Gyeongbuk Province's Highest Ever MOU, Strong Start Toward 100 Trillion Won Investment Attraction in the 8th Elected Term

LG Innotek, Acquiring LG Electronics Gumi A3 Plant, to Invest 1.4 Trillion KRW by 2023

Gyeongbuk Provincial Government Office.

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Gwi-yeol] Gyeongbuk Province, which declared the achievement of 100 trillion KRW in investment attraction during the 8th local government term, has officially started toward its ambitious goal by signing the highest-ever investment memorandum of understanding (MOU) for a single investment project.

On the 6th, at the investment agreement ceremony held at Gumi City Hall, Gyeongbuk Province and Gumi City signed an MOU worth 1.4 trillion KRW. Attendees included Governor Lee Cheol-woo, Mayor Kim Jang-ho of Gumi, President Jung Cheol-dong of LG Innotek, National Assembly members Koo Ja-geun and Kim Young-sik, and Lee Hee-beom, co-chairman of the Special Investment Attraction Committee of the province.

‘LG Innotek’ plans to produce camera modules and flip chip (FC)-ball grid array (BGA) at the Gumi A3 factory site, measuring 125,557㎡ (38,000 pyeong), recently acquired from LG Electronics. This megaton-scale project is expected to create 1,000 direct and indirect jobs, preparing the company for both its present and future.

The ‘camera module’ business symbolizes LG Innotek’s current core, maintaining a global market share of over 20% since 2011, ranking first worldwide. The outlook is optimistic.

Beyond the current mainstay of smartphones, demand for automotive camera modules is rapidly increasing with the commercialization of autonomous vehicles, and application areas are expected to expand to extended reality (XR) platforms encompassing virtual reality (VR) and augmented reality (AR).

Market research firm Yole Development forecasts the total camera module market to reach 60 billion USD (75 trillion KRW) by 2025.

Flip chip (FC)-ball grid array (BGA) is a key technology differentiating semiconductor performance and is driving growth in the semiconductor substrate market, representing LG Innotek’s future potential.

FC-BGA has high technological entry barriers due to requirements for stability and fast transmission speeds, and currently only about ten companies worldwide can produce it.

LG Innotek, leading the global market in communication semiconductor substrates, is leveraging its world-class semiconductor substrate business capabilities to dominate the FC-BGA market, which has similar manufacturing processes, and is pursuing this investment with such ambitions.

The market outlook is also bright. Last year, the semiconductor package substrate market reached 12.2 billion USD (14.5 trillion KRW), growing 19% year-on-year, with FC-BGA accounting for about 47% of this.

The industry expects FC-BGA demand to grow at an average annual rate of 11% until 2025.

Having achieved the first fruit of the 100 trillion KRW investment attraction goal in the 8th local government term, Gyeongbuk Province swiftly responded to the 1,100 trillion KRW investment plans announced by Korea’s top 10 conglomerates including Samsung, SK, and LG by launching a Special Investment Attraction Committee last month, composed of 34 corporate experts, determined to open a groundbreaking era for local regions.

Gyeongbuk Province considers attracting large corporations as the most important factor in achieving its investment attraction goals. The plan is to strategically highlight Gyeongbuk’s strengths in new industries such as semiconductors and secondary batteries, where large corporations are actively entering, and to build a value chain that includes anchor companies and their partner small and medium-sized vendors, thereby establishing a solid foundation for the regional economy linking large, medium, and small enterprises.

To enable companies to swiftly proceed with large-scale investments, Gyeongbuk Province also plans to provide industrial complex sites at the original land parcel level.

This will minimize time and costs, allowing companies to develop the sites according to their preferences, and if a company’s investment intention is clear, customized sales including priority construction of the relevant site are also being considered.

Governor Lee Cheol-woo stated, “We will prepare a bright future for Gyeongbuk together with LG Innotek, Korea’s first comprehensive parts company with over 40 years of close ties to Gumi.” He added, “We will actively promote investment sales by leveraging the nation’s top-level investment incentives and the Daegu-Gyeongbuk Integrated New Airport, scheduled for completion in 2028, as Gyeongbuk’s strengths, and do our best to ensure that the 100 trillion KRW investment attraction goal of the 8th local government term is not just a slogan.”