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According to industry sources on the 7th, LG Electronics(066570.KS) is considering using LG Innotek(011070.KS)’s FC-BGA technology in its TV products. FC-BGA, a high-value semiconductor substrate, is a key focus of LG Innotek's new business strategy.

Typically, FC-BGA for TVs measures 35x35mm and is considered a lower-end product in the FC-BGA range. This type of substrate can also be used in TV peripherals like wireless speakers.

FC-BGA from LG Innotek’s new F1 factory in Gumi, North Gyeongsang Province, is likely to be used in LG Electronics products. The F1 factory, operational since the first quarter of this year, has yet to secure large-scale orders from major customers. However, if LG Innotek successfully supplies FC-BGA to LG Electronics, it will establish a crucial industry reference.

LG Innotek is also eyeing FC-BGA supply opportunities with other companies. Following the annual general meeting in March, LG Innotek CEO Moon Hyeok-soo stated, “We have already started small-scale production of FC-BGA and expect to achieve meaningful sales levels by as early as August 2024, or by October at the latest.” This is believed to refer to clients beyond LG Electronics.

Last November, CEO Moon predicted that the FC-BGA segment would see significant results starting in 2024. He noted, “While we’ve focused primarily on camera modules in recent years, we plan to increase investment in other areas to balance our business portfolio.” He added, “Although the FC-BGA and automotive components segments have yet to yield major results, we expect tangible outcomes next year and will focus on these areas.”

In January last year, LG Innotek announced plans to fully operationalize its new FC-BGA factory in the second half of 2023. However, given these plans, the expansion of LG Innotek’s FC-BGA business has been relatively slow.

This slowdown is largely attributed to the downturn in the PC market, the primary application for semiconductor substrates like FC-BGA. For semiconductor companies to expand partnerships with substrate suppliers, the PC market must recover and drive demand for these substrates. Such a recovery could create opportunities for newer players like LG Innotek.

Last January, LG Innotek revealed that it had begun mass production of FC-BGA for network, modem, and digital TV applications in June 2022, with these products classified as low-end. The technical complexity of FC-BGA increases with its size.

LG Innotek is now focused on developing FC-BGA for PCs and servers, with server applications being the most challenging. The company aims to grow FC-BGA sales to between 400 billion and 500 billion KRW by 2025 and to 1 trillion KRW by 2030. Achieving these goals will require sequential mass production of PC and server FC-BGA and continued investment in this area.

Editor：Lulu

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