Samsung and LG Accelerate AI Semiconductor Substrate Business: "Mass Production of Products in the Second Half of the Year"

Samsung Electro-Mechanics Begins Mass Production of Vietnam FC-BGA Substrates in Q1
President Jang Deok-hyun: "Plan to Mass Produce AI Products in Second Half"
LG Innotek Starts Production at Gumi Plant from February

Samsung Electro-Mechanics and LG Innotek are accelerating their AI semiconductor substrate businesses. Samsung Electro-Mechanics recently started operating its Vietnam flip chip-ball grid array (FC-BGA) factory. Industry attention is focused on whether the two companies will gain leadership in the semiconductor substrate market, which is currently dominated by Taiwan and Japan.

Jang Deok-hyun, President of Samsung Electro-Mechanics, is making a presentation at the regular shareholders' meeting held on March 20 at EL Tower in Seocho-gu, Seoul.
[Photo by Yonhap News]

According to the industry on the 26th, Samsung Electro-Mechanics' Vietnam production plant recently began mass production of FC-BGA products. This is the result of investing more than 1 trillion won in the Vietnam plant since 2021. The products are expected to be used in IT devices such as laptops, tablets, and smartphones equipped with AI. The production portfolio is expected to expand to substrates for servers, networks, and automotive electronics in the future. Since mass production has started, there is speculation that customer acquisition has also been achieved.

In the second half of the year, they plan to mass-produce FC-BGA substrates for AI. Earlier, in March, Jang Deok-hyun, CEO of Samsung Electro-Mechanics, said, "We plan to start mass production of AI FC-BGA in the second half of this year and are in discussions with several customers," adding, "We will more than double AI-related sales every year by diversifying applications and customers."

LG Innotek also began mass production of FC-BGA in February. They produce IT FC-BGA at their Gumi plant in Gyeongbuk. It is known that they are conducting quality tests with customers. They are making efforts to secure customers through global big tech promotions. Moon Hyuk-soo, CEO of LG Innotek, said at the March shareholders' meeting regarding FC-BGA, "Sales will start to increase as early as August this year, or by October at the latest."

FC-BGA is a highly integrated package substrate that connects semiconductor chips and mainboards. It offers fast information processing speeds. It is mainly applied to high-performance computing (HPC) semiconductors. As the AI market, including big data and machine learning, grows, the FC-BGA market is also showing growth. According to the Fujifilm Comprehensive Research Institute, the global FC-BGA market is expected to grow from $8 billion (about 11.12 trillion won) in 2022 to $16.4 billion (about 22.796 trillion won) by 2030.

The market is dominated by Japanese and Taiwanese companies. Ibiden, Shinko Electric (Japan), and Unimicron (Taiwan) have strong market dominance. Based on 2022 sales, Japanese and Taiwanese companies held a 69% market share. Korean companies accounted for about 10%.