Germany that day. The two companies said they would jointly invest in dedicated substrate lines at Samsung Electro-Mechanics’ Sejong and Busan sites, with supplies of substrates for Nvidia’s compute chips and networking switches starting in 2026.

That release gave no investment amount. Maeil says Nvidia did not disclose a figure in its presentation either, and that the paper’s own reporting puts it at about 2.6 trillion won.

The companies did give a sense of scale. Volumes supplied to Nvidia are expected to grow at a double-digit annual rate from 2026, and by 2028 Nvidia’s allocation is projected to be “a significant portion” of Samsung Electro-Mechanics’ total annual package-substrate capacity. “The pace of the AI infrastructure buildout requires us to expand manufacturing capacity on a global scale,” said Debora Shoquist, Nvidia’s executive vice president of operations.

Samsung Electro-Mechanics was one of six suppliers in Nvidia’s wider capacity plan announced the same day, which TSN covered. In that plan, Nvidia said its substrate agreements with Samsung Electro-Mechanics, Ibiden and Unimicron would together increase substrate capacity 2.5 times over three years.

If the Tesla contract is confirmed, it would put a carmaker alongside Nvidia as a funding customer for a component Maeil describes as a bottleneck. For now, the only party putting numbers on either investment is Maeil.