Unimicron paid a record NT$10.08B for a plant: Nvidia is qualifying Kinsus anyway
A record plant purchase gave Unimicron the factory Kinsus wanted: now Nvidia is grooming its rival anyway.
Vincent Jiang · 2 min read
The fight for Nvidia's+2.61% — Nvidia's, up 2.61 percent today AI substrate money was decided, in part, at a factory auction in Hsinchu. In early October, Unimicron−1.36% — Unimicron, down 1.36 percent today, Taiwan's second-largest substrate maker, paid NT$10.08 billion for Bridgestone's former Hukou plant, a record for northern Taiwan industrial-park factory sales 1. Kinsus, Taiwan's third-largest, bid second and lost 1.
The money Nvidia is handing out
On October 21 at GTC Berlin, Nvidia signed substrate capacity agreements with three suppliers, Japan's Ibiden−3.10% — Ibiden, down 3.10 percent today, South Korea's Samsung Electro-Mechanics−0.36% — Samsung Electro-Mechanics, down 0.36 percent today and Taiwan's Unimicron, that together lift Nvidia's substrate capacity 2.5 times over three years 2. Ibiden gets a multibillion-dollar reservation advance for its Ono plant; Unimicron's KF expansion only starts adding capacity in the second quarter of 2027 and reaches full ramp by mid-2028 2. The shortage is real: Samsung Electro-Mechanics' chief executive Jang Deok-hyun said in March that AI-server FC-BGA demand runs at least 50% above production capacity 3.
The complication: a funded rival at home
On October 26 a Taiwanese industry report said Nvidia is now grooming Kinsus, a potential third Taiwanese substrate supplier after Ibiden and Unimicron, after TSMC+2.23% — TSMC, up 2.23 percent today, the chipmaker Nvidia buys its processors from, turned to Kinsus to develop new packaging technologies and materials 1. Kinsus shares are up 5.5-fold this year, and its capacity expansion is approaching Unimicron's pace 1. The report links that courtship to Unimicron's January boardroom change, when parent UMC+2.17% — UMC, up 2.17 percent today replaced founder-chairman T.J. Tseng with former UMC co-president Shan-chieh Chien 1.
The buyer's leverage is plain: when demand exceeds supply by half, a buyer with cash does not need one supplier. Nvidia and Tesla+6.53% — Tesla, up 6.53 percent today are funding Samsung Electro-Mechanics, KRW 2.6 trillion from Nvidia and KRW 1.1 trillion from Tesla for a dedicated Sejong line with supply from 2029 to 2033 3.
One supplier holds an estimated 70 to 80 percent of top-spec AI substrate
- Estimate
Data
| Value | |
|---|---|
| Ibiden (low est.) (estimate) | 70% |
| Ibiden (high est.) (estimate) | 80% |
| Samsung Electro-Mechanics (est.) (estimate) | 10% |
What Unimicron's price assumes
Unimicron trades at 70.9 times trailing earnings with levered free cash flow of just TWD 662 million against TWD 23.89 billion of trailing net income; the buildout, like the Hukou plant, is paid for up front and rewarded late 4. Chairman Chien himself framed the tension at the TPCA Show: hyperscaler capex is running six to 6.8 times 2024 levels while substrate capacity only doubled, and some tools now take 30 months to deliver, because, as one peer put it, almost everyone got burned by Apple−1.11% — Apple, down 1.11 percent today in the last cycle 15.
Unimicron reports on October 27 and UMC on October 28 4. The number to watch is not the boom; it is whether the scarcity premium survives a funded rival in its own backyard.
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More about NVIDIA
NVDA · Fiscal Q2 2027Revenue rose 106% to $96.2B, 92.5% of it from Data Center, “driven by the ramp of our Blackwell Ultra infrastructure”. Gains on equity stakes of $7.8B lifted net income to $59.7B.
Show as a table
| Line | Value |
|---|---|
| Revenue | $96.2B |
| Gross margin | 75.0% |
| Operating margin | 66.2% |
| Net income | $59.7B |
| Hyperscale | $48.7B |
| AI clouds & enterprise | $40.3B |
| Data Center | $89.0B |
| Edge Computing | $7.2B |
| Gross profit | $72.1B |
| Cost of revenue | $24.1B |
| Other income | $7.8B |
| Operating income | $63.7B |
| Operating expenses | $8.4B |
| Tax | $11.8B |
| R&D | $7.1B |
| SG&A | $1.4B |
