When we talk about the beneficiaries of the Nvidia AI wave, the spotlight usually falls on TSMC and its CoWoS advanced packaging capacity. However, there is another critical player in the supply chain that has become indispensable: King Yuan Electronics Corp (KYEC, 京元電子).
A January 7, 2026 report in Business Today described KYEC as a leading supplier for NVIDIA’s AI chip testing. Its account emphasizes the company’s long customer relationship, engineering support, and investment in test equipment.
The relevant advantage is practical: supporting demanding test flows while scaling capacity alongside the customer.
Unique Dominance
The report put KYEC’s share of NVIDIA’s AI chip testing business at about 95%, with particular emphasis on Final Test (FT) and System Level Test (SLT). This is the report’s estimate at that time, not a current audited share or the proportion of KYEC’s own revenue attributable to NVIDIA.
Unlike competitors such as ASE, Sigurd, and Powertech, which split focus between packaging and testing, KYEC made a strategic pivot in 2024. They sold their Suzhou, China factory, exited semiconductor manufacturing in China, and poured all resources into pure-play testing (FT, SLT, CP, and Burn-in). Surprisingly, their revenue is now higher than it was before selling the Suzhou plant.
From Iron Sheet House to Tech Giant
KYEC wasn’t always a titan. The company was founded in a simple iron sheet house (tin shack). In 1991 former UMC executive Lee Kim-kung took over, steered the company out of the mud by pivoting to Logic IC testing. They targeted overseas IDM giants, and successfully won orders from Intel, AMD, MediaTek, and major European and Japanese firms.
The Nvidia Connection: A Revolutionary Partnership
Why can’t the giant ASE capture Nvidia’s orders? The answer lies in a deep-rooted partnership and technical foresight.
1. Betting Early: When Nvidia was still a smaller company focusing on PC GPUs, KYEC bet big on them. They prioritized engineers and production schedules for Nvidia, creating a deep bond of loyalty.
2. Technical Fit: Nvidia’s chips have long featured embedded memory. Competitors like ASE and SPIL were less proficient in memory testing, whereas KYEC had developed dual capabilities in memory and logic testing.
3. Comprehensive Support: As Nvidia’s chips became more complex (requiring extensive Burn-in and SLT), KYEC provided unwavering support, solving complex testing needs for clients like Cisco and OmniVision (CMOS sensors) along the way.
The Secret Weapon: Self-Made Equipment
A major competitive moat for KYEC is its ability to build its own testing equipment.
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Cost Advantage: Their self-made Burn-in Ovens cost less than half of market price. Their testers cost 1/3 to 1/4 of external procurement.
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Performance: The report highlights KYEC’s in-house burn-in equipment and its ability to support demanding AI-chip workloads. That does not establish that no competing supplier has qualified equipment for any high-end AI chip.
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Application: While high-end AI chips still use Advantest machines for some stages, KYEC utilizes its proprietary “E320” testers and ovens for mid-to-low-end logic, mixed-signal, and image sensor testing, drastically improving margins.
Future Outlook: Orders, Strategy, and Expansion
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NVIDIA’s Roadmap: Business Today reported a Morgan Stanley estimate that Rubin’s Final Test time could increase by more than 40%. This is a forecast; the revenue effect also depends on volumes, utilization, and pricing.
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ASIC Boom: The same report attributed to Morgan Stanley an estimate that KYEC held nearly all of Google TPU Final Test business and could see 35–40% revenue growth in 2026. These are analyst estimates reported in January 2026, not confirmed full-year results.
Reference
- 王子承, “IC Testing King KYEC Secures NVIDIA Mega Orders” (English rendering of the Chinese title), Business Today, issue 1516, January 7, 2026. Original article; public excerpt published by Hami on January 12, 2026.
Updated Oct 16, 2026