Nvidia sees semiconductor testing capacity doubling by 2027

Nvidia expects its semiconductor testing capacity to double between 2026 and 2027. That is a big claim about a part of the chip business most people never think about. Why testing became the bottleneck Semiconductor testing is the stage after a chip is fabricated and packaged, where specialized equipment runs it through checks to confirm it performs as designed. This back-end stage, along with advanced packaging, has become a choke point as demand for AI hardware surges. Nvidia’s response has been to pay for capacity before it exists. On October 13, 2026, the company signed a prepayment agreement with King Yuan Electronics (KYEC) to reserve future testing capacity. The deal ties into a KYEC investment plan that could reach up to $1.4 billion. In plain terms, Nvidia is handing over money now so that a supplier’s new testing lines are spoken for when they come online. KYEC has been expanding hard to meet AI demand. The company lifted its 2024 capital expenditure to a record $1.45 billion, up from a prior estimate of $1.14 billion. A pattern, not a one-off In July 2026, the company struck a separate $1.5 billion prepayment deal with Amkor Technology to secure advanced packaging and te...