Samsung struggles securing AI chip substrates

Samsung Electronics is encountering supply constraints in a critical stage of AI chip manufacturing: securing the specialized package substrates needed to house custom AI accelerators. Large-format FC-BGA substrates—the circuit boards that hold and connect the silicon die—have become a bottleneck as demand for custom AI chips outpaces available substrate production capacity. Rather than allocate capacity on demand, substrate suppliers are now imposing preconditions for supply: they are asking for purchase guarantees, advance payments from Samsung, or insisting that Samsung's end customers (the AI system builders) procure the substrates directly from suppliers. This strategy allows suppliers to ensure committed demand before committing production resources. For Samsung, these conditions complicate the supply chain and may require renegotiating customer agreements or committing capital upfront to secure sufficient substrate allocation to meet AI chip delivery schedules.

Samsung's difficulty in securing large-format FC-BGA substrates reflects the broader supply-chain pressures in the custom AI chip market. Substrate suppliers, facing high demand and uncertain order commitments, are protecting their capacity by requiring stronger commitments from buyers—either financial guarantees upfront, long-term purchase contracts, or direct relationships with end customers. This practice effectively shifts inventory and financial risk away from suppliers and toward chip makers like Samsung, which may lack the leverage to negotiate less restrictive terms if demand is not guaranteed.