[Edaily Reporter Kim So-yeon] LG Innotek is expanding its semiconductor substrate factory in Haiphong, Vietnam. The company plans to utilize its Gumi facility in South Korea as a master factory for semiconductor substrates and the expanded factory in Vietnam as a production base for general-purpose products, creating a dual-track system. As demand for high-performance, high-value-added semiconductor substrates for artificial intelligence (AI) continues to grow, the company aims to expand its production capacity accordingly and grow its package solution business to generate over 3 trillion won in revenue by 2030.

On the 4th, LG Innotek signed a Memorandum of Understanding (MOU) with the city of Haiphong, Vietnam, regarding investment in the expansion of a semiconductor substrate factory at the LG Science Park in Magok, Seoul. The event was attended by key officials, including Do Thanh Trung, Mayor of Haiphong, Vietnam, as well as LG Innotek’s key executives, led by President Moon Hyuk-soo.

This expansion will be funded directly by the company’s Vietnamese subsidiary, with construction set to begin next month and completion scheduled for May of next year. The site covers an area of 98,000 pyeong (approximately 330,000 square meters), equivalent to 45 soccer fields.

With this expansion, LG Innotek plans to have its Gumi facility in South Korea focus exclusively on the production of new semiconductor substrate technologies, new models, and high-value-added products, while utilizing the Vietnam plant as a production base for general-purpose semiconductor substrates. The Vietnam plant will produce RF-SiP (Radio Frequency-System in Package), FC-CSP (Flip Chip-Chip Scale Package), and FC-BGA (Flip Chip-Ball Grid Array) for mobile, telecommunications, and PC applications.

Demand for high-performance, high-value semiconductor substrates is surging due to the recent proliferation of training and inference AI. FC-BGA for AI is a core component that connects semiconductors to motherboards, and demand is growing as global big tech companies continue to expand their AI investments.

As a result, the production utilization rate for semiconductor substrates at LG Innotek’s Gumi plant has reached the 90% range. With sustained market growth expected, the company plans to expand production capacity by expanding its factory in Vietnam.

LG Innotek plans to handle the production of general-purpose semiconductor substrates at its Vietnam plant to reduce costs and improve production efficiency. The Haiphong semiconductor substrate plant has the advantage of having its infrastructure already in place, as it has been operated by a local subsidiary for a long time, and its proximity to major semiconductor back-end process companies allows for enhanced responsiveness to customer needs.

Furthermore, anticipating continued growth in demand for semiconductor substrates driven by the AI trend, LG Innotek is also considering investments in semiconductor substrate-related projects in South Korea this year. Last March, LG Innotek signed a 600 billion won investment agreement with Gumi City, North Gyeongsang Province, to strengthen competitiveness in its packaging and other businesses by the end of this year.

President Moon Hyuk-soo stated, “The package solutions business, which offers both profitability and growth potential, is a core growth engine for LG Innotek.” He added, “Through strategies such as diversifying production sites, we will grow the package solutions business’s revenue to over 3 trillion won by 2030 and raise its contribution to profits to the level of the optical solutions business.”