KYEC signs NVIDIA prepayment deal to build dedicated US chip testing capacity
Taiwanese semiconductor testing firm King Yuan Electronics (KYEC) said its board approved a customer prepayment agreement with NVIDIA International, Inc., under which NVIDIA will advance funds for KYEC and its wholly owned US subsidiary AeternZ Semiconductor Testing Corporation to build testing capacity in the United States, reserving dedicated capacity and testing services for NVIDIA, with the prepayment offset against future service payments until fully deducted. KYEC said the deal deepens its long-term cooperation with NVIDIA and expands US testing capacity, and that the revised contract structure means the parent company no longer needs to provide a US$300 million endorsement guarantee, which it has cancelled. The report notes KYEC's board approved a US plant investment in July 2026 with a cap of US$1.4 billion, and that its 2026 capital expenditure was raised from NT$39.372 billion to NT$50 billion, with AI orders spanning NVIDIA's Blackwell and Rubin series plus ASIC and CPU testing; NVIDIA did not disclose the prepayment amount or full contract details, after signing a US$1.5 billion multi-year deal with Amkor in July 2026.
It shows the AI chip supply chain's bottleneck extending into advanced testing, with a major customer locking up capacity via prepayment while reducing the testing firm's risk in building US capacity.