NVIDIA and hyperscaler AI infrastructure investment outpaces supply of micro solder balls

[Financial News] Recent investment in artificial intelligence (AI) infrastructure is expanding faster than the market expected, and supply of micro solder balls (MSB), a key bonding material used in AI semiconductor packaging, is also tightening. The market says demand for FC-BGA (Flip-Chip Ball Grid Array) substrates for AI accelerators is surging, but supply of ultra-fine solder balls is failing to keep up.
■NVIDIA's second-quarter revenue tops $96.2 billion, reaffirming stronger AI investmentOn Aug. 26 local time, NVIDIA announced that revenue for the second quarter of fiscal 2027, covering May to July 2026, rose 106% from a year earlier to $96.22 billion. The figure beat market expectations by more than $4 billion and marked a record for the 13th straight quarter.
The data center segment, which includes AI chip sales, jumped 117% to $89 billion and accounted for 92% of total revenue. Sales to hyperscalers more than doubled from $24.2 billion a year earlier to $48.7 billion, while sales to cloud and enterprise customers excluding hyperscalers also rose about 2.4 times, from $16.9 billion to $40.3 billion. The data suggests that AI investment demand is spreading beyond a few big tech firms to the broader corporate sector.
CEO Jensen Huang said AI has reached an inflection point and stressed that the next-generation platform Vera Rubin, now in mass production, was developed to meet that demand.
Chief Financial Officer Colette Kress also said during the conference call that revenue in fiscal 2028 is expected to grow by about 70%. On the same day, NVIDIA announced that it will supply an additional 2 million GPUs to AWS's global infrastructure in 2027 and 2028.
■Essential material for AI accelerator packaging, with demand tied to rising contact countsThe expansion of AI infrastructure investment is quickly spilling over into upstream materials markets. Industry sources say demand for micro solder balls is rising sharply as AI server investment and the recovery in the FC-BGA market move in tandem.
Micro solder balls are ultra-fine bonding materials with diameters of about 30 to 150 micrometers. They electrically and mechanically connect semiconductor substrates and mainboards beneath flip-chip packages. They are typically distinguished from standard solder balls, which are usually 151 to 760 micrometers in size, and are mainly used in FC-BGA substrates for CPUs, GPUs and AI accelerators.
In particular, demand is not determined solely by substrate output. As semiconductors become higher-capacity and more highly integrated, packaging becomes more miniaturized, which increases the number of contacts per package. That means higher-performance AI accelerators translate directly into greater use of micro solder balls.■ Demand exceeds supply...memory and AI substrates form two growth enginesSupply and demand are also tight. In a recent report, IBK Securities said that supply of both solder balls and micro solder balls is falling short of demand as memory and high-performance substrate demand rise at the same time. The continued shortage of FC-BGA supply for servers is also driving more long-term supply agreements between substrate makers, GPU, ASIC and server companies.
Applications differ clearly by product line. Micro solder balls are supplied to FC-BGA substrate makers at home and abroad, as well as hard disk drive makers. Standard solder balls are used in DRAM and NAND packaging processes at domestic memory chip makers such as Samsung Electronics and SK hynix, as well as at OSAT companies. In other words, the memory cycle and AI substrate demand are acting as separate growth engines. As Samsung Electronics and SK hynix increase production of server DRAM and HBM to meet AI demand, demand for standard solder balls rises. As volumes increase for accelerator makers including NVIDIA, demand for micro solder balls grows as well.
On the supply side, the micro solder ball market remains an oligopoly dominated by a small number of companies. In South Korea, B is the only company mass-producing micro solder balls, and globally it shares the market with Japan's C. B's global market share in micro solder balls is estimated at 60% to 70%, while its share in standard solder balls is around 25% to 30%. IBK Securities said the long verification period required across substrate makers, packaging firms and end users makes it difficult for new entrants to break into the market.
[email protected] Kim Kyung-a Reporter