King Yuan Electronics (KYEC), listed in Taiwan as 2449, said it will sign a customer prepayment agreement with NVIDIA. The chip designer will provide advance payments to support KYEC and its U.S. unit in building local semiconductor testing capacity in the United States, according to ABMedia.
KYEC moves ahead with U.S. expansion plan
KYEC is primarily engaged in semiconductor chip testing. The report said the company ranks second globally by testing revenue and is the world’s largest dedicated testing provider. It also said KYEC holds a leading position in high-end chip testing, especially for AI chips including GPUs, ASICs, CPUs and networking chips.
The company’s board approved its U.S. investment plan in July 2026 and authorized Chairman Hsieh Chi-chun to handle related matters within a ceiling of $1.4 billion. ABMedia said that represented KYEC’s largest overseas investment in recent years.
Under the latest disclosure, KYEC and its wholly owned U.S. subsidiary, AeternZ Semiconductor Testing Corporation, will sign the prepayment agreement with NVIDIA. NVIDIA will provide upfront funds to help build capacity, while KYEC will reserve dedicated testing services for the customer. Fees generated by future testing services will gradually offset the prepaid amount, and the contract will stay in force until the full amount has been offset. The two sides have not disclosed all details of the arrangement.
NVIDIA uses prepayment model to secure U.S. testing capacity
ABMedia said this is the first time NVIDIA has used an advance-payment structure to secure planned capacity while helping a Taiwanese wafer semiconductor testing company set up operations in the United States. As U.S. semiconductor supply chains move toward localization, wafer testing has become an important missing link in the industrial chain, the report said.
According to the report, NVIDIA is using the prepayment model to lock in U.S. testing capacity early. That extends the relationship between the two companies beyond existing orders and into the construction of a new overseas plant. The new capacity is expected to focus on testing demand for artificial intelligence and high-performance computing, or HPC, chips, with direct access to the North American market.
ABMedia said the structure can reduce KYEC’s financial burden as it expands overseas while also giving the company clearer visibility on how future capacity will be absorbed.
Key points from the agreement
- In deal structure terms, NVIDIA is using a prepayment model to support a Taiwanese packaging and testing company’s U.S. buildout, creating a model in which a customer directly funds and reserves future capacity.
- In investment terms, KYEC’s planned investment cap is $1.4 billion. Chairman Hsieh Chi-chun has been authorized to execute the plan, and both the Taiwan parent company and the wholly owned U.S. subsidiary AeternZ will take part in the capacity buildout.
- In financial and operating terms, the prepayment will be offset through future testing service fees, giving KYEC funding support from NVIDIA.